Temporary Unemployment Mortgage Guidelines On Home Purchases
Temporary Unemployment Mortgage Guidelines Due To The COVID-19 Pandemic
The U.S. economy was booming prior to the coronavirus outbreak.
- Unemployment numbers reached a historic low of under 3.5%
- The Dow Jones Industrial Averages surpassed the 29,000 mark which made history
- Other equity markets followed the Dow and hit historic highs
- Then the coronavirus outbreak hit the United States and everything went spiraling down
- States were shutdown
- Non-essential businesses were ordered closed by local, county, and state politicians
- The U.S unemployment numbers hit a historic low
- Many people were eager, willing, and excited in getting a mortgage pre-approval and becoming homeowners this year
- However, the coronavirus outbreak forced many lenders to revoke the pre-approvals, conditional loan approvals, and clear to close that were issued
- Gustan Cho Associates get countless calls and inquiries daily about how temporary unemployment can impact your home buying dreams
- Many also ask whether or not they can qualify for a home mortgage while unemployed
In this article, we will discuss and cover your options in qualifying for a mortgage while on temporarily unemployed and its guidelines.
The Importance Of Credit And Employment
Credit and Employment are the two main factors when it comes to qualifying for a home mortgage.
- The borrower’s credit history and scores show the past pattern of the borrower’s payment patterns over time
- This is how lenders determine the borrower’s potential payment on a new home mortgage by judging their prior payment history
- Employment history and employment are important due to income and the ability to repay
- The ability of the borrower to be employed for the next three years is taken under serious consideration
- What good is it if a borrower gets laid off as soon as he or she closes on their home mortgage
- It will be impossible to get a mortgage if you are unemployed
- This holds true whether it is temporary and/or permanent unemployment
However, right after the borrower starts a new job, they can qualify for a home mortgage.
Employment Gaps And Temporary Unemployment Mortgage Guidelines
Homebuyers who are temporarily unemployed cannot qualify for a home mortgage while unemployed.
- However, they can qualify for a mortgage as soon as they return to work to the same job
- There are no waiting period requirements on a job after a temporarily unemployed worker goes back to the same job
- There are no waiting period requirements for an unemployed worker to start a new job (it can be in a different field) as long as the employment gap was less than six months
However, if the unemployed worker starts a new job and has been unemployed for six or more months, the worker needs to be in their new job for at least six months.
Paying Bills During Unemployment Period
Make sure to pay the minimum monthly payments that report on your credit bureaus during the period of unemployment. One late payment on any credit tradelines can delay your mortgage qualification for 12 to 24 months. One late payment will plummet your credit scores as well.
Jammi Cash is a vice president of mortgage banking at Gustan Cho Associates. Jammi is an expert in helping borrowers qualify for a home mortgage after periods of unemployment.
Jammi said the following:
To qualify for a home mortgage with a five-star national mortgage company licensed in multiple states with no lender overlays, please contact us at Gustan Cho Associates at 262-716-8151 or text us for a faster response. Or email us at firstname.lastname@example.org. The team at GCA Mortgage Group is available 7 days a week, evenings, weekends, and holidays.