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Does My Job Affect My Mortgage?

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Posted On: 11/16/2011

QUESTION:

Out of nowhere my company has decided to downsize. I will go from 40 hours a week with benefits and frequent overtime to 32 hours per week with far fewer benefits and no overtime. How does this impact my mortgage?

ANSWER:

The lender is looking for a monthly payment that’s made on time and in full. The change in your income and job status only becomes a mortgage issue if payments are late or not complete.

Given your sudden loss of income you may actually qualify for a mortgage modification. Check out the Home Affordable Modification Program at MakingHomeAffordable.gov.

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Did your employer reduce hours so everyone would still have a job? If yes, fewer hours may be a tough – but better – option than no hours.

A caution: Some people may suggest that you purposely miss a payment to qualify for a mortgage modification. If you do, your credit will take a hit and you may not qualify for the best-available modification options. Be sure to make your payments.

QUESTION:

We’ve sold our house, and settlement is in six weeks. We’re happy to have sold, but is there anyway we can delay closing for another month?

ANSWER:

Your buyers bought with the expectation that they will get the keys in six weeks. No less important, if settlement is delayed they could lose their mortgage lock and possibly 30 years of low-cost payments. Also, they may have sold their property or ended their lease based on the closing date.

If you really need additional time ask the purchasers if they can defer closing. Maybe a post-settlement occupancy agreement is possible – that is, closing as planned and then you rent back the property for a short period. There are a lot of complications and cautions here and a written agreement will be necessary. The buyers will need to check with their lender, broker and attorney for specifics.

Peter G. Miller is the author of The Common-Sense Mortgage and a veteran real estate columnist. Have a question? Please write to peter@ctwfeatures.com.

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