Financing in Boston>Question Details

Becky, Home Buyer in Boston, MA

What would happen if one of us were to lose our job after securing financing, but prior to the closing date?

Asked by Becky, Boston, MA Wed Jan 14, 2009

My husband and I are closing on a house next month. What would happen if one of us were to lose our job after securing financing, but prior to the closing date? We know that we could afford the house and all other payments if this were to occur on one income and unemployment without ever touching our savings, but am I right to think that this will not matter to the lender? Do you have to lose the loan? I know we couldn't qualify on one income alone, but we have excellent credit and a very low debt to income ratio. Is anything else taken into account if you lose one income? Also would there be any chance of getting our escrow deposit back if this did happen?

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Becky, What has been said so far is correct if your situation changes between approval and just prior to funding, the lender can deny the loan and you do risk loss of deposit based on that. The real issue with fraud which Mike mentioned is that the loan can be called and you would have a narrow window within which to return the funds to the bank, typicaly 30 days. In addition to all the other hassles not a pretty picture. If you feel you might be in this situation be open with the lender ahead and find out what they say. There may be other options for the single income qualifer. It never hurts to ask. Best, Robert
1 vote Thank Flag Link Thu Jan 15, 2009
The lender probably wouldn't fund it. They will verify employment just before funding.
Web Reference:
0 votes Thank Flag Link Wed Jan 14, 2009
Hi Becky,
If you continue without being honest you are not only opening yourself to legal issues, but you are putting everyone involved in danger of losing one way or another. Your lender could end up having to pay legal fees to prove they did not know that your situation changed prior to closing, The Seller will be blindsided and have to put the property back on the market. Both Agents will have spent a good amount of time to get a deal done only to find out it was all for nothing, and still have to prove that they had no knowledge of your job loss.
The bottom line is that fraud is fraud, and it's a big part of this country's current economic crisis. Best of Luck!
0 votes Thank Flag Link Wed Jan 14, 2009
Technically speaking if one of you loses the income used to approve the home-loan, you would then not qualify to be a buyer for that home. If you removed your contingencies and can't get the loan at the last minute, it's possible you will not be able to get back your initial deposit. Please consult with a local real estate agent as things are done differently in other parts of the country. Good luck!
0 votes Thank Flag Link Wed Jan 14, 2009
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