My husband and I are in the process of buying our first home. I am currently on paid maternity leave from my well paying job, and will return full-time 2 weeks after our closing date. Because my husband is a stay-at-home dad, the lenders my mortgage broker has contacted want me to be at work in order to get a loan. I'm willing to go back to work a little bit early, but I find it offensive that they assume I may not return on my own. Have you heard of this before?
A: Oh, that was a stumper! I went to one of my mortgage experts, Matthew Wahler of WCS Lending in New York City. (Disclosure: he's also my mortgage guy, but this shows you how much I trust him!)
Matthew's response was, "I have not seen this scenario specifically, but, considering it is the only income for the house, the requirement does not surprise me. These days, nothing does."
He points out that the current practice is a departure from the past, when as long as a mother-to-be was "receiving sufficient salary to cover the proposed liabilities," an underwriter wouldn't mind that the borrower was on maternity leave.
These days, though, he says it's bank-by-bank. "At one bank, prior to approval, one underwriter might consider the field in which the mother-to-be works," he said. "Another bank might approve the loan as is, but require the couple put funds in escrow until they can verify that the wife is back at work full-time. Another underwriter at another bank, as this purchaser has experienced, might require the mother-to-be to be back at work full-time prior to closing."
I'm working with a client who is due with her second on Sunday, so I get that you're exhausted -- and offended on top of that! However, the trick with banks is to work with them to get what you both want. Perhaps the solution of putting funds into escrow -- where they're held by a lawyer, not the bank, and will be refunded to you when you go back to work -- is the solution. Or perhaps you might end up delaying your closing by a few weeks until you're back at your desk.
Either way, good luck -- and I hope that you have an easy delivery!