Yes you can actually get a Sonoma County real estate loan, if you are unemployed. Think it’s crazy? You bet it is!
Unemployment is defined as the people who are receiving unemployment benefits from the government when proactively seeking employment. This is the standard description of unemployment. There is another factor of unemployment to consider and for our purposes that’s what we’re going to be discussing.
Trade professionals and other people who have unemployment benefits as part of their regular gainful employment are potentially eligible for mortgage loan financing. For example people in the construction field who work nine months out of the year, and receive unemployment benefits from the federal government in the remaining three months of the year, are not automatically disqualified from obtaining a Sonoma County real estate loan.
If you are unemployed, you can still obtain a Sonoma County Real Estate Loan, here’s how:
The key is your unemployment income must be apart of your regular job description. Procuring home loan financing whether a purchase or refinance will definitely be more challenging, but it is not impossible. You still have to qualify just as you would if the unemployment was not in the cards. This means your credit score needs to be in check, you need sufficient equity in the transaction and your debt to income ratio needs to be at least no more than 45% of your gross monthly income, ideally no more than 43%.
Looking at a scenario; John borrower’s income is $5000 per month, during the last three months of the year work for the employer slows down, so his employer puts John on unemployment income for the last three months of the year. His unemployment income is now reduced to $3000 per month.
This is going to be looked at one of two ways by the mortgage lender. The first way is the lender will be ultraconservative and qualify him based upon his unemployment income solely. This means the total house payment plus any other monthly revolving debt will be divided into $3000 per month rather than $5000 per month, making qualifying a little more challenging. The other option is to obtain a letter of explanation from the employer stating when John borrower will go back to work and what his income annually is. The lender will also obtain what’s called the verification of employment (a VOE for short) which will prove the existence of John borrower’s income so the lender can use his $5000 monthly income instead.
If you receive unemployment benefits as a regular part of your occupation, don’t be discouraged from trying to obtain a Sonoma County real estate loan. Been turned down? Get a second opinion. Most big banks have a certain set of criteria they cannot deviate from. This means if your loan scenario does not fit their box, you’ll have to look at other local lenders anyway. Just make sure to explain your mortgage loan scenario completely with as much detail as possible up front to whoever you’re going to be working with. The more information you can give the lender up front, the better your chances of finding a Sonoma County real estate loan, even if you are unemployed.