Getting a Mortgage loan in 2021
Getting a mortgage loan approval for a house may be pretty easy for people. In many cases, this is the signal many need to start looking out for a house. The pre-approval process involves the mortgage lender receiving details such as your bank statement, your tax returns from the past two years, paycheck stubs, and so on. The lender will also check your credit history.
Note that having a pre-approval does not guarantee to get the loan closed. It only signifies a likelihood of success of the mortgage loan upon the completion of the underwriting process. Therefore, a loss of income or employment can indeed jeopardize the whole process.
But what if you lose your job before closing a mortgage?
The first thing is to inform your mortgage lender. Although the lender may have verified your income and employment at the pre-approval already, keeping this information from your lender may be more dangerous than you think. It is not unusual for lenders to re-double-check your employment status right before closing to ensure that you are still employed. Discovering on their own that you are no longer employed will put you in a bad light and is, in fact, a mortgage fraud.
Bear in mind that to close a mortgage, you have to provide an income source. Therefore, telling your mortgage lender about your job loss is usually not enough. Consider doing the following as well:
1. Maintain a good credit history
Maintaining a good credit history saves you from high-interest loans and loan rejections. Late payments and missed payments can decrease your credit score. An option for you may be to contact your lenders and creditors to see if you can be granted a “skip payment option”.
2. Ask for your mortgage to be re-calculated
Although a regular income is preferred, that is not the only means mortgage can be granted. Other sources such as alimony payments, disability income, child support payments, and retirement income may qualify you for closing too.
3. Get a new job
Getting a new job quickly is very likely to save your mortgage. Note that the lender may require you to be at the job for a while before closing. Also, your new job must be in the same field as your previous job, and your income must remain roughly the same or increase. The lender may also request proof of your employment or go further to confirm your employment with your new employer.