Uncomfortable mortgage questions are hard to ask, but experienced loan officers have heard them all before. Whether you’re wondering if you can get a mortgage with no job, buy a house after bankruptcy or while owing child support, or remove an ex-spouse as a co-borrower after divorce, the answers are more straightforward than you think.
From bankruptcy to back taxes: 10 real-world mortgage questions
When you have the right loan officer, no question is off-limits:
1. Can I get a home loan with no job?
A big part of getting prequalified and approved for a mortgage is verifying employment and income. Your lender will look at your debt-to-income ratio (DTI), W2s for the past 2 years, credit, and more. So, what happens when you lose your job before or during the homebuying process?
In most cases, if you’re unemployed with no other income source, you likely won’t qualify for a mortgage. If sudden job loss occurs after you’ve prequalified, it’s important to be honest. Failing to disclose that you lost your job before closing could increase your risk of loan default and foreclosure. After a job loss, your loan officer will recalculate your earnings, submit a new application, and explain your options.
2. How do I take an ex off my mortgage after I get divorced?
You’ve separated from your spouse. But can you divorce your mortgage? During a divorce, factors like mortgage payments, utility bills, home size, and family living arrangements all come into play.
Two options are frequently used to come to a resolution:
- Sell your house
- Have one spouse buy out the other
Selling and dividing the profits is a straightforward way to resolve homeownership after divorce. If one partner prefers to keep the house, the spouses will need to agree on a buyout figure. The spouse keeping the home can use a mortgage refinance to fund the buyout. In most cases, you can borrow up to 95% of your home’s appraised value to do this.
Work with a loan officer who feels like a friend.
3. Does my spouse have to be on the loan or deed?
Having a spouse as a co-borrower on a mortgage can help to improve your odds of qualification based on credit score, employment history, and income. But in some cases, you may have a better outlook by keeping your partner off the loan if their debt or credit score could hurt you. In the U.S., you aren’t required to apply for a mortgage jointly just because you’re married.
If you’ve chosen to borrow solo, adding your partner’s name to your mortgage in the future is possible. You can contact your loan officer with this request, and they’ll either decline or accept by making a mortgage modification. Refinancing your mortgage will also allow you to apply again as co-borrowers.
4. What happens to my mortgage when I file for bankruptcy?
When faced with bankruptcy, keeping your home is likely to be among your biggest concerns. Legally, a lender can’t punish you for filing bankruptcy by changing your loan terms or raising your rate. Some homeowners filing for Chapter 7 bankruptcy may be at risk of losing their home. A homeowner filing for Chapter 13 bankruptcy may be permitted to keep their house and continue paying their mortgage.
This is the time to call your loan officer to discuss your options, which may include a loan modification or reaffirmation agreement.
5. Does it matter if I owe back child support?
Child support arrears can show up as a negative mark on your credit, which factors into your mortgage qualification. Back child support that has reached the collection or judgment phase may make you look like a greater risk to a lender. Talking openly with your loan officer, as well as discussing the ways you’re trying to pay down the debt, could improve your odds of loan eligibility.
6. I didn’t pay my property taxes, and I received a letter from my lender. What do I do?
Homeowners pay property taxes to fund county and municipal services. If you didn’t or couldn’t pay your property tax bill, your local tax office will begin charging monthly interest. You may also be charged penalties for overdue payment. If this continues, a tax lien will be placed on your property, indicating that you can’t sell your home until the tax bill is paid.
If you’ve received a tax notice from your lender, it’s time to contact your loan officer. Failing to pay property taxes is considered an “event of default” and could put you at risk for foreclosure, even when making monthly mortgage payments.
Your loan officer can walk you through your relief options, including:
- Making late payments
- Requesting a tax deferral
- Establishing a payment plan
- Taking out a property tax loan to pay down the debt in monthly installments
7. Why do you need to know where the money deposited in my account comes from?
During the mortgage approval process, large deposits unrelated to your earnings require some explanation. An underwriter will typically ask for verification on a significant deposit. Confirming a large deposit is another way for an underwriter to see if you’ve taken on a new loan or line of credit, potentially affecting your DTI and the loan amount you can afford.
8. Do I have to keep the real estate agent I started with?
Some buyers may no longer mesh with their agent after the contract’s been signed. Ultimately, you’re in the driver’s seat because you’re the one making the investment. If you’re dissatisfied with the service you’ve received from your real estate agent, you can contact the brokerage and request another agent, select another agent from another brokerage, or ask your loan officer for a referral.
9. Will my mortgage be sold to another company after I buy a house?
Since a mortgage is paid back slowly, normally over a term of 15 to 30 years, mortgage lenders aren’t always able to service every home loan they fund. If they did, those outstanding balances would tie up billions of dollars in capital. So, borrowers’ loans are often bundled and sold to investors.
Selling a loan to a servicing company is one way many lenders stay in business; it frees up funds to take on borrowers and allows them to continue to lend at competitive rates. This practice is commonplace. If a servicing company takes over, there’s little to worry about on your part. Your mortgage terms and monthly payment will remain the same. You’ll just send your payments to a new company.
10. What do I do if I can’t pay my mortgage payment?
If you feel you can no longer afford your mortgage, contact your loan officer first. They’ll help you better understand your financial situation and offer solutions that can help. Your loan officer will ask for more information about your financial hardships, like why you can’t make your payment and whether the circumstances are permanent or temporary.
Your loan officer wants to help you keep your home and can explore options like mortgage refinance, loan modification, a repayment plan, mortgage assistance programs, forbearance, or short selling before more extreme actions are needed, like foreclosure. The Consumer Financial Protection Bureau also recommends meeting with a free HUD-approved housing counselor to help avoid foreclosure.
You don’t have to figure it out alone
Our loan officers have heard every question on the list, and they’re ready to guide you with honest answers. Get the support you need to navigate homeownership with confidence.
Sources deemed reliable but not guaranteed. For educational purposes only. Cornerstone Home Lending does not provide credit repair, debt consolidation, or tax advisory services. Nor does it provide legal advice. Please contact a qualified professional for specific guidance.