How does a 2-3 week unpaid leave of absence affect qualifying for loans or mortgages?

Seeking Advice
1

I’m considering taking a short, unpaid leave of absence and am curious about how this might affect my ability to qualify for a loan or mortgage.

2

You will need to provide a letter of explanation and a confirmation from your employer stating you’ve returned to work. This should suffice for most lending situations.

3

Sage said:
You will need to provide a letter of explanation and a confirmation from your employer stating you’ve returned to work. This should suffice for most lending situations.

Thank you for the advice!

4

Sage said:
You will need to provide a letter of explanation and a confirmation from your employer stating you’ve returned to work. This should suffice for most lending situations.

I’m currently on a short-term leave for 8 weeks. The bank only required proof of income and official documentation confirming I’ll return to work before the mortgage begins.

5

Provide a letter of explanation as part of your application; this will be used to calculate your qualifying income. Avoid taking leave after your pre-approval; instead, work as much as possible to ensure your income figures are stable.

6

@Bay
I was thinking of taking time off to rest due to health concerns. Would it be okay to do this before applying for a mortgage in a few weeks when I’m back?

7

If you’re salaried, a brief unpaid leave likely won’t impact your mortgage application unless an underwriter raises questions. Make sure to discuss any commission income you wish to include as well.

8

Addison said:
If you’re salaried, a brief unpaid leave likely won’t impact your mortgage application unless an underwriter raises questions. Make sure to discuss any commission income you wish to include as well.

Thanks! I receive both salary and commission. Can I include my commission income in the application?

9

@Skyler
For commission income to be considered, you generally need at least two years of history. Underwriters might use discretion if you’ve been receiving it for over a year and it’s in the same line of work as your previous job.

10

@Addison
My previous job, which ended last year, was in the same industry. My current job is in a different field.

11

Skyler said:
@Addison
My previous job, which ended last year, was in the same industry. My current job is in a different field.

It may be difficult to use the commission income then. It’s best to discuss this directly with your loan officer, who can consult the underwriter for a precise answer on how it’ll be handled.

12

@Addison
Thanks for the guidance!