Tell Your Lender Right Away
You might be tempted to keep a job loss quiet, but that won't work. Your lender will verify your employment and income before closing — they're going to find out.
You're actually required to tell your lender about any changes to your employment or income. If you don't, you could be committing mortgage fraud. Not a good start to homeownership.
Is the Job Loss Temporary or Permanent?
How your lender responds depends partly on whether you lost the job for good or just for a while. If it's temporary, a written letter explaining when you'll be back at work can help — lenders need to know you'll have the income to make your payments.
If your income drops because of a salary reduction, your lender may shrink the mortgage to match what you earn now. If your income disappears while you're out of work — or if the job loss is permanent — the lender will likely pause the process until you have income again.
Did You Apply with a Partner?
If you applied for the mortgage with a spouse or partner, the lender might still approve you — but only if your partner is employed and has stable income. If their income alone can cover the loan terms, you may be able to close.
If their income can't support the original loan amount, you'll probably need to accept a smaller mortgage. That could mean walking away from your initial purchase and finding a home that fits your new budget.
If You Land a New Job Fast
If you're lucky enough to get a new job quickly, the lender will look at a few things before deciding whether to move forward.
First: the nature of the job and what you're earning. To close, you'll typically need to make the same amount or more than you did before.
Second: how long you've been in the new job before closing. Many lenders want at least 30 days of work history. You'll need to provide pay stubs and a letter of employment to prove you're actually employed.
What You Can Do Next
In any of these situations, talking to a mortgage professional can help lighten the load. They can walk you through your options based on where you are now and where you're headed.
