*This article was updated in August 2021.*
Numerous variables determine whether or not you can buy a house, including your credit score, income, debts, and credit history. A DUI conviction is not something a mortgage company looks at because they do not do a criminal background check. However, a DUI can still affect your ability to buy a house indirectly.
While the banks do not pull a criminal background, they run an extensive background check of financial, credit, and employment history. When they dig this deep, your past DUI conviction may affect your qualification status – especially if that DUI forced you to lose your job, affected your income, and changed your stability.
How a DUI Conviction Can Impact Your Ability to Buy a Home in the Future
A DUI conviction carries long-term consequences that many defendants do not realize. Not only will you have a criminal record, but you will serve time in jail, pay fines, and you might have to attend court-ordered rehabilitation and alcohol education.
All of these impact you immediately after the conviction. While these can dramatically affect you and your loved ones, the long-term effects can impact your life and your home buying ability in the future because:
You Will Have Unaccounted for Unemployment Time
If you are convicted of a DUI, you will serve time in jail. The amount of time depends on whether it is your first or subsequent conviction and your blood alcohol concentration (BAC) at the time.
During your time in jail, you will have an unaccounted-for unemployment time that you must explain to any mortgage loan officer. They need explanations for your gap in employment, and you will need to tell them that you were serving time in jail to account for it. While they cannot hold the conviction against you, that unemployment gap may disqualify you, and you may have to wait a few years until you have a stable employment history again to reapply.
When convicted of a DUI in Colorado, you can expect the following jail sentences:
- First Offense – Anywhere from 5 days to 1 year in a county jail facility. Even if you are in jail for one month, that is a month of unemployment you must account for when you apply for a home loan.
- Second Offense – Anywhere from 10 days to 1 year in county jail.
- Third Offense – Anywhere from 10 days to 1 year in county jail.
Most likely, with a third offense, you will serve the maximum sentence. This means you may have to account for a year of unemployment.
Your Annual Income/Salary Might Change
The home loan amount you qualify for depends on your annual income. When you serve time in jail for a DUI, your yearly income will drop – or be non-existent for one year if you serve the full sentence. Mortgage lenders look back multiple years to determine your average annual household income. Therefore, if you recently served a jail sentence for a DUI, your yearly income and qualification amount could be much lower.
You May Fall into Debt Due to Income Changes
You cannot work while serving your sentence in jail, which means debts and obligations may not get paid on time. If your debts fall too far behind, it shows on your credit report. You may have records of collections, high debts, a history of late payments, and other negative notations on your credit history. All of these lower your FICO score and make you a high-risk investment for lenders, decreasing the chances of getting approved for a loan.
Even if your credit score is still decent, a history of late payments can make it harder to get a loan. You may have a higher interest rate if you are approved because you are a high risk to the lender.
Your Employment Capabilities Could Change, Depending on Driver’s License Status
You might have only served five days in jail, but you lost your driver’s license for one year. Without a license, you may be unable to work at the same job or find it challenging to work the same hours because you are now dependent on others or public transportation. This might affect your annual income, and it could also increase your debts. For example, you are now spending $200 per month on public transportation costs, which takes away from your income and makes it harder to pay down debts.
Perhaps you lost a higher-paying job because you did not have a driver’s license, so now you must accept a lower-paying position, which also affects your annual income.
Court Fines May Put You in the Red
You don’t just serve a jail sentence when you’re convicted of a DUI – you pay fines to the court as well. The fine for a first offense can be anywhere from $600 to $1,000. That is a big chunk of funds to come up with unexpectedly. You may have to skip paying rent or even your car payment that month to pay your court fine, which could leave you with a negative record on your credit history report.
Bottom Line: A DUI Conviction Can Impact Your Ability to Purchase a House
Yes, a DUI could impact your ability to qualify for a home loan in the future. Therefore, before you assume that serving just five days for a first offense is nothing to worry about, you may want to consider these long-term effects.
A DUI may prohibit you from buying a house for a few years – especially if you have to correct negative reports on your credit history or build your employment history back up.
Speak with an Attorney Regarding Your Potential DUI Conviction
If you or a loved one was recently arrested for a DUI in Colorado, now is the time to find an attorney that has experience handling these types of cases. Attorney Mark S. Rubinstein knows how dramatically a DUI conviction can affect your financial stability.
Speak with him today about your options during a free case evaluation at 970-704-0888, or request more information online.