Unemployment disqualifies for mortgage?

[Anonymous]

Can someone who has been laid off and has been drawing unemployment qualify for a mortgage? What type of employment history are the lenders looking for?

[203bravo]

Can someone who has no job get a mortgage?  Certainly.

In the traditional process employment and income stability is factored into the underwriting process.  Normally the lender is going to be looking for a 2 year employment history with he current employer and/or longer in the occupational field if it's a new job.

You will need to overcome this issue with (a) a substantial down payment, (b) a good residual income that has nothing to do with the unemployment checks, (c) a large net worth, (d) a substantial amount of liquid assets that will be in reserve after the  loan and downpayment/closing costs etc.

You will probably need to find a lender that will manually underwrite you and go talk to them to see what the exact requirements are.

Best of luck.

[Anonymous]

In other words, generally no.  You have to have income to qualify on your debts.  Since unemployment is a short term gap filler, I do not believe that will allow it.  If you have an outside income then you would not qualify for unemployment generally (or at least any large amoutn of unemployment...)  In the end, look at your income and assets (not counting UE) and if you think you could qualify (say you are married and the spouse is working) then go for it.  But generally it is tough to qulaify since you have little to know income.  At least that is how I think it works with UE

[ShanetheMortgageMan]

Usually income derived from unemployment compensation cannot be considered due to the limited duration.  Unemployment compensation will be used as qualifying income when the applicant is employed in a seasonal type of job or field where temporary periods of unemployment are typical. Develop a two year history using tax returns and average this income over 24 months. In this situation, the applicant’s regular income would also be averaged. Unemployment income can not be used for qualifying where the applicant underwent long periods of unemployment due to factors other than seasonal employment.

[Anonymous]

Shane,

Do you know how they would handle this situation.  Father in law works in construction and things have been slow for the last several months.  He usually works one week then gets unemployment the next week.  He is looking to take out a HELOC.  Will they use the unemployment dollars to figure DTI or just wages from work?  The lender wants his last two pay stubs and since he is paid weekly one stub is a full weeks pay and the other is zero.

Thanks

[DallasLoanGuy]

i had a school bus driver get a loan during the summer when she was laid off.

we documented that she got laid off every summer or the last 10 yrs.

that was a long time ago and i dont know if that would still fly. but worth a try

bottom line: you have to have a job for a mortgage.

Message Edited by DallasLoanGuy on 09-01-2009 11:24 AM

[ShanetheMortgageMan]

How long havs he been getting unemployment for?  If it's not something that happens quite regularly, meaning if he hasn't been getting unemployment on and off for the past year or two, unlikely it'll be able to be used.

[Anonymous]

Thanks for the advice.  he was working full time with the same company for 20+ years but recently started working one week on one week off for about the last 4-5 months due to work being slow.

[ShanetheMortgageMan]

Yeah in that situation I'd say it's going to be very hard to use the unemployment since it is a fairly new thing.

[Anonymous]

also, a UW will not use it based upon a business slowing down and income being cut.   That is not the same as a seasonal employee who goes un UE for 2-3 months at the same time every year.  The UW if anything is going to be even more pickier about DTI and stuff with the income lowered because it could continue to slow down give the economic state.