Receiving the pink slip while in the middle of buying a house can be brutal. On top of finding yourself out of work, you're also dreading that you won't be able to push through with your house purchase. But, you have to remember that having a job is not a requirement when getting a home loan. Just think of those business owners and self employed people who were able to buy their own house even without showing a pay stub. What lenders look into is steady flow of income that is likely to continue for a long period of time. It just so happens that normally, having a job takes care of that requirement.
Losing your job doesn't necessarily mean you won't be able to buy your house anymore. It all depends on how you're going to continue your cash flow to convince the lender that you have a stable source of income. Here are some of the things you can do to salvage your house purchase.
Tell Your Lender Immediately
Keeping the fact the you're now unemployment from your lender is a very bad decision. For one, you are breaking your agreement to let the lender know if there are significant changes in your employment status or source of income. That's mortgage fraud.
Second, your lender will most surely find out about it once they do final verification. They will know you've purposely hidden your being jobless, and again, that's mortgage fraud.
Third, having to miss out on your monthly mortgage payments is not a good idea. Even if for some reason you got lucky and your lender did not realize you're already jobless, would you really want to take that risk and go ahead? It's bad for your conscience and will be bad for your credit history as well if you don't have the cash flow to pay the monthly mortgage.
By telling your lender you have lost your job, gives you an opportunity to discuss other ways you can qualify for your mortgage.
Find a New Job
The most ideal scenario would be getting a new employment so as not to disrupt your financial history. This is what you should be striving for when you become unemployed in the middle of your house-buying process. Once you have a new job, let your lender know immediately and provide documents as proof. As much as possible, the job should be on the same field and same salary level as your previous job. You can also request your new employer to provide you with a written job description or certificate of employment.
If you don't get a new job, you can look for a co-borrower. Your co-signer should understand the risks of the situation, for example if you missed your payments.
Other Income
Lenders also consider other sources of income like pension or rental income, but you will have to provide proof that the cash flow is steady and will likely to continue for a long period of time.
No matter what happens, talk to your lender because they are the only ones who can help you.
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