Will The Lender Rescind Your Home Loan Offer If You Lose Your Job?

Leading up to the closing on your new home, it is important to avoid making significant financial moves that could lead to a lender denying your loan. Unfortunately, some situations, such as losing your job, are not preventable. Whether or not you lose your funding for the home after losing a job depends on your circumstances. If you have lost your job and are concerned you could lose your lender, here is what you need to know.  

Can You Hide Your Job Loss from the Lender?

Your loan agreement is considered to be a legal document. If it is found that you falsified information, you could face serious consequences, including accusations of fraud. By not revealing your job loss to your lender, you could be unintentionally falsifying your loan documents.  

Whether or not you want to hide the information from your lender is a decision that you might not have to make. Days before the closing, your lender will re-evaluate your creditworthiness to determine if you still meet its qualifications for a loan. Part of that process is verifying your employment information.  

What Actions Can the Lender Take?

The most obvious response from the lender is to rescind its loan offer. However, there is a possibility that the lender might exercise one of the many other options that are available to it.  

The lender could choose to move forward with the loan offer as it was initially presented. The lender is most likely to offer this option if you are married and your spouse has income that is high enough to qualify for the loan without your income.  

In some instances, lenders opt to push back the closing date. If you were fortunate enough to find a new job within a short period of time, a delayed closing gives the lender time to verify your earnings with the new employer and allows you time to re-establish yourself so that you can take on the loan payments.  

What Can You Do?

The best course of action you can take is to attempt to secure another position as soon as possible. Finding a new job can help alleviate any worries that you will not be able to make the payments.  

You can also review your purchase contract with the seller. If you have contingencies in place that would allow you to back out of the deal, you should consider it. You can start the home buying process at a later time when your employment situation is stabilized.  

Both you and the lender have many other options available to you to handle the loss of a job. Work with a skilled real estate agent to find the right option for you.