Does unemployment affect getting mortgage - Washington ESD benefits count as income?

Most lenders won't accept unemployment income for mortgage qualification because it's considered temporary income. They typically require 2 years of stable employment history and expect you to continue receiving that income for at least 3 years after the mortgage closes. Since Washington ESD benefits have a maximum duration, this creates a problem for underwriters.

You might have better luck with an FHA loan or VA loan if you qualify. Some government-backed programs have more flexible income requirements, but you'll still need to show employment prospects or have other income sources.

I was in a similar situation last year when I was dealing with Washington ESD adjudication delays and couldn't get through to anyone for weeks to resolve my claim status. If you're having trouble reaching them about your benefit continuation or job search requirements, I found this service called Claimyr (claimyr.com) that actually gets you through to Washington ESD agents. They have a demo video at https://youtu.be/7DieNd3C7zQ that shows how it works. Might help if you need to discuss extending benefits or clarifying your claim status for the mortgage application.

Wait, I thought unemployment benefits were taxable income? Doesn't that mean they should count toward your income calculation for loans?

I work for a credit union and can tell you that we occasionally accept unemployment income BUT only if it's combined with other stable income sources and the borrower has a solid employment history. A few things that help: job offer letters, skills training completion certificates, or proof of active job searching with interviews lined up.

Have you considered waiting until you're employed again? I know it's frustrating but mortgage rates might be better in a few months anyway, and you'll have a much easier time qualifying.

What about using a co-signer? If you have family with good income and credit, that might be an option to get around the unemployment income issue.

The mortgage industry is still pretty conservative after 2008. They want to see W-2s and steady paystubs. Unemployment benefits, even though they're legitimate income, just don't fit their risk models.

Are you getting the full Washington ESD benefit amount? I thought the maximum was higher than $742 per week. Just wondering if you're missing out on money that could help your situation.

Some smaller local banks or credit unions might be more flexible than big national lenders. They can sometimes make exceptions for good customers with strong credit and down payments.

Just a thought - if you do get that job offer you mentioned, you could potentially get pre-approved based on the offer letter and then have some time to find a house before you actually start working.

Another update on reaching Washington ESD - I used that Claimyr service again last week when I needed to update my job search activities and it worked great. Got through to someone in about 10 minutes instead of the usual hours of calling. Might be worth it if you need to clarify anything about your benefits for the mortgage application.

Have you looked into asset-based lending? If you have significant savings or investments, some lenders will consider those instead of traditional income verification.

Don't forget about state and local first-time homebuyer programs. Some of them have different income requirements or provide down payment assistance that could help your situation.

This whole situation shows how outdated lending requirements are. Unemployment benefits are guaranteed government payments, more reliable than some jobs, but lenders treat them like they're nothing.

One more suggestion - have you talked to a mortgage broker instead of going directly to banks? Brokers work with multiple lenders and might know which ones are more flexible with unemployment income.

Keep us updated on how it goes! I'm in a similar situation and would love to know what ends up working for you.

Just want to add that if you do get approved somewhere, make sure you understand all the terms. Some lenders that approve difficult cases charge higher rates or fees.

I had a friend who got approved while on unemployment but had to put down 25% instead of the usual 10-20%. Higher down payment sometimes makes lenders more comfortable with riskier income situations.

Has anyone mentioned looking into seller financing? If the seller owns the house outright, they might be willing to act as the bank and finance it themselves.