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Ask Karen #001

Q: “My fiancé and I got pre-approved for a mortgage and are awaiting everything to be done, ready to start moving in a month. We found out he will be getting laid off this week. He is a union worker and this happens from time to time, not knowing how long he will be laid off. Will the bank still give us the mortgage?”

A: Lenders generally require that you are still employed in the same job with the same income as when you were approved. Even though your fiancé is a Union worker, the lender is basing its decision on the job and income confirmed at its underwriting of the loan. The same is true of any seasonal work.
Several things are checked and verified prior to loan closing, often even before final loan documents – not only employment but also credit. If any new credit or substantial changes have occurred, it may delay your closing and require reapproval from your lender. During the processing of your mortgage application, it is very wise to remember a few key points:
• Open ANY new credit, in your name or as a co-signor.
• Close ANY open lines of credit or allow your credit to be checked by any other creditor (this could affect your credit score).
• Increase your existing loan balances – In fact, this is the time to NOT even add to your credit card balances.
• Spend ANY of the funds you have said you will retain for down payment and reserves.
• Make ANY large deposits to your asset accounts that cannot be traced (“cash on hand” cannot be used as an acceptable source of funds explanation).

Karen Davis is regional vice president of The Mortgage House, Inc.-CA DOC #245892 She has over 36 years’ experience in the mortgage banking industry. Your e-mailed questions are welcomed through her website at:  or call her at 1-800-305-9731. This article is a forum to explore real estate principles. It is not intended to provide tax, legal, insurance or investment advice and should not be relied upon for any of these purposes.