January 11, 2023 by

If you’re currently unemployed, you may be wondering if homeownership is still possible. The short answer? Yes, but you might need to jump through some extra hoops to make it happen.

In this article, we’ll cover our top five tips on getting a mortgage or refinancing without a job. Depending on your lender, personal finances, and more, you could reach your goals with relative ease.

1. Check the requirements

It’s no secret that reliable income is essential to the home-buying process. Lenders will want to know that you can make your monthly mortgage payments, so having income – or a substantial amount of savings – is important.

However, every lender is different. While reliable money is necessary for a mortgage, the requirements or accepted source of that money could differ from lender to lender. That’s why it’s important to always check your lender’s specific requirements and go from there.

Let’s use an example to better understand this concept:

Lender A offers great mortgage products, but only to borrowers whose income comes directly from a job (a common case).

Lender B offers similar mortgage products but also accepts big savings and money from side projects as sources of income. Naturally, this option is the right choice for prospective homeowners who may be unemployed.

As always, Total Mortgage loan experts are available to help with your unique situation. Find a branch near you for more information.

With this example in mind, let’s move on to our second tip for getting a mortgage while unemployed.

2. Use savings, reserve funds, or other income

With our first tip in mind, the income requirements for a mortgage can be flexible and make homeownership more attainable. If you have a significant amount of cash reserves or steady income not related to a job, you may find yourself in an ideal position for mortgage approval.

Here are some possible sources of income to help you get a mortgage while unemployed:

  • Savings: a nest egg large enough to cover mortgage payments (indefinitely or until employment is found)
  • Inheritance funds
  • Investment money
  • Retirement income
  • Alimony or child support payments
  • Income from rental properties or side work (non-permanent employment)

Wherever your money may be coming from, be sure to thoroughly document it and show it to your lender. There are plenty of ways to get income without a job – and with the right lender, those sources can be used to get a mortgage and buy a home.

3. Ask for help and co-sign

If you’re looking to get a mortgage while unemployed, it never hurts to ask for help. One way to do this is by finding a cosigner for your mortgage.

But what does it mean to co-sign on a loan? The short version: someone you know can put their name on your mortgage and assume responsibility if you aren’t able to make your payments. That person is called your cosigner, and having them associated with your mortgage will present less of a risk to lenders.

Cosigning is a great way to not only improve your credit and likelihood of approval, but also make your mortgage application more attractive as an unemployed borrower. This paired with one or more of the income sources above could be an easy recipe for homebuying success.

4. Get a non-revocable employment contract

If you’re currently unemployed but have a job lined up in the near future, try asking your employer for a non-revocable employment contract. This will essentially guarantee your employment (and income) for a specified amount of time. Even if your future employment will be temporary, it’ll give you a leg up during the mortgage process by showing lenders you’ll soon have the income to cover your payments.

5. Try relocating

In some cases, being unemployed but relocating for a new job could result in an approved mortgage. Think of your relocation as a new beginning; even if you’re just getting started with a new job, lenders will look at your future income and view it as a reliable method for mortgage payments.

Depending on where you relocate, the price of your next home could even be cheaper. Check out our top four cities for real estate for more information.

Your Options With Total Mortgage

At Total Mortgage, loan experts across the country are dedicated to understanding your unique situation and finding the best solution for your needs. If you’re unemployed and have questions about moving forward, apply now or contact a loan expert near you.

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