Income Changes During Refinancing Process
February 1, 2009 6:18 AM   Subscribe

I applied to refinance our house at the end of December. I've supplied all sorts of income information, but in January a decision was made that starting in February both my wife and I (we work in the same office) will be reduced to 70% hours and salary for a limited time. What do I need to do relative to the mortgage in process?

I have no way do know if they have done a verification of income yet, but don't believe they have. The arrangement with the office is that our reduced time and salary is for a three month time period (February through April). After that, in theory, we go back to full time. The reality is that we go back to full time if our practice finds more work. Otherwise there will be layoffs, which may or may not affect us. As I work in a fairly public profession, that is why I've submitted this anonymously.

The closest I found to this question is: http://ask.metafilter.com/35442/Should-I-tell-my-mortgage-broker-I-just-lost-my-job and the responses didn't impress me, as well as seeming out of date for the current environment.

We have completed appraisal and I've been told that the mortgage office has sent information to the closing agent, and a date should be scheduled soon. I may need an extension as the closing might be more than 45 days past my rate lock. I don't want to throw a monkey wrench into the already delicate works. On the other hand by *our* calculations, even at the reduced salary we should be okay (less than 28% of income going to mortgage and taxes).

I don't have a terribly close relationship with the mortgage officer, so could use some advice on what we are expected to do here. I certainly don't want to just let it ride if it could be construed as fraud. On the other hand, what we provided has been completely accurate to date, but we now know about new circumstances. If there is some form at closing that requires me to certify that the income information I provided is currently accurate I won't sign it.

All being processed in Vermont, if any know of state level variations on the rules about this.

Bottom line, am I better off calling the broker with this information or hoping we can close quickly and move on with life? Is there anyone else to check with that wouldn't potentially jeopardize my application?
posted by anonymous to Work & Money (2 answers total) 1 user marked this as a favorite
 
I think that if you don't tell them, and you get the loan based on false information, you will be committing fraud.
posted by Chocolate Pickle at 7:09 AM on February 1, 2009


Typically they call for verification of employment. The past years of tax returns verifies the income. So tell your HR person that all they are allowed to say is that you and your wife are currently employed and have been employed for X years.

I was able to start and finish a refi after being laid off.
posted by Gungho at 9:37 AM on February 1, 2009


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