Samantha and James face a dilemma when James is laid off before closing on their home purchase. They must inform their lender of the layoff to avoid mortgage fraud accusations. If they can’t afford the loan on one income, they risk losing their deposit. They could make a larger down payment to lower monthly costs.

The couple planned to buy a $600,000 home with a 10% down payment, borrowing $540,000 at 6.547% APR. With Samantha earning $170,000 and James losing his $90,000 income, they need to assess if they can afford the $4,305.06 monthly cost. Reworking the loan with a larger down payment is an option.

Despite having savings and a bonus, Samantha and James must consider if spending 45% of Samantha’s take-home pay on the mortgage is sustainable. They could lower the monthly payment by putting more money down but risk financial vulnerability in the future. They should carefully weigh all options before proceeding with the purchase.

If the couple can’t afford the mortgage on one income and the lender won’t work with them, they may need to walk away from the purchase. Losing their deposit is less risky than struggling to afford the mortgage later on. Waiting to buy may be a safer option if financial constraints are a concern.

Read more at Yahoo Finance: My partner got laid off the week we were closing on our first home. Should we pause or renegotiate the deal?