What Happens If I Lose My Job After My Mortgage Preapproval?

When you’re considering buying a house, it’s always important to be prepared for things like loss of employment. With the current state of the economy and the ongoing pandemic, many Canadians wonder if this is the right time to buy a house. What exactly are the consequences for their mortgage if they lose their job? More importantly, what happens if you lose your job after you are already preapproved for a mortgage?

What to do when I lose my job after a mortgage pre-approval


Like any other type of loan, mortgage lenders want to see a consistent employment history with consistent income. In addition, they want to make sure that once they’ve approved you for your mortgage that you’ll be able to make your mortgage payments in full and on time. 

You’ll have to provide documentation proving your employment status and history. Your mortgage advisor or lender will let you know precisely what you need to provide to prove your employment history.  


If you’ve already been preapproved for a mortgage by a lender or are currently in the process of purchasing a home and you lose your job, you need to let your lender know immediately. If you hide that you have lost your job, this is considered fraud. 

There are a few scenarios where you will still be able to go through with your home purchase and requalify for your mortgage. For example, if you were to get another job right away and in the same field as your last one, you would be able to requalify. 

Your loan might not be exactly the same, but your mortgage advisor will be able to help you walk through the steps necessary to requalify. However, if your new job has a probationary period, it’s possible that you won’t be approved when you requalify. It’s better to wait until after your probationary period ends. The lender may require that you have passed your probationary period to requalify for your mortgage. 

The last situation where you might be able to proceed with your home purchase as expected is if you have other forms of income. If you have another significant and consistent income form, your lender may consider proceeding as normal. For example, if you have income from investments, rentals or retirement, these forms of income can be considered. 


During the pandemic, workers were being temporarily laid off due to restrictions in many cases. So, can you proceed with closing on a house if you’re temporarily laid off? Most lenders will typically want to take a “wait and see” approach to see if you’re called back to work before closing on your purchase.


Typically, you cannot use Employment Insurance (EI) as a form of income to qualify for a mortgage. This is not considered a reliable source of income, and most lenders will not approve someone without a steady job. Sometimes, lenders will make an exception if you’re a seasonal worker or work in industries like fishing or construction, where it is cyclical. 

In these cases, you’ll have to prove that you’ve been working for at least two cycles. However, this is not an ideal situation for most mortgage lenders, and it’s possible they won’t approve your mortgage application.


The most important thing to do once you’ve lost your job is to speak with your mortgage associate. They’ll be able to tell you whether or not they can continue with your mortgage loan or what steps you’ll need to take to requalify.

If you’re not sure what to do, give our mortgage advisors a call, and we can help provide some insight into your situation. Contact our team at The Mortgage Group Inc. here