I wrote recently about clients of mine who are expecting twins soon. Their process for obtaining a mortgage was smooth but a New York Times article this week made me worry about future clients who are expecting and wanting to buy a home.
As if expecting parents don't have enough things to worry about, now they have to be concerned about whether their new baby will make it more difficult to buy a new home . . . a new home they are most likely purchasing because of that new baby . . . a home they want to nest in, grow in, and create many memories in. And because of all that, they can't get a loan?
The New York Times reported that pregnancy has become a potential deal-breaker when securing a home loan, even though - and I know I mention it frequently - mortgage rates are the lowest they've been in 50 years and home prices are falling.
The problem? The loss of income while a parent takes leave or the chance that a parent will not re-enter the work force at all. This makes lenders nervous and now they are asking couples who are pregnant to provide proof of income for three years out. Three years! Most people change jobs every two to three years. It takes quite a bit of stability and non-movement to provide evidence of income for three years from the time of closing (not qualifying).
But how would they know? While lenders cannot ask borrowers whether there is a pregnancy in the family, it usually is uncovered when families have to report projected income. Fannie Mae and Freddie Mac buy loan packages from lenders, but each is liable to require the local lender to buy back the mortgage if it is discovered the loan didn't meet underwriting requirements.
Read more about "Getting a Mortgage while Pregnant," at MyPhoenixmls.com blog.
Comments(0)