When you need to take a leave of absence from your job, it seems like all of your financial goals come to a halt. It’s frustrating, especially if your leave is a short-term situation.
If you are on a temporary leave of absence from work, did you know that you can use your pre-leave income to qualify for a mortgage in Pennsylvania? At MortgageDepot, we work with lenders that make this possible.
Defining Temporary Leave
Temporary leave might seem like a pretty cut-and-dried situation, but not every absence from work counts. If you want to qualify for a mortgage using your pre-leave income, here are the types of temporary leave that are acceptable:
Maternity or paternal leave
Short-term medical leave
Other short-term absences indicated by law or your employer.
Using Your Pre-Leave Income To Qualify for a Mortgage
Now that you know that a temporary leave doesn’t mean that your real estate goals need to take a backseat, you can prepare to take action. Here are the requirements that you need to know:
You must return to work and begin generating income before closing.
You will need a completed Verification of Employment (VOE) to explain your reason for taking a leave of absence.
You can use cash reserves, in addition to your pre-leave income, to qualify. Cash reserves are divided by the number of months you were on leave. Your reserve income cannot exceed your employment income.
If you aren’t returning to work until after closing, a reduced income figure will be used to determine eligibility.
What About COVID-19?
In general, COVID-19 layoffs are not an acceptable reason for short-term leave. COVID-19 illness might be a different story. Talk to your employer (and us, of course) to figure out the specifics of your scenario.
Contact Us Today!
Don’t put your home ownership dreams on hold. If you need a mortgage in Pennsylvania, connect with us today to learn how to qualify during a short-term leave situation!