Refinancing Your Home While Unemployed
Your situation isn’t getting any better, and you’re worried – even terrified – that you cannot make the next month’s mortgage payment. Even if you get into a new job right now, how will you ever get caught up? Consider refinancing your existing loan.
As an unemployed mortgage borrower, it is not going to be easy for you to get a lender to give you a new loan to repay your existing loan. Consider it. What lender wants to pay off a big bill for you right now to enter into a loan you may not be able to repay? Refinancing can be an option in some situations, but you’ll need to prove to your lender that you can make payments.
Mortgages Refinanced in the United
First Step – Talk to Your Existing Lender
What you may not realize is that your existing lender has the tools to help you right now. Most of the time, lenders do not want to take on unprofitable or high-risk loans unless they can see an opportunity in them. That’s why it is important for you to speak to your lender openly about your financial situation. Here’s what they need to know:
Do you have any income? If so, how much of a monthly payment can you afford to make?
Do you have prospects of getting another job?
What type of income do you have in the meantime? This could include unemployment and/or part-time income.
If you can show your lender these things, refinancing may be something they are willing to offer to you right now. However, if you cannot show you have an income to pay the mortgage payment each month, the lender is going to be less willing and able to offer a refinanced loan.
You can talk to other lenders as well. However, if you are behind in payments and are facing a lost job mortgage lenders are not going to readily offer a new loan to you. Your existing lender may be a better option.
Can The Home Affordable Refinance Program Help?
The Home Affordable Refinance Program is a federal program that may be able to provide you with some support if you are an unemployed mortgage borrower. This program does have some very strict requirements, though. They include the following:
You need to be current on your existing mortgage. You should not have any 30+ day late payments over the last six months. If you’ve been behind before, you may not qualify.
You must live in the home. It needs to be your primary residence (though some investment properties may qualify).
You must have a mortgage loan that is owned by Fannie Mae or Freddie Mac.
You must have purchased the loan before May 31, 2009.
The loan-to-value ratio on the home must be over 80 percent.
If this sounds like it fits your needs, you can apply for the program. Generally, your lender can help you through this process.
Why Refinancing Is Worth Looking into Right Now
Refinancing can help you accomplish a few goals. First, it can help you to secure a lower monthly payment if you qualify for it. For example, you may have the ability to extend the length of the loan to lower monthly payments. A lower interest rate can help you in this way, too.
Second, your credit score isn’t damaged in the process. Refinancing doesn’t hurt your ability to sell the home later and buy another one if you would like to. Most of the time, refinancing also gives you somewhat of a clean start. You can make payments on time easily because you can now afford them. That may boost your credit score over the long term.
What About the Long Term After Job Loss?
The key to being able to refinance a home loan is showing the lender you have the financial means to make your loan payments. Without a job, that’s not always possible to do. And, if you get a job rather quickly, you may have a hard time proving to the lender that you have long-term job security, another factor in obtaining a new loan
If you are unsure if you qualify, it doesn’t hurt to speak to your lender about your options. Most will work with you to better understand what options may apply in your situation. Refinance before you get behind on your loans. If refinancing is not an option, HomeGo can relieve your financial burden and buy your house as is.
HomeGo Can Help.
For many people, selling their house in as is condition is the simplest, most straightforward solution to job loss.
HomeGo is the nation’s largest home buying company, and we’re bringing professional experience, transparency, and assurance to homeowners who want an easier way to sell.
Check out more of our information on job loss.
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