Can you get a mortgage while unemployed?
The process of buying a home relies heavily on proving that you’re financially stable enough to purchase one — which raises a question for some aspiring homeowners: Can you get a mortgage without a job?
A mortgage applicant’s credit score, total assets and down payment are also key criteria that lenders consider, but“borrowers need some form of income to pass a lender’s underwriting process,” saysGuyCecala, chief executive and publisher of Inside Mortgage Finance. “You can’t just say, ‘I have no source of income and I want to buy a house,’ because no lender will offer you a loan.”This means it can be difficult to get a mortgage while unemployed.
But whilea job is the most common source of income, it isn’t theonly one.Here’s how you might still be able to get amortgageifyou’reunemployed.
Ways to get a mortgage without a job
There are a few circ*mstances where, even if you're unemployed, you might still be approved for a mortgage. Here are some situations that may qualify you to get a mortgage.
You use a co-signer
One wayyou might be able toqualify for a mortgagewithouta job isbyhavinga mortgage co-signer, such as a parent or a spouse, who is employed or has a high networth. A co-signer physically signs your mortgage in order to add the security of their income and credit history against the loan. Essentially, if youcan’t makeyour mortgage payments,yourco-signer will be on the hook forthem.
You earn investment income
If you receive a substantial sum of money every month from stock dividends, capital gains or other investments, you mightbe approved for a mortgage. One caveat: Loans approved based on investment incometend tohave higher interest rates, says ToddSheinin, a loan officer atHomespireMortgage in Gaithersburg, Maryland.
You have other reliable sources of income
Lenders may also considerSocialSecurity income, rental property income, alimony, child support, and other forms of passive income when judging your loan application.
You're sitting on a lot of cash
If you have a high networth, you maybe able toqualify for a mortgage if you're unemployed by showing that you have access to significantcash reserves, such as money in a savings account, that allow you tocomfortably make your loan payments.
Explore your mortgage options
The bottom line:Qualifying fora mortgage whileyou’re unemployedwon’t beeasy. Butif you can show you have other sources ofincomeavailable to help you make yourpayments,thenit may not be impossible.
