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Unemployment makes it harder to qualify for, refinance mortgage

Record spikes in jobless claims are creating major roadblocks for consumers who thought that they’d like to save money by snagging a lower mortgage rate. 

Maybe, you thought you might even refinance the mortgage to get your hands on some cash now by taking out some equity that’s built up as your home’s value has grown? Maybe you’re looking at your house as a piggy bank after losing a job during the coronavirus pandemic?

It’s a thought, but it’s a strategy that likely won’t work. 

“For people who are unemployed, it’s going to be more difficult to qualify for a mortgage at this time,” said Bill Banfield, executive vice president of capital markets for Detroit-based Quicken Loans. 

“The ability to repay debt is based on the person’s income.” 

Create a budget.
When you’re considering purchasing a new home, make sure your finances are in order and you have an appropriate price range.

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It’s not to say that people who aren’t working can’t refinance their mortgages, he said. Retirees, for example, may be able to refinance a mortgage if they can point to a steady pension or annuities that can be used to repay the debt. 

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