Getting a Mortgage on Maternity Leave
March 22, 2021 | Posted by: Ron Chan
Congratulations on your bundle of joy! You’re entering the most exciting (albeit sometimes sleepless) time of your life. But beyond the glow and glee of being a new parent there is most certainly a shift in priorities which means that you’re taking time away from the workplace to focus on what matters most. That said, you’re also setting future goals, and are wisely making home ownership one of them. In fact, the arrival of a baby is often a precursor to a home purchase, but does being on maternity leave leave you with limited options when it comes to getting a mortgage in Canada? Here’s what you need to know.
What Professionals on Maternity-Paternity Leave Want to Know Before Entering Into a Mortgage in Winnipeg MB
Lenders Are Not Allowed to Ask Nor Deny
Mortgage lenders in Canada are not permitted to ask whether you are pregnant or on maternity leave. This rule is in place to protect the rights of expecting and new parents. They legally cannot deny you a mortgage because you’re becoming a parent. Obviously if you’re in the second or third trimester an in-person meeting will evidence this fact, but they have to take your word that you’ll remain employed as much as anyone who approaches them for a home loan.
A Change of Income is a Change Income
While the big banks may not be able to outright question your intent to return to work, they have the right to count your current income as the income being applied to your mortgage, even if it will be back to the level it was prior to maternity leave. Simply put, if you are on maternity leave, your current income is your income. As such, this can limit what you get pre-approved for, although lenders will still look at the big picture, including assets, credit scores, expenses, and whether or not you are a part of a double income household. Connecting to the right lenders is the key, which leads us to the next point.
Let a Broker Deal With Lenders
Some lenders in Winnipeg don’t have the best track record when it comes to providing home financing to those on maternity leave. They may require that you’re within 60 days, or 90 days of your return to work and put all sorts of stipulations (within legal boundaries) on you to mitigate what they see as increased risk to them.
Let’s weed them out. They don’t deserve your business.
However, the last thing you want to do is meet with lender after lender until you find those who aren’t stuck in the 1950s. This is why you should do yourself a huge favor and secure a mortgage broker. A reputable broker that has longstanding relationships with banks, credit unions, trusts, and other financiers in the Winnipeg community will be able to connect you to resources you won’t have access to on your own. The right broker will know exactly which lenders are more “lenient”, those that only ask for confirmation of your return-to-work date and nothing more. Better yet, you can get access to unadvertised rates that compound the low interest already being offered on both fixed and variable options in 2021.
As a father and person who places family-first Ron Chan is ready to go to work for professionals on maternity leave. Get pre-approved for mortgage rates and terms you deserve by calling 204.290.9950 today.