Author Topic: Closing on Refinance Soon - Now a New Job is Imminent - Need Advice  (Read 1674 times)

BrickByBrick

  • Stubble
  • **
  • Posts: 118
Hello Mustachians, I need some advice, especially from anyone with experience in mortgages/refinances:

So a few months ago I interviewed for a new job at Big Corp and was told shortly thereafter that it went very well.  I called a few weeks later and was told the process was still ongoing.  Flash forward 2 months to the beginning of August and I had never heard back so I assumed I didn't get it.  I decided to refinance my mortgage to increase my monthly cash flow a little bit (I wasn't looking at other jobs for the moment).  This past week I got a call from Big Corp giving me a contingent offer, followed by a brief meeting where they laid out the offer in detail.  The money, benefits, and position is a major improvement over my current position.  After a couple days and questions I accepted the position.

Now the rub, which I realized when I accepted the position.  I am scheduled to close on the refinance during the first week of September, and I was told it could take 30-40 days to get through the background checks and start the new position, putting the likely start date somewhere around 9/20 thru 10/1.  I called the mortgage lender to ask "hypothetically" what would happened if I got a new job somewhere around the close date (this may have been a mistake).  I was told it could obviously really screw up the ability to verify employment and thus screw up the refinance, though they may be able to have the new employer verify employment or extend the close date potentially long enough to get a new paystub.  He also mentioned that they would likely see a hard credit pull as part of a company's background check, but he also mentioned they don't see soft credit pulls.  So after that conversation I spoke with security from Big Corp and they said it's only ever a soft credit pull that they do.

So at this point it seems feasible that I could go to close and pretend like a new job is not a few weeks away.  However my understanding is that I must sign a document saying that employment will not change for 30 days.  I also know that this lender immediately resells mortgages in large batches, so if the new loan owner does a random quality check on mine and finds a new employer there could be issues for my lender and perhaps then issues for me?

My question is this:  Can I be held liable for some sort of fraud if they discover the employment change after closing, or are they up a creek?  Would they just realistically contact me and ask for updated employment information instead? 

At the end of the day, I would probably have to eat somewhere around $1,500 if the refinance doesn't go through prior to close because my new employment screws it up.  However my new job makes up for that in about a month or so.

I would prefer to be honest and upfront, but the guy I talk to seem to suggest strongly, despite the work arounds mentioned, that they would just pull the plug and walk (which seems stupid to me, but hey).  The main threat is I don't know what happens if they discover my change in employment post-close, so do any mortgage people here know?

Kakashi

  • Stubble
  • **
  • Posts: 118
Re: Closing on Refinance Soon - Now a New Job is Imminent - Need Advice
« Reply #1 on: August 24, 2016, 04:38:55 PM »
It's only fraud if you sign that document about not changing employers knowing ahead of time you are changing employers. 

What I would do is just ask Big Corp and get something official in writing about your hire, your salary and submit that to the lender with a letter of explanation from yourself essentially saying you accepted the position because it's even more income than your prior job. 

Yes underwriters are very picky and it may fall through and you may lose some money, but I personally would rather do it this way then to be caught lying and accused of fraud. 

Systems101

  • Stubble
  • **
  • Posts: 151
Re: Closing on Refinance Soon - Now a New Job is Imminent - Need Advice
« Reply #2 on: August 24, 2016, 08:39:00 PM »
I would prefer to be honest and upfront, but the guy I talk to seem to suggest strongly, despite the work arounds mentioned, that they would just pull the plug and walk (which seems stupid to me, but hey).  The main threat is I don't know what happens if they discover my change in employment post-close, so do any mortgage people here know?

I have been in a similar situation in the past, though not under my control.  I had signed a contract on a home, and then ended up with my organization sold to a new employer.  In paperwork terms, I was laid off and hired by a new company.  The organizational sale contract was announced after my housing contract signed, but the organizational sale closed 2 weeks before my house.

Be careful - my mortgage company called my employer the day before closing to verify employment... so you need to be thoughtful about what is going on and not assume the background check is a one time event that "passes" once they schedule a closing.

Just be honest.  I was very up-front about it, and while the person I was talking to hedged a bit on what would happen (they are uncertain and can't commit because they aren't the underwriter), as far as I can tell the underwriter didn't blink.  The approval came back in the same speed as others.  Keep in mind the guy you are talking to is trying to reduce the workload on his plate - it will be more work if you switch roles, so less $/mortgage for him.  I wouldn't worry about it (especially since the worst case is $1500)

In my case, I had a news report indicating what happened, along with a signed offer letter from new employer.  That letter HAD TO include the salary.  They also wanted more employment history (which for me was easy since I hadn't swapped employers in a long time), to ensure I wasn't just running around from disaster to disaster and a risk of losing my job soon.  That's all they needed.

I would do the same thing.  Talk to the mortgage person.  Offer to write a letter indicating what happened, which you pretty much have the text from your original post.  Point out it's an improvement over what you have, then also get a written, signed offer letter from new employer showing your new salary.


« Last Edit: August 24, 2016, 08:40:34 PM by Systems101 »

Dicey

  • Senior Mustachian
  • ********
  • Posts: 10156
  • Age: 61
  • Location: NorCal
Re: Closing on Refinance Soon - Now a New Job is Imminent - Need Advice
« Reply #3 on: August 24, 2016, 09:33:10 PM »
Hmmm, if you're staying in the same industry and getting more money, it should be not be an issue. Verification requirements are going to vary by lender.

We've bought 1 sfh for cash (flip), 2 with mortgages (rentals),and refi-ed another sfh rental to lower the interest rate in the past year. Every time, all they asked for was the most recent pay stub. If you are going to get to closing with a stub that's still current, I'd keep my trap shut and roll the dice. Since this is a re-fi, what they fuck do they care? If they hassle you, threaten to go with someone else and sue them in small claims court for any fees they don't refund.
And that 30 day no job change rule? I call BS. How can that be legal? Not everything lenders call rules is legally enforceable.

Dicey

  • Senior Mustachian
  • ********
  • Posts: 10156
  • Age: 61
  • Location: NorCal
Re: Closing on Refinance Soon - Now a New Job is Imminent - Need Advice
« Reply #4 on: August 24, 2016, 09:35:14 PM »
P.S. I get the "honest and up front" bit, but my idea of honest and up front is paying the mortgage with clockwork precision until the property is sold, refi-ed or paid off. That is all that matters.

Dicey

  • Senior Mustachian
  • ********
  • Posts: 10156
  • Age: 61
  • Location: NorCal
Re: Closing on Refinance Soon - Now a New Job is Imminent - Need Advice
« Reply #5 on: August 24, 2016, 09:51:59 PM »
Annnnnd congratulations on the new job!

mozar

  • Magnum Stache
  • ******
  • Posts: 2903
Re: Closing on Refinance Soon - Now a New Job is Imminent - Need Advice
« Reply #6 on: August 25, 2016, 08:43:49 AM »
When I did a refi, I did not have to sign a letter that my employment would stay the same for 30 days. I think I signed the paperwork for the refi a week after I started a new job. Hardest part was having to take pto from a job I had only been at for a week.