Can Pandemic Unemployment Affect New Mortgage Application?

amother

Fri, Aug 07 2020, 10:32 am

Hi,
I am currently unemployed and cannot go out to work due to coronavirus and being part of the high risk population. DH works and brings in a decent amount of money Baruch Hashem. I was advised that I can file for unemployment. We can really use the extra money now but we are planning to apply for a mortgage shortly (within the next year). Will filing for unemployment affect our chances of being approved for a mortgage? Will it affect us financially in any other negative way?

amother

Honeydew

Fri, Aug 07 2020, 12:04 pm

I’m not a mortgage professional, but I am in middle of doing a mortgage and I think even unemployment income is better than no income at all. Mortgage bankers are very understanding these days about temporary unemployment due to covid, especially if you can show that you got your job back afterward.

You would be better off contacting a mortgage broker and ask them, they’re seeing a lot of this these days.

groovy1224

Fri, Aug 07 2020, 12:09 pm

I don't think filing for unemployment would affect you negatively in the future, since either way they will see that you were unemployed during this time. They likely won't factor in your unemployment income when figuring out your eligibility since it's temporary, but I can't see why it would hurt you.

If your DH makes enough money, your being unemployed might not matter that much anyway, as you may qualify for a decent enough loan on his income alone.

amother

Scarlet

Fri, Aug 07 2020, 12:10 pm

Yes.
We tried to refinance our mortgage at a lower rate, but DH is currently unemployed and they wouldn't give us a new mortgage. I am frustrated because it wasn't going to increase our amount owed, as we weren't taking anything out, and was going to decrease our payments by almost $1000/ month, money which would really help us right now-anyone actually.

groovy1224

Fri, Aug 07 2020, 12:12 pm

amother [ Scarlet ] wrote:

I'm sorry to hear it didn't work out.

But that's not really OP's question. Obviously being unemployed can factor in to whether or not you would qualify for a mortgage, she is asking if filing for unemployment benefits would further hurt her chances.

amother

Fri, Aug 07 2020, 12:24 pm

Thank you for your replies. We are planning to talk to a mortgage broker next week but wanted to get some perspective first. As the previous poster said, I cannot get a job now anyway so I will be unemployed in either case.

amother

Cerise

Fri, Aug 07 2020, 12:34 pm

Right now the guidelines are that you need to be back @ work for 1 pay period. Having been on unemployment in the period of Covid is not a problem if you'' be working again when applying

Simcha36

Fri, Aug 07 2020, 1:07 pm

jumping into the thread:
1. If you are serious I can connect you with a reliable honest mortgage person, pls pm me.
2. friend has a mortgage she cant pay due to unemployment - any new federal plans after July? (I know defer till July)
3. Morgage does depend on entire family income - they add all. Spouse, UI. All to dtermine your ability to pay, so I dont think its a negative.

dak11

Sun, Aug 09 2020, 12:25 pm

We are in the process of looking to buy a home and I collected Unemployment insurance during the shutdown because I had to reduce my hours due to not having childcare. If you are collecting unemployment they will not count it as income. The mortgage application will be based on DHs income alone. In my case they are averaging my income from the beginning of the year which ends up being a lot less than I made last year. Unemployment is not included at all.