Unpaid Time Off & Mortgage Pre-Approval

[Anonymous]

My husband and I plan to apply for a pre-approval in January. We just relocated from Oregon to Georgia and want to get to know the area before buying a house (this is why we are waiting). We sold our home in Oregon and have our scores & down payment (20%) all ready, but there is one question lingering. In December we want to take a 8 day vacation. This vacation will be unpaid by my employer because I had a baby this year and used all of my PTO + Short Term Disability to cover my 4 month maternity leave. I know that mortgage lenders will want paystubs and bank statements and my check will be smaller because of the unpaid time. Will this be an issue?

We plan to build new and there are 3 or 4 builders we plan to check out after the new year. To get the initial pre-approval we plan to go with the builders preferred lender.

Any idea on this?

Thanks!

[NC_Mtg_Loaner]

The answer to your question is subject to the DTI of your proposed transaction and your income. 

It's a question better answered by the lender you speak with however, in theory, it's not likely that one tiny week of unpaid vacation will derail your opportunity but you haven't really provided enough of those specifics in order to provide a transaction specific answer.

Believe it or not though, I once had a deal that was in jeopardy because the Buyer took two weeks of unpaid vacation during the year and I was unaware of it until we received the formal VOE (Verification of Employment).   She worked for a small company that didn't provide YTD income information on her paycheck stubs.   Those two weeks of missing income lowered the DTI just enough to handcuff the deal as it was proposed.......required a little creative problem solving, but that's how they roll sometimes.