It makes perfect sense. You find out that you’re expecting a baby and after the initial joys have worn off, you quickly realize you have no place to put a crib. You need an extra bedroom but don’t have the space. You consider a move.
This is a totally normal and natural progression. Once your family begins to grow, you decide it's time to invest in that white picket fence. But wait! With banks becoming more conservative than ever, you might not be able to take out that loan all because you are pregnant.
According to a recent New York Times article, lenders are now avoiding giving money to families when they are expecting because of the temporary drop in income. Even though a maternity leave is considered a short-term or temporary disability leave, the couple still might be denied a mortgage.
While we could sit here and wonder just how absurd this idea is, we have decided that it always pays to be more proactive about a situation such as this, instead of just plain annoyed. Rather than being completely upfront about your personal pregnancy situation (as was suggested in The Times), you’re best bet is to plan ahead or adjust your idea of a dream house. Lenders cannot ask you if you’re pregnant, but they will ask you if your income is expected to change, even temporarily. We know having a baby is a personal matter, and we don’t necessarily think that your lender needs to know everything about it. We do think, however, that if you hide the pregnancy from them and your loan is dependent on both your salary and your spouse’s salary, they will quickly deny your loan when they find out about your leave.
Here’s what you can do. If possible (we know this is ideal and not always practical), plan ahead. Instead of waiting to be pregnant and then looking for a house, why not switch the order of events? Just as there might be some perks for couples that decide to move in together before getting married, it might be to your benefit to move before the baby arrives.
Another consideration: shop around for a different house. Instead of choosing a home you can only afford with two salaries, consider a house you can afford with one. Getting a loan then should not be a problem. Purchasing a house this way is also a lot less risky down the road if, for instance, one of you loses your job.
What do you think about the problem pregnancy poses for mortgages? What would you do? Leave us a comment!