Job changed after receiving conditional loan approval (financing, student loan, contract)

[DP1987]

So what happens if you changed your job after you received a conditional approval for your loan?

My ratios were affected as follows:
DTI (PITI/monthly gross income)
Exclude old & new job: 30%
With old job: 19.5%
with new job: 20.5%

Total DTI (incl. Student loan payments)
Exclude old & new job: 40%
With old job: 25.9%
With new job: 27%

Loan is currently with the underwriter and I am losing my sleep over this.

Few more details:
2 borrowers. 1st borrower: 5yr job history. 2nd borrower: 12yr job history on a part time position and recently changed the full time job less than a month ago. (Had 5yr exp at the old job)

Biggest issue being that the old job was permanent and the new job is contract based with strong possibilities of it being extended. Unfortunately the written contract is only through the end of this year.

[Jkgourmet]

Originally Posted by DP1987

Biggest issue being that the old job was permanent and the new job is contract based with strong possibilities of it being extended. Unfortunately the written contract is only through the end of this year.

There's your problem. they other borrower doesn't have a job anymore. They are a temp. At least, that's the way the underwriter will see it.

Can you qualify without that income? Probably not, given the ratios you included in your post.

Do you have to tell the underwriter? Yes, because they are going to ask for pay stubs just before you close. Yes, because you're going to sign something that says there have been no material changes in employment.

I suspect you've blown the mortgage. I'm sorry.

[DP1987]

Most common ratios I see are 28/36. I am only slightly over them if I completely exclude the new job.

Can a seller terminate the contract if they find out that one of us lost our job? Or do they pretty much have to wait until closing date?

[FalconheadWest]

A seller can't terminate a contract before they "think" you can't obtain financing. You need to tell the mortgage people ASAP about your situation and hope that you don't find out at the last minute you don't qualify. That's rude to the sellers, and you're going to lose your earnest money if you're outside the dates of the initial approval.

[DP1987]

Originally Posted by FalconheadWest

A seller can't terminate a contract before they "think" you can't obtain financing. You need to tell the mortgage people ASAP about your situation and hope that you don't find out at the last minute you don't qualify. That's rude to the sellers, and you're going to lose your earnest money if you're outside the dates of the initial approval.

We passed the initial mortgage date which was july 31st. Closing is Aug 29th.

We already informed the broker of this change and she is trying to figure out a way to resolve this issue. Can they keep the earnest money if I get denied due to a job change? I mean it wasn't a voluntary change from our end.

I said I will secure a mortgage a month in advance but is that really set in stone? Should I ask them to extend if they bring it up and if not then just assume I have til the end of August to resolve everything?

[FalconheadWest]

Originally Posted by DP1987

We passed the initial mortgage date which was july 31st. Closing is Aug 29th.

We already informed the broker of this change and she is trying to figure out a way to resolve this issue. Can they keep the earnest money if I get denied due to a job change? I mean it wasn't a voluntary change from our end.

I said I will secure a mortgage a month in advance but is that really set in stone? Should I ask them to extend if they bring it up and if not then just assume I have til the end of August to resolve everything?

You're going to need to read your contract and ask your agent, but in Texas, if you've passed your financing date for approval, the earnest money will go to the seller. Doesn't matter if it's your fault or not. In my area, the only way you would get your earnest money past that date (beyond other contract contingencies) is if the house itself prevented you from a mortgage like title or survey issues.