Mortgage loan and potential job change

Anonymous · ‎04-20-2015

We have a conditional loan approval for a house we are purchasing. The planned settlement day is May 7th, however a couple days ago, my wife received a verbal notice from her boss that starting May 11th, she would be converted into a part-time, for which we will lose 2/3 of her monthly income.

Will this affect the settlement or the loan? I heard that usually the day before the settlement day, lender would call the employers to verify the employment status, I am worried what the bank will do if my wife's HR department tell them her upcoming job change.

thanks

StartingOver10 · ‎04-21-2015

@Anonymous wrote:
We have a conditional loan approval for a house we are purchasing. The planned settlement day is May 7th, however a couple days ago, my wife received a verbal notice from her boss that starting May 11th, she would be converted into a part-time, for which we will lose 2/3 of her monthly income.

Will this affect the settlement or the loan? I heard that usually the day before the settlement day, lender would call the employers to verify the employment status, I am worried what the bank will do if my wife's HR department tell them her upcoming job change.

thanks

This is a major change in her income. Is it a major change in household income too? Is the new home still affordable with this income reduction? Is she planning to find another job to supplement her reduced income or replace the job entirely?

There are two sides to this question: 1) what will be the real impact to you/your wife and your family with this reduction and do you still want to go through with the purchase in light of this change. And 2) do you still qualify for the mortgage? Your LO should know about this as it may impact your ability to close. I don't know because we don't have enough information, but your LO is the right person with which to discuss this change.

Anonymous · ‎04-21-2015

I agree that your loan officer is the best person to talk to about this. If you still want to move forward given this info, your loan officer should have your back and work to ensure you can still get the loan. I do not know all the circumstances, but you should be able to count the income at 2/3 of what was there before and perhaps you are still qualified. However, your employment verification concerns are valid and you want to be forthcoming with your loan officer so they can help navigate this. Good luck!

DallasLoanGuy · ‎04-21-2015

not uncommon for lender to do a verbal veriication of employment around closing

Retired Lender

Anonymous · ‎04-21-2015

This is a major change in her income. Is it a major change in household income too? Is the new home still affordable with this income reduction? Is she planning to find another job to supplement her reduced income or replace the job entirely?

There are two sides to this question: 1) what will be the real impact to you/your wife and your family with this reduction and do you still want to go through with the purchase in light of this change. And 2) do you still qualify for the mortgage? Your LO should know about this as it may impact your ability to close. I don't know because we don't have enough information, but your LO is the right person with which to discuss this change.

Our combined income is about 15k per month, this change will take away 4k/month, leaving us with 11k. The house price is 750k and we are taking 600k loan with monthly pyament of 3600( tax and insurance included). I think we can still manage it and my wife is looking for another job now. My only concern is the loan approval, job change around settlement is big no no,

Should I just play dumb? or still need to talk with the loan officer, will we lose the deposit if we dont get the loan in the end?

Anonymous · ‎04-21-2015

Ok so there is a reduction in income. That means and hit on the DTI. Take a look at what can be done on the going out side, to compensate for the reduction in coming in.

Might be nothing happens, but won't hurt to have a plan B ready.