May 27, 2014 by 12 Comments

To qualify for a mortgage loan you must first convince lenders that you can afford to make the monthly payments that come with it. It’s little surprise that this is much more difficult if you’re currently unemployed.

It’s not impossible, though.

Mortgage lenders rely on several factors when determining who qualifies for a loan. Your debt-to-income ratio is one of the most important. Most lenders want your total monthly debts, including your new mortgage payments, to equal no more than 36 percent of your gross monthly income. If you are unemployed and don’t have a steady stream of income coming in from a full-time job, it will be more difficult to get your debt-to-income ratio under this figure.

But maybe you’re a special case. Maybe you have enough income from other sources so that your debt-to-income ratio is under 36 percent even without a job. This can happen if you receive rent payments from several tenants. If can happen if you receive royalties on a regular basis. It might even happen if you receive regular payments because of a legal dispute.

Remember, lenders consider all regular monthly income, not just dollars from a job. So such income as Social Security payments, disability payments, unemployment checks and alimony payments all qualify as income.

It helps, too, to have a strong credit score. Most lenders consider three-digit FICO scores of 740 or higher to be excellent ones. Such a score shows that you have a history of paying your bills on time. Lenders will be more willing to give unemployed borrowers a mortgage loan if they have a strong credit score.

There’s another issue here that has happened all too frequently as of late: What if you become unemployed after taking out a mortgage loan and, because of this, you can no longer afford your monthly payments?

Your best bet in such a case is to immediately notify your lender. Your lender might be willing to provide you some relief, such as lowering your interest rate or providing you with a three- to six-month break from making your payments. Some might even forgive a portion of your loan, leaving you with both a lower balance and lower monthly payments. But if you don’t call your lender, you’ll never find out if such relief is available.


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12 Comments

  • abigailkatherinelewis007@gmail.com' Abigail says:

    I am a single mother of two living with my mother,sister,nephew and two nieces im in desperate need of my own space i will be studying at Damelin next year!

  • Carter Wessman says:

    Hi Abigail,

    At this time, our services do not extend outside of the U.S. Good luck in your search!

    Carter

  • Jlabonde@gmail.com' Janelle says:

    I’m a single mother of 3. I receive child support and bring in some income from a consignment business. My credit is poor. would I qualify for a home loan?

  • Carter Wessman says:

    Hi Janelle,

    It’s hard to say without having more information. If you would like, we could have a loan specialist contact you to discuss further.

    Carter

  • gina_rawlins27@yahoo.com' Gina Rawlins says:

    Hello I am a mother of 2 an one on the way. I am currently unemployed an have poor credit. I reside with my aunt an her family, is there a way I maybe able to apply for a single family home?

  • Carter Wessman says:

    Hi Gina,

    I can’t offer a definitive answer without more information. If you would like, we could have a loan specialist contact you to discuss further.

    Carter

  • c_laboo@hotmail.com' carla says:

    I am unemployed with one child. I receive 600 in child support and 175 ssi monthly. My credit score is 713. Is there any way for me to qualify?

  • Carter Wessman says:

    Hi Carla,

    It’s tough to say without more information. Your best option would talk to a loan specialist. I can put you in contact with one if you’d like.

    Carter

  • Hello I am Autistic and I am epileptic I have 1 yea old child and ive been unemployed since ive turned 18 no luck with work at all :(. Could I still get a Mortgage ? I recive Disability living Allowance & Employment Support Allowance & I get child tax credit & child Benefit for my child.

  • Carter Wessman says:

    Hi Saffron,

    It’s hard to say without more information. If you’d like, you could call and speak to a loan officer and they’d be able to offer more insight. You also might want to consider contacting a HUD housing counselor: https://www.hudexchange.info/programs/housing-counseling/.

    Carter

  • bkissell67@gmail.com' Beth says:

    Hi, my name is Beth and I live in Illinois, my husband and I are looking at relocating to Panama city, FL. My husband and I have always worked, but in the last month my husband’s place of employment closed down, he worked for them for 26 years. We know there would be no problem getting a job if we relocate, but he is on unemployment, his credit score is 587 and I have no score. In order to re locate we need a place to live when we get there. We need help and don’t know what to do. Can you help. Thanks for listening.

  • Carter Wessman says:

    Hi Beth,

    Unfortunately, at Total Mortgage, we require proof of employment in order to qualify for a mortgage. Best of luck.

    Carter

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