Bought a home then laid off (pay, financing, credit, income)

[jobseeker2013]

Back in 2013 we bought a home. 3 months later I was laid off but found employment as a contractor for a year a month later. When the contract ended I found a contract to perm a month later. I am still there. Now we want to refinance. My question is, and I know it sounds paranoid, but because I was laid off 3 months later after getting the initial loan, does it hurt my refinancing? I had no idea it was coming and the bank assummed I had a steady job at the time of purchase.

[Lowexpectations]

Have you had two years of steady income?

[jobseeker2013]

I have other than those gaps. I took a pay cut of 15% however. My wife's income is steady

[LakeLifePA]

As long as it's in the same field and your credit is good you should be OK. They may ask for an explanation letter. Best to ask your mortgage company.

[GeoffD]

What matters to the bank or mortgage company is your credit rating, your debt to income ratio, and evidence of employment. The OP has seen two 1-month breaks in employment. Those don't matter. They could have just as easily been "I decided to take a month off between jobs." If the drop in income hits the debt to income ratio too much, that might matter. If they fall within the guidelines, it doesn't matter at all.

[mortgageboss]

Are you being paid on a W2 or 1099 basis? You mentioned contractor, so it could be 1099'd?


If so, 1099'd income is self employed status, and you need a two year history of that for the income to be considered stable. The underwriter will ask for 2 years tax returns and treat it like a business, income minus expenses equals usable income.

[Electrician4you]

Meh. I bought a house and I just switched companies. Same field. I was off work for a month. Just wanted to take a break and not see a construction vest a hard hat or porta John for a while. Still got the loan