Is it possible to qualify for a home loan mortgage while collecting unemployment?

Surprisingly this is a very common question as people in the union or people with jobs that frequently go on and off unemployment. Lending guidelines are a little bit different from each lender but the big answer is no. The short of the answer is, it depends on how long you've been on unemployment, what your income is like and if you have anybody else in the home planning to be on the loan.Can I buy a house on unemployment?

If you are the only one obtaining the home loan you would need to be working and able to provide at least 30 days of paycheck stubs in order to prove to the lender that you have a job. This 30 days is the absolute minimum. Typically a six month to nine month paycheck stub proof is required so be sure to check with the different lenders about their individual practices.

 

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If you have a spouse that is on unemployment the lenders will qualify the loan solely on the spouse or the partner bringing in the income and will not count to the unemployment income. This means that the couple may find a home but not as a large or as large of a home loan as they could get if both partners were working.

Alternatively, if you're both working yet once you have purchased the home and your home loan is pending and one of the partners loses their job or goes on unemployment, this could drastically change the financing, the credit score and the interest rate and may even cause the loan to fall through.

 

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What about refinancing?

Even if you are able to establish an equity position in the property with a substantial down payment, the lender will still want to know that you have the means to make the monthly mortgage payment. Refinancing is just the same as obtaining a brand-new home loan even though it is for the same property in which you currently live.

It all comes down to time, the situation, and if you have any other income in the house. If one spouse or one partner is on unemployment the lender will base the qualifications solely on the partner bringing in the income. If a borrower recently got a job, the lender will want to see at least 30 days if not more of actual pay stubs so they know how much money the household is bringing in each month.

 

For more information feel free to give me a call at any time. I have lenders in the area that work specifically with distressed borrowers or those that have gone through a foreclosure or short sale and love to help you get back on track to homeownership.

 

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