You may still be able to get a mortgage with no job, but it is more difficult. If you can prove to a lender that you have a sizable savings account, lots of assets or an alternative source of income, it may be possible.
Do Mortgage Lenders Look at Savings?
Mortgage lenders will look at any depository accounts on your bank statements; this includes any checking and savings accounts as well as any open lines of credit. Thus, if you do not have a regular income from a job, lenders will still take into account your savings to assess mortgage affordability.
If you want to highlight your savings to mortgage lenders, experts recommend showing lenders that you have enough money saved; the equivalent of six months or more of pay stubs.
Can You Get a Mortgage if You Have No Job?
If you are currently unemployed, whether by choice or after losing your job, it may be more difficult to secure a mortgage. Lenders typically look at a borrower’s salary in order to assess how much money they are willing to loan. Within this, many lenders will even specify a minimum income.
However, some mortgage providers are more flexible than others in how they define “income”. If this is the case, these lenders may accept savings accounts as long as you can prove that your monthly income is sufficient to meet payments.
If you are unemployed, you will usually need to have a good credit history as well as be able to put down a decent amount of down payment in order to secure a mortgage. Often, no-income loans, including mortgages, will come with higher interest rates and you will not be able to borrow as much money.
How Do You Qualify for a Mortgage When You Are Unemployed?
If you are applying for a mortgage and cannot prove employment, you will need to be able to demonstrate some source of regular income which could include savings. Lenders will also require a good credit history. Regardless of whether you are unemployed by choice, such as taking retirement, or have lost your job, you will need to prove to any lender that you can make regular payments on time.
One way that you may be able to qualify for a mortgage whilst unemployed is by having a co-signer; this might be a relative, spouse or friend. This co-signer will need to be employed or have a high net worth. Co-signers make the mortgage less of a risk for the lender as they are securing the loan with their income and credit history.
Other Ways To Qualify for a Mortgage if You Have No Job
There are many ways you might be able to qualify a mortgage even if you are not in full-time employment:
Part-time employment, freelance work or gig economy experience – if you are able to demonstrate that you are on an employer’s payroll on a partime or freelance basis, it will help your case with lenders as long as the income is sufficient to qualify for the mortgage you are trying to secure. This should present to the lender that you have been able to generate a fairly stable income and have been able to support yourself financially.
Diverse sources of income – if you do not have one full-time job but can demonstrate that you have more than one source of regular work, it can help present yourself as financially stable to any potential lenders.
Tax payment – showing lenders your tax returns can help verify your income, especially in the absence of regular paychecks.
Exemplary credit record – if you do not have traditional employment, a good credit score shows lenders that you are a reliable borrower and can comfortably meet your financial obligations regardless of your job situation.
Boost your net income – lenders are most interested in your net income and look at this to see if you can meet payments.
Increase your down payment – the higher the down payment you are able to put down for a property, the less a lender has to put forward and the less risky it is for them.
Undergo a pre-qualification or pre-approval – if you get pre-qualified or pre-approved before bidding on a house, it can help dispel any concerns for the seller.
How Can I Demonstrate Eligibility for a Mortgage if I Have No Job?
In order to take out a loan when you are unemployed, you will still need to demonstrate how you will be able to meet repayments and show lenders that you have a solid credit history.
If you are unable to prove employment, you will most likely need to share the following information:
- If you have missed any utility bill payments
- How much credit you currently have available
- If you have previously been declined for loans and how many times
- If you are on the electoral roll
Lenders will only accept mortgage applications for the unemployed if they can be sure that you are able to meet monthly repayments. Demonstrating that you are able to make payments on time and can manage debt in a responsible manner will make you more likely to qualify for a loan.
Can I Buy a House Without a Mortgage if I Have No Job?
Although mortgages are the most common way to purchase a home, there are other ways to purchase a house without the need to take out a loan, says When The Bank Says No.
Cash Purchase
If you are fortunate enough to have enough funds available to purchase a house outright, you may be able to save enough for a cash purchase. This is especially possible if you are a two-income household and can live comfortably off a single income for a few years.
In the case that you have no job, you will need substantial savings in order to afford this option or will need to be buying a house with someone who has enough income to support you both for the foreseeable future.
Sell Your Home To Purchase Another One
If you are already a homeowner and want to downsize or change living situations, you can sell your existing property and use the profit to purchase another home. This is only really a possibility if you have plenty of equity in your current home.
This can be a great option for those looking to downsize or move to a more cost-effective area where you could get more for your money.
Use an Investor
If you are looking to buy a house or property as an investment property, you may find it difficult to secure a mortgage, especially if you have no job.
Getting an investor to cover the expense of buying and renovating the home can be a good option. Many investors will be able to provide cash up front in order to buy the property and pay for any home improvements. Once the property is flipped and sold, you will split the proceeds with the investor.
