Home Buying in Portland>Question Details

jjjkmt, Home Buyer in 97006

What happens if you are closing on a house and you just found out your job will be ending in 3 months?

Asked by jjjkmt, 97006 Fri Jan 31, 2014

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7
You might be able to get your earnest money back because you will not qualify for a loan. Good luck to you. Tom inglesby, broker remax
0 votes Thank Flag Link Sat Feb 1, 2014
Sad situation, sorry to hear it. As they said below, you have to tell your lender and your agent and find the appropriate response to the sellers to get out of the deal and get your earnest money back.
0 votes Thank Flag Link Sat Feb 1, 2014
You need to tell your Lender. You may be out some expenses, but that is far better than getting a mortgage that you cannot pay. You have my sympathies.
0 votes Thank Flag Link Sat Feb 1, 2014
If you are taking out a mortgage the lender will require a written verification of employment before underwriting and another verbal verification before funding so chances are it will be discovered.

Unless you have a coapplicant who can cover all of your liabilities comfortably then the ability to repay is not evident. Under the new QM/ATR (qualified mortgage/ability to repay) laws that went into effect under Frank-Dodd on 1/10/14 it could even be considered illegal to give you a mortgage.

If you omit the information and are somehow able to close then you would be committing mortgage fraud.

Either way why risk it? If the loss of your job affects you qualifying then your lender can provide you with a decline and your earnest monies can be refunded.

Plus it's easier and cheaper to get out early on in the transaction,,, consult with your agent and lender if applicable.

If you had another job lined up you might have a work around available depending on the loan program but your timeline is likely an issue.
0 votes Thank Flag Link Fri Jan 31, 2014
The previous information is good but also important regardless of whether or not you may or may not be able to close on the sale. Disclosure to the seller is critical. Written into the sales agreement is a requirement to disclose any changes to your ability to finance/purchase or change of loan program. It is critical that you communicate with your real estate broker and your mortgage professional. Tell them the whole truth and any information additionally that they might use to help you achieve the outcome you hope to achieve. Losing your job does not automatically mean you cannot purchase. Just be aware that any factors such as job loss that are discovered just before close will likely kill the deal and cause you to lose earnest money. Disclose, disclose, disclose....
0 votes Thank Flag Link Fri Jan 31, 2014
Same thing happened to my ex husband and we told the sellers immediately. We could not get a loan if he was also not employed. We did get our earnest money back as well as we could not get the loan under those circumstances. We ended up moving out of the city to a different location where he did get a job but months later.

More than likely you will not get final approval for the loan given the circumstances. I would err on the side of caution and have your agent talk to the other side as soon as possible. There is no gaurantee that you will be employed in the same city so why tie yourself to a house that you will need to rent or sell. Joan Bowyer-Principal Broker-John L. Scott-32 years of helping buyers and sellers
0 votes Thank Flag Link Fri Jan 31, 2014
It really depends on several factors. Can you get another job right away in the same field for similar pay? Are you receiving a severance package that can hold you for a while? Do you have funds in the bank to rely on? Will your employer tell the bank when/if they call for a final verification of employment?
If your termination is a public matter and the bank will find out, they will likely not approve the loan at the last minute. Employment verification calls are not uncommon and sometimes happen more than once in the underwriting process.
I think I'd find out if there were other jobs in the company you might be able to get. I would be looking for other employment opportunities outside the company and I'd be talking to anyone else involved with your decision making for their input and advice, like a spouse.
I had something similar happen to a client of mine before and we just stopped our process until things worked out. Eventually he got a much better job and we got their home sold and they got a much larger home that they love.
0 votes Thank Flag Link Fri Jan 31, 2014
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