Possible Lay-off Right Bofore Closing

[Johnny Mack]

I’m currently looking at closing on a house hack in the next couple of weeks in PA. I’m an aircraft mechanic for a major airline and if there is no bailout I will be laid off. Good news is my old job called me and asked me to come back if I am laid off, I would be an aircraft mechanic there as well. My apartment lease is up on the first week of October and I’m wondering if I should tell the lender. If I am laid off, and if the seller will still finance the deal, or even if the seller wants to continue, it would be well beyond the end of my lease. Should I tell the lender before October 1st? What would they do if I don’t tell them and my current employer tells them that I’m on the list for layoffs when they verify my employment again right before closing? What is the process after I start at the old job? Thanks for any help.

[Paul Defngin]

@Johnny Mack first off, I am sorry that you’re going through this but the good news is that it sounds like you have an option to be gainfully employed with your prior employer. A lot of people are going through much different experience, and don’t have that option at the moment. 

Second, most lenders I know are doing a verification of employment 10 days before settlement and they are also having you sign a letter at settlement that you are still working. As lenders we based our decision on the income you provided and the expectation that it is going to continue. 

So, if you are on the list of being laid off, I recommend you let the lender know. The worse case scenario in your case here is that you postponed your scheduled settlement until you start the new job. I’m a believer that doing the right thing when no one is “looking” or “knowing” speaks volume of someone’s character. And more importantly, IMHO, good karma, if you believe in that, will reward you many times over in your journey by always doing the right things. 

Keep your head up and best wishes.