What If You Lose Your Job Amid Mortgage Process
Purchasing a house can be an exciting experience. However, the procedure is stressful too. When you are under contract on a house and it appears as your new home loan will close with no issue, you can have complete relief. Nevertheless, sometimes problems arrive between the time you go under the home contract and the closing day. Albeit it’s not common, there are some scenarios in which home purchasers lose their job simultaneously they are trying to buy a house.
In case you are undergoing the mortgage process and have just lost your job, do not panic. Your job loss doesn’t mean your loan will fall through. If you lose your job, many factors come into play when trying to close the new home loan. The best thing to do is to inform your lender about your job loss ASAP. You must be honest with your lender at every time.
Should you inform your lender?
If you want to keep your job loss as a secret, it seems to be a bad idea for some reasons:
1) Lenders verify both income and employment before lending and at the time of closing. So, they can be informed by your former employer about your job loss.
2) You might be committing mortgage fraud if you don’t disclose your job loss. You should sign documents for notifying the lender regarding every change to income or employment.
3) Unless you are getting a new job, making new mortgage payments can be challenging. Failing to repay your home loan can hamper your financial profit and wreck your credit for years.
New employment might help
You can hang onto a new house if you get a new job. It must be similar like your former one, in terms of the salary, work type, and the field. Written confirmation and job details from your new employer can help.
Lenders may need you to join the job for 30 days before stepping, a wait which could impact everything from the closing date to the rate of interest. Sometimes, you can convince the lender to step with no delay if you get a new job.
You could also add a co-signer based on your loan type and count the last-minute income of that person who would require fulfilling the similar credit and underwriting needs you did. Talk to your mortgage lender and your regarding options. Your new job must be continuous.