Here’s the message conservative lenders are sending: Don’t have a baby if you want to qualify for a mortgage.
On maternity leave or paternity leave, it’s common for a family’s income to drop. If income during the leave is classified as disability income, mortgages look at this income as temporary, and they often don’t consider the possibility of the parent on leave return to full-time and full-paid employment.
In this situation, the problem isn’t Fannie Mae or Freddie Mac, the quasi-government agencies that support the mortgage lenders. They haven’t tightened the rules for lending and have no problem with maternity leave. All they require is a doctor’s note and a letter from the employer listing the planned date of return and the full salary. Some lenders won’t consider any income from the individual on family leave.
As a result, it could be difficult for families to qualify for a mortgage at the time they might feel the need it the most — when a new baby is on the way. This is something to keep in mind when planning major life decisions like starting or expanding a family and buying a home.
Need a Mortgage? Don’t Get Pregnant, Tara Siegel Bernard, July 19, 2010
Photo: Hafdis H
Updated January 18, 2011 and originally published July 20, 2010. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @flexo on Twitter and visit our Facebook page for more updates.
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Luke Landes founded Consumerism Commentary in 2003 and has been building online communities since 1990. Luke, also known as Flexo, has contributed to PC World Magazine, US News, Forbes, and other publications. 
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That’s interesting. I guess there’s another reason to add to the list of why we tell people when getting a mortgage they should make sure they qualify on just one income.