My wife and I are in the process of buying our first home. We close on October 5th. The issue is, my wife's job is under contract and that ends on September 27th, a week before closing. There is a chance they could extend her contract, that has always been a possibility. We are not worried about money. We know she can find another job soon. But if she is laid off at the time of closing, can the lender back out?
Absolutely, if the lender becomes aware that your wife is no longer in the same position, they will not close the loan. Verbal verifications of employment are typically done a day or two prior to closing. If your wife's contract is not extended (or even if she accepts another job), it is highly unlikely that your purchase will close as planned. If you could move up closing, might be a very good idea!!
Yes. Your pre-approval/commitment letter should state that the approval is contingent upon the criteria disclosed at the time of application remaining unchanged. If they were qualifying you based on your wife's income and it will no longer be there, then this changes the game.
With that being said, you should have a pow-wow with your loan officer ASAP to see if you can qualify using JUST your income.
Best of luck!
I would also explain to her employer the importance of extending the contract, even if it is for a short period of time. Make sure it is writing just in case the lender gets cold feet. Honestly, I would take this route before talking to your lender. If your lender even suspects that your income will drop, they may walk away.