Losing Job During Mortgage Process
Still Qualifying For Home Loan After Losing Job During Mortgage Process
Losing job during mortgage process does not happen often, however, there are times when it is inevitable and does happen to the best of us. Losing job during mortgage process does not automatically mean that the mortgage loan of the borrower is dead. There can definitely be delays in closing your home loan when losing job during mortgage process does happen. Mortgage lenders view employment and income as one of the most important factor with mortgage borrowers. The longer a mortgage borrower has been employed with a specific employer proves job stability which translates into income stability and is a consistent income predictor for the future. Losing job during mortgage process can happen and when this happens the whole mortgage process comes to an abrupt halt until the employment and income issue has been resolved.
Losing Job During Mortgage Process: Changing Jobs
Mortgage borrowers should try not to change jobs during the mortgage application and mortgage approval process. However, losing job during mortgage process does happen and cannot be avoided. There are cases where mortgage borrowers may get a job offer they cannot refuse at a much higher salary and benefits. If this happens and the borrower does take on a new job during the mortgage process, then the mortgage lender will need to get a written verification of employment from the new employer and need to provide 30 days paycheck stubs before the mortgage loan borrower is able to close on their mortgage loan.
Changing jobs from one W-2 wage earner status to another W-2 wage earner status position is fine. However, mortgage loan borrowers need to realize if they go from a W-2 wage earner job to a 1099 paying job, then they will no longer qualify for a mortgage loan. If you are 1099 wage earner, you need two years of continuous employment history as a 1099 wage earner in order to qualify for a mortgage loan.
Losing Job During Mortgage Process: Retirement
Many folks who are about to retire want to get a home mortgage either to purchase a new home, purchase a second home, or upgrade and/or downsize and like to get their mortgage loan prior to them retiring due to employment verification. This strategy can be tricky because when mortgage lenders do a verification of employment on a borrower, one of the questions asked is whether or not the borrower’s employment is likely to continue for the next three years. If you told your employer that your last day will be a specific date, then the Human Resources manager will notice that on your employment records and will most likely tell your lender that the employment likelihood of being employed three or more years is not likely because the borrower has turned in their resignation.
Losing Job During Mortgage Process: Permanent Loss Of Job
If the borrower has gotten fired during the mortgage loan application and mortgage loan approval process and has no other job to go to, then there can be issues in proceeding with the mortgage process. When a borrower loses their job during the mortgage process, the borrower’s income is no longer valid. The only option that the mortgage process can proceed is by adding a non-occupant co-borrower if the co-borrower has sufficient income and can meet the minimum credit standards to qualify for a home loan. The borrower also needs to consider whether or not they can afford their home mortgage payments with the loss of job and how likely they will be to gain full time employment. Getting new full time employment is certain fields are much more easier and quicker than other fields.