Oh No! I Lost My Job Right Before I Closed on My House!

Your boss calls you into her office and asks you to close the door.

Downsizing, layoffs, or just a bad fit—it doesn't matter how you lost your job. It matters how it’s going to affect getting your mortgage approved.

Here's what happens next. 

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Tell your mortgage lender

This is not something you want to keep a secret.

For one, your lender’s going to find out anyway. Even if they’ve already verified your employment, they’ll still verify it again after they’ve approved their loans.

Remember, this isn’t their first rodeo. Even if you were able to get one past your lender, you’d be committing mortgage fraud—and you could face legal action for it.

What to expect

Once your lender knows you’ve lost your job, they’re probably going to either deny or reduce your mortgage.

It’s definitely a tough break but look at it as a blessing in disguise. It might take a while to find another job, and during that time, if you still had a mortage, you'd be at risk of defaulting on your home—and then foreclosure wouldn't be far behind.

What you can do

If you’re applying for a joint mortgage, there’s a possibility you can still get approved. Get all your documents in order to show that your partner makes enough money to cover the mortgage without you.

The same goes if you have additional income that’s not coming from your job—like alimony or retirement income. Be sure to take the time to find out how much you should spend on your house with your new income. 

If you can find someone willing to cosign on such short notice (thanks, mom and dad), you might still be able to get your loan. Although, chances are it’ll be delayed while the bank verifies all the new information.

The last—and probably best—thing you can do is get a new job quickly. We don’t have to tell you how that will help improve your finances, just be prepared for some delays and extra verification on your loan.