Financing in 11208>Question Details

Warrell, Home Buyer in 11208

What happen if spouse loses job before closing date?

Asked by Warrell, 11208 Fri Sep 9, 2011

We can still afford the mortgage on one salary. Should I tell my lender or just wait until closing day to see if it works out? Also is unemployment counted as income?

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Dear Warrell:

If you bring it to their attention they may deny the loan, unless based on the banks qualifying criteria you make enough income alone to qualify by yourself. Even if you do not tell your mortgage banker, they will probably discover it before the closing and then the fact that you did not tell them will raise even more of a red flag thus lessening the chances of you getting the mortgage.

If you do not get the loan, a normal contract of sale has a mortgage contingency stating that if you do not get the loan through no fault of your own (such as job loss), the deal would falter and you would get back your down payment.

Your spouse should make it top priority to find another job, that may be more of a concern than losing the deal (unless you got a true dream deal). Be careful and make sure you will be able to make the payments even if the bank is willing to still give you the loan! Oh, and unemployment is not counted as income in the eyes of a bank.

If I can be of further assistance, please let me know. Good luck!

Sincerely,
Mitchell S. Feldman
Associate Broker/ Director of Sales
Madison Estates & Properties, Inc.
Office: (718) 645-1665/ Cell: (917) 805-0783
Email: MitchellSFeldman@aol.com
1 vote Thank Flag Link Fri Sep 9, 2011
Your lender may do a last minute credit check, employment check, etc. before it gives a "clear to close." Many do. Rather than risk a last minute issue, you should talk with your loan officer, now, regarding your current situation. It is quite possible that your lender will want to underwrite the loan again.
0 votes Thank Flag Link Mon Sep 9, 2013
You definitely need to notify your loan officer right away. She will need to verify the income and make sure you still qualify. Don't wait until closing! If you do that, you may not close on the house and you could be in default and lose your earnest money.
0 votes Thank Flag Link Mon Sep 9, 2013
Most of the banks are going to verify employment again a week before closing. Underwriting departments are checking tax returns and employment records at the start and end of the mortgage process.
0 votes Thank Flag Link Sat Oct 8, 2011
You may tell your lander as soon as posibble.If only one income is enough for mortgage you will go throw.Unemployment is income for shhort time.Underwrighter doesn't count on this kind of income.Good luck.
0 votes Thank Flag Link Thu Sep 29, 2011
As a lender, I can tell you that you have to let your loan officer know. Most lenders do a verbal verification of employment the day of or before the closing, so they will more than likely find out anyway. If her loss of income leads to you no longer qualifying for the loan, you'll get a denial letter. If she finds work right away, the bank should be able to collect her 1st pay stub and if the income is more or less what it was at the previous job, you shoul dbe able to close on the house. If you have any more wuestions, feel free to call or email. Good luck!

Javier Meneses
Sterling National Bank
516-606-9648
javier.meneses@sterlingnational.com
0 votes Thank Flag Link Wed Sep 21, 2011
Can assure you this will be discovered. Best to notify your Broker ASAP
0 votes Thank Flag Link Sun Sep 18, 2011
You need to tell your mortgage officer immediately. Even if you can qualify on your own income, if you neglect to tell the lender they will want to reunderwrite the mortgage. Employment is verified 5 business days before the closing. If the lender is not aware of your husband's unemployment, the closing will be canceled.
0 votes Thank Flag Link Fri Sep 9, 2011
Both of those Agents gave you great advise and to answer you second question, Yes, Unemployment is counted as income, but I am not sure if that will help you with securing a loan. Good luck!!!
0 votes Thank Flag Link Fri Sep 9, 2011
Warrell,

With loans these days they generally do a re-check on employment before settlement (7 days) and will likely find this out. If you wait for them to find out there may be repercussions. You should alert your lender immediately to see if you still qualify for the same loan or any loan. And then you should alert your buyers agent so they can prepare if you need to withdraw from the contract.

best of luck.
0 votes Thank Flag Link Fri Sep 9, 2011
Your loan officer should be made aware of the job loss, he/she can best advise....
0 votes Thank Flag Link Fri Sep 9, 2011
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