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      04-18-2011, 10:32 AM   #1
08rookie
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any mortgage guys here

can a bank cancel your mortgage if you lose a job but continue to make the payments in full, on time??

this is a two part question...and just answer this based on knowledge....im trying to create a hypothetical situation...

johny makes 50k a year and wants to buy a house. he contacts a mortgage company and gets pre approved for 175k based on his w2 and debt to income ratio. his credit is 780. the houses he looks at are in the 275-300k range. in order to get a bank to approve him for a larger amount, he needs to get another job making more money. so he gets a job as a sales rep for an advertising company and starts earning 800 a week.

question 1.... how long does he need to make 800 a week before he can get re-pre-approved for a larger amount?

question 2....if he gets re-pre-approved for sayyyy ummm 245k, he finds a house, buys a house, and he starts making payments....then he looses his advertising job, however he still maintains his mortgage payments on time from the help of family, friends and his savings will the bank contact him like " we see you lost your job, how will you be able to make these payments?"
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      04-18-2011, 10:37 AM   #2
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Buying a house that requires you to hold down a second job is admirable. But it is also very foolish. This hypothetical person has now put a burden on his family, friends, and inevitably the bank. However, it is my understanding they have no interest in speaking to you until you stop paying them. They are not constantly tracking your whereabouts or your spending habits. They just care that the check is in the mail.
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      04-18-2011, 10:42 AM   #3
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thank you
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      04-18-2011, 11:20 AM   #4
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Quote:
Originally Posted by 08rookie View Post
can a bank cancel your mortgage if you lose a job but continue to make the payments in full, on time??
No. But I bet they wish they could.

As long as you make your payments on time the bank can not do anything to foreclose on the mortgage.
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      04-18-2011, 11:26 AM   #5
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1. no idea how long. i know payment history is important though. maybe i'm speaking out of my ass, but i'd say 2 years good payment history would probably help you in getting approval for higher loan amount. maybe even 1 year. *shrug*

2. as long as you make your payments, bank cannot do anything. you may not get approved for another loan, but the existing loan will stay the same as long as you make payments on time.
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      04-18-2011, 11:32 AM   #6
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question 1.... how long does he need to make 800 a week before he can get re-pre-approved for a larger amount? Typically the second job needs to be seasoned for at least 12 months in order to be used for qualifying.

question 2....if he gets re-pre-approved for sayyyy ummm 245k, he finds a house, buys a house, and he starts making payments....then he looses his advertising job, however he still maintains his mortgage payments on time from the help of family, friends and his savings will the bank contact him like " we see you lost your job, how will you be able to make these payments?"
They will never know this person has lost their job. As long as payments are made on time they'll never suspect anything and quite frankly, won't care as long as payments are made. However, if a job was lost and payments became unmanageable you could then qualify for a loan modification which would reduce the monthly obligation.
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      04-18-2011, 12:05 PM   #7
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Based on the numbers, you look like you qualify to do an FHA loan. Your debt to ratio can go up to 55%..

On another note a second job needs a work history of 12 -24 months. An alternative would be a co-signer to pick up the debt ratio shortage. In terms of the future, lenders do not check your employment nor do they care as long as the payments are being made. But if there were to check and find the job no longer exists that information would have no bearing on your loan.
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      04-18-2011, 07:30 PM   #8
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Quote:
Originally Posted by Tuned1 View Post
question 1.... how long does he need to make 800 a week before he can get re-pre-approved for a larger amount? Typically the second job needs to be seasoned for at least 12 months in order to be used for qualifying.

question 2....if he gets re-pre-approved for sayyyy ummm 245k, he finds a house, buys a house, and he starts making payments....then he looses his advertising job, however he still maintains his mortgage payments on time from the help of family, friends and his savings will the bank contact him like " we see you lost your job, how will you be able to make these payments?"
They will never know this person has lost their job. As long as payments are made on time they'll never suspect anything and quite frankly, won't care as long as payments are made. However, if a job was lost and payments became unmanageable you could then qualify for a loan modification which would reduce the monthly obligation.
100% this.

Remember if you lose a job before you close, theoretically you can lose the pre-qualification as well
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