Job Loss 1 Week Before Closing

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Job Loss 1 Week Before Closing

Christine Steiner
Fort Worth, TX · Member since 2015 · 11 posts · 0 votes

I need advice.  

We are closing on our first investment property in 1 week and we already have a renter lined up! The guys is military and will sign an 18 month lease. Expected monthly cash flow is $290 (after PITI, not after vacancy or repairs) The place is newly renovated and move-in ready and will only require small fixes the day after close.

I'm a stay at home mom and my husband just told me that he was let go from his job today.  Yay!!  We have the cash to close and will have plenty left to live on after.  He gets 10 weeks severance and we are debt free other than the $1500 mortgage on our primary residence.  So, basically, we do NOT want this deal to fall through.

We are in the final stages of underwriting.  Do we tell?  Do we HAVE to tell?  Should we ask our realtor for advice or are they legally obligated to tell if we confide in them?  

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Charlie Fitzgerald
Lender · Las Vegas, NV · Member since 2015 · 2k+ posts · 1k+ votes
10y

Most certainly mention so lenders will do a a verbal verification of employment prior to funding.  Withholding changes in your application affecting your material data  is also not good and would be considered mortgage fraud.

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  • Stone Teran
    Investor · Cincinnati, OH · Member since 2015 · 374 posts · 120 votes
    10y

    I'd stay quiet unless you have serious doubts you can still afford this note.

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  • Ricardo Meza
    San Jose, CA · Member since 2016 · 58 posts · 19 votes
    10y

    I'm sorry you find yourself in this situation, and I don't have an answer for you.  But I'm hoping everything works out for the best for you and your family.  Best wishes!

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  • Charlie Fitzgerald
    Lender · Las Vegas, NV · Member since 2015 · 2k+ posts · 1k+ votes
    10y

    Most certainly mention so lenders will do a a verbal verification of employment prior to funding.  Withholding changes in your application affecting your material data  is also not good and would be considered mortgage fraud.

    2Reply
  • Mindy JensenPro Member
    BiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes
    10y

    @Christine Steiner, this super-stinks. Unfortunately, you'll need to start looking for alternative financing. Lenders will call your employer of record right before closing for this very circumstance. I highly doubt your lender will continue with the loan once they discover you do not have a job. 

    Do you have a family member you could borrow the funds from? Does your husband have any prospects? A short lapse in employment isn't a killer, but if he changes fields, it might be. 

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    BiggerPockets
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  • Chris MasonPro Member
    Moderator
    Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes
    10y

    Guidelines say the final verbal verification of employment must be no more than 10 days out.

    Typically, we do it 2-3 days before. 

    Our underwriting folks go on Google to find the contact info for your HR/payroll department, they don't necessarily call the number/name you give to your loan originator. 

    I think it's time to start looking at hard money, and call your lender back up as soon as your husband has his first paystub in-hand at his new job.

    You may want to ask your current "soft" money lender to speak with the HML guy and/or maybe even show the actual loan approval, loan application, credit report, etc, so he has assurances that you will be refinancing out of the hard money as soon as husband is back on the job.

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  • Jeff B.
    Buy & Hold Owner · Redlands, CA · Member since 2015 · 5k+ posts · 2k+ votes
    10y

    imo, apply don't ask, don't tell, yet tell the truth if asked.

    Make  sure you have the funds to close, and begin efforts to replace that job immediately.

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