Home Loans and Support

Can You Qualify for a Mortgage on Workers Comp?

A person who is on workers compensation may still be employed despite the injury that has caused the provision of the the workers comp. When a person wants to get a mortgage loan, his income will still be evaluated to determine his capacity to repay the loan for the first three years of the loan. If he is out of work and he is only receiving workers comp as income, he may find that it would be very difficult to get a mortgage because hypothetical income cannot be used to determine whether a person can qualify. He cannot simply declare that he will get a job soon.

However, the workers comp may still be considered and it should be determined whether it is reasonable to expect that this income will continue for the first three years of the mortgage. If the borrower plans to retire within this three-year period, the effective income that will be considered will be based on what can be documented as his retirement benefits. This could be his Social Security pension and other retirement benefits.

For a borrower who has found a new job, his expected salary can be used in determining his income to determine if he could qualify for a mortgage loan. He must be able to show that the job has been guaranteed through a contract of employment that is non-revocable. He should also begin working within 60 days after the mortgage loan has been closed. The potential borrower must also have enough cash reserves and income during the time that he is not yet receiving his pay. The amount of savings and the income that he has should be sufficient for the monthly payments. This is a situation that is common among doctors who will start their residency or teachers who will begin teaching at the start of a school year.

However, if the employment will begin more than 60 days after the loan is to close, he may not qualify for a mortgage. He will have to wait until he could present a payslip or any other indication that he has started in his new job before he could qualify for a mortgage.


About Moe Bedard

My name is Maurice Bedard, but most people call me Moe. I am the founder of America's #1 Mortgage Forum, LoanSafe.org, and also a website design firm called We Create Web Designs. My online work has been featured in the New York Times, LA Times, Fox Business, and many other media publications. I currently live in Carlsbad, California with my beautiful wife and children.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Get free unbiased help with your tough questions. Start your own threads and post replies with over 60,000 people just like you.

Connect with us

LoanSafe Forums

TESTIMONIALS

"Hello Moe, I just wanted to tell you, your website has saved my life (literally), I stumbled on your site in the middle of losing my home, I was able to network with people going through the same thing as I am. I didn't feel alone anymore, I have tried to give back and counsel those that haven't walked in my shoes yet. We hear so much about what is wrong with America, I just wanted you to know, you are whats "right" with America."

Nina Mitchell
Loansafe & MoeSeo Inc. © 2014 | LoanSafe.org is not a bank, lender, mortgage broker, law firm or affiliated with the US Government. Privacy Policy