Unemployed but need loan

[Quinton Oake]

Hello, I have become unemployed since buying a rental property due to a car accident in January of this year. I am in the Tampa, Florida area. The mortgage I took out was a hard money loan, that at the time I would have not had a problem obtaining financing but needed the money fast. I am now in need of refinancing to get that loan paid off before it comes due in December.  The property is not in the best area but is currently rented at $1150 per month (and current) and the loan I have is $30,0000 but I would want $45,000. The value of the property is anywhere from $85,000 to $93,000 (based on other sales in the neighborhood) over the past year.  

My question is, are there lenders that are willing to do a loan to an unemployed person but with a 2 year history of making payments. Including since January of this year with NO income? Ideally I would like to get a 20 year loan on the property with no prepayment penalties around the 6 to 8% range.

[Chris Mason]

Originally posted by @Quinton Oake:

Hello, I have become unemployed since buying a rental property due to a car accident in January of this year. I am in the Tampa, Florida area. The mortgage I took out was a hard money loan, that at the time I would have not had a problem obtaining financing but needed the money fast. I am now in need of refinancing to get that loan paid off before it comes due in December.  The property is not in the best area but is currently rented at $1150 per month (and current) and the loan I have is $30,0000 but I would want $45,000. The value of the property is anywhere from $85,000 to $93,000 (based on other sales in the neighborhood) over the past year.  

My question is, are there lenders that are willing to do a loan to an unemployed person but with a 2 year history of making payments. Including since January of this year with NO income? Ideally I would like to get a 20 year loan on the property with no prepayment penalties around the 6 to 8% range.

 Hi Quinton,

This may or may not be applicable to you, but if by "unemployed" you mean "on temporary disability, but my job is waiting for me when I get better, and we have an estimated return to work date," than this would be a scenario where ADA trumps ATR and you can still get a traditional mortgage.

Fannie guideline on long-term/permanent disability, on social security disability, and on what may be applicable to you: "temporary leave income," which includes short term medical disabilities.

For that last one:

Just like women/men on maternity/paternity/pregnant leave, a gap between temporarily reduced income due to medical condition, and your normal income, can be made up for using asset depletion. That means that if you normally make $5k/mo, but temporarily make $3k/mo until you return to work after two mortgage payments are due, but can show at least $4k extra liquid, your full $5k/mo income can be used to qualify you. That $4k, spread across the two months at $2k each, makes up the difference between $3k and $5k for the two payments that are due.

Now, here's a pop quiz for all you hotshots. Tomorrow I will be in continuing education for eight hours of my life that I can't get back, to maintain my license. Am I going to learn or re-learn truly useful stuff, like the above for how to help mothers with newborns get a right-sized house for the expanding family (which incidentally might benefit Quinton the REI in a bad HML), or is it going to be a bunch of useless mind-numbing junk that makes me want to contemplate self-harm? Hmmmm