Pregnant Women Denied Loans?

By Melissa Dittmann Tracey, Contributing Editor, REALTOR® Magazine

Expectant parents eager to buy a home for their growing family may be surprised to find that they’re a credit risk when it comes to obtaining a mortgage to purchase their new home — even if they have jobs to make their payments.

According to a recent New York Times article (Need a Mortgage? Don’t Get Pregnant, by Tara Siegel Bernard), pregnant women increasingly are being denied home loans as lenders factor in the decrease in salary from when they’re away on maternity leave. The same applies to fathers taking paternity leave — even if the parent plans to return to work.

The disability payments that new mothers receive do not count as qualifying income toward the mortgage. So new mothers who plan to return to work may have to wait and reapply for a mortgage to buy the home after they’ve returned to their job.

Many lenders are now rechecking borrowers’ financial situation right before the loan closes, including verifying employment, to ensure that borrowers will be able to make their payments. As such, pregnant women are finding themselves caught in the middle of the continued fallout from the credit crisis.

As writer Siegel Bernard reports: Expectant parents may have to ultimately delay purchasing the home, face extra paperwork from the banks with proof of income (doctor and employer letters showing the return date to work may suffice), or even downsize and buy a home that they can afford on one salary.

What do you think? Are pregnant women on maternity leave really a credit risk? Have any of your pregnant clients recently run into snags in obtaining a loan?

Melissa Tracey

Melissa Dittmann Tracey is a contributing editor for REALTOR® Magazine, writing about home & design trends, technology, and sales and marketing. She manages the magazine's award-winning Styled, Staged & Sold blog.

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  1. I had an 8-month PG client buy a home without issue. Lenders may be more stringent now. She planned on, and did end up going back to work.

  2. I find it interesting when you use Craigslist, you will have to verify a disclaimer telling you that it is illegal to discriminate and that you will be fined several thousand dollars before you can post your property.