Here is the situation: You want to buy a home – but need a job. Is it possible? Can you find a lender willing to give you a home loan without supplying proof of steady income? Maybe you would like to refinance your current home but aren’t working – will you qualify?
It is not at all uncommon for lenders to require a job to get a mortgage, asking potential buyers to submit pay stubs and tax information to reflect employment. But what happens if you try to get a mortgage without a job?
You can exhale right about now. The answer is yes. You can still get a mortgage or move forward with a refi even if you aren’t employed. However, be prepared to meet a few lender requirements along the way.
Buying a Home Without a Job
Confirming that a borrower has steady employment is always one of the boxes lenders check off when deciding whether to give you a mortgage. They want to ensure that when they agree to invest hundreds of thousands of dollars into your purchase, you can repay it over time.
Without a job, how would you do that?
Believe it or not, people always buy property without a job. Think about it – individuals who are retired, recently divorced, or even those sitting on investment accounts can buy a home with a new mortgage.
The lender needs reassurance that you can meet monthly payments and will be able to repay the mortgage when it is due. This doesn’t have to come from a job. And, it doesn’t mean you have to be sitting on investments, either.
Let’s look at a few ways to buy a home without a job.
Have a Source of Income
Just because you don’t have a job does not mean you don’t have a reliable source of income. Again, the lender wants to confirm you have a way to repay your mortgage. Whether that comes from waiting tables at a local restaurant or alimony payments does not matter.
A few alternate sources of income that many lenders will consider instead of employment include investment income, retirement income (social security and/or pension payments), alimony payments, child support payments, rental property income, and so forth.
Find a Cosigner
If you have someone with a steady income and good credit who would be willing to step up and co-sign your mortgage with you, you may qualify without a job. Co-signers are often parents, relatives, or loved ones who want to help.
It is important to note that this person will be financially responsible for your mortgage, ensuring it is repaid. Otherwise, if you cannot make your payments, they, too, will be held liable for the outstanding balance.
Housing Counselors May Help
As their name suggests, housing counselors are those who can help you uncover how you can get a mortgage – and be able to prove you can pay it back. They are trained and certified in helping individuals plan to make this investment.
You can find housing counselors through the Department of Housing and Urban Development (HUD).
Using Investments and Cash-on-Hand
If you have cash reserves that you are sitting on, you may not need to work to get a mortgage or refinance your property. This money may have come from some wise investments you have made over the years, or it could be due to an inheritance you received.
Depending on the amount of the mortgage and the amount of money you have on hand, you may be able to get approved for a mortgage if the lender feels as though you have enough to make your monthly payments with ease.
Available Home Loans with No Job
Although there are ways to secure a home loan without a job, you may also want to consider the different types of loans available for those who aren’t working.
A mortgage that doesn’t require income verification is sometimes called a non-qualifying mortgage or NON-QM. This is a viable option for those seeking a home loan without a job – especially those who are self-employed or seasonal workers.
The downfall is that these loans often come with a higher interest rate than other options and additional requirements. But the approval rating is higher for those without a steady income source.
An Asset Depletion Mortgage
If you have assets, you may be able to use them as leverage to get approved for an asset depletion mortgage. In other words, you would be relying on your assets to cover your mortgage rather than an income.
The idea is not to take the assets to pay the mortgage but to show that you could do so if you wanted. Instead, you can pay your monthly loan however you want to – if it gets paid.
Refinancing Without a Job
Just as you can get a new mortgage without a job, you can also refinance without one. There are two main options available that let you do so:
The idea behind a refinance is to lower your interest rate and, ultimately, your monthly mortgage payment. These streamlined refinances are put in place to help you – and typically have very few qualifications you must meet.
So, Can You Get a Mortgage Without a Job?
Having a job may be helpful when it comes to meeting the qualifications for a mortgage, but it is not a necessity. There are ways to get a mortgage without one.
Just remember that the lender is taking a risk in giving you a loan. They want to have proof that you will be able to make your monthly payments. If you can provide it, then you may be well on your way to securing a mortgage.
Still trying to figure out where to start? Contact me today to discuss your mortgage options.