Being employed increases your chances of getting a mortgage without a job, but not having a job does not stop you from getting one. Maybe you have been thinking about owning a house but have recently lost your job; you can still fulfill your dream of becoming a homeowner regardless of your employment status.
If you’re looking to buy a house without a job, then these methods listed in this article will help.
Having someone who is employed or has a high net worth and willing to sign your mortgage is a start. That someone could be a spouse or family member. This person would be a co-signer, and the security of their credit history and income will be added against the loan.
Being gainfully unemployed also helps. If you have another source of income while unemployed, and your credit score and debt-to-income ratio are balanced, you should have a higher chance of getting a loan from mortgage lenders.
These sources of income could be life insurance, pension, alimony, or disability payments. Of course, they aren’t limited to only the ones mentioned above.
Liquid assets also serve as boosters, so if you have mutual funds, stocks, or bonds to your name, then you could create a list of them for mortgage lenders.
If the mortgage lenders are confident that your other source of income is a regular one with a sizable amount, they would be more willing to let you take a mortgage.
Now we’ve all heard the saying “saving for rainy days,” your mortgage deposit payment, and even subsequent payments would be your rainy days in this case.
Before approval, mortgage lenders would want to be sure that you can pay for up to two months at a stretch. You have to prove that you have a lot more saved up if you are unemployed and can afford six months of payments or more even without a job. This would put the mortgage lender’s mind at ease, and they would be more open to giving you a mortgage.
Another way of getting a mortgage without a job is by looking for a Seller’s Carryback.
It is when the owner of the property you want to buy finances the buyer. This transaction is carried out by signing a promissory note that states that the buyer will pay back on time and at an interest rate issued by the seller, who is also the property owner.
While it is similar to a regular mortgage, the difference is that payment would be made monthly to the seller instead of a bank. The seller still has the right to foreclose on the property like a bank or a mortgage lender would if you’re unable to make payments. This method has its disadvantages, one of which is the fact that it comes with a higher interest rate.
Another downside is that sellers have to get a license and registration, which they have to maintain annually. Many sellers would instead not go through that stress, which makes it challenging to find a seller carryback property.
One more way you could get a mortgage without a job would be by using the No Documentation Mortgage method. With this process, the lender, who can also be referred to as a “Hard Money Lender,” isn’t focused on your income, so you don’t need to submit any information about employment or annual income. The lender is only interested in your asset or whatever you would use as collateral to secure the mortgage loan and your credit score.
Before you decide getting a mortgage without a job, bear in mind how tasking it is to own a home. You will have to be sure that you can keep up with your monthly mortgage payments, and there are other bills to be paid after you get the house. Bills like utility bills, power bills, and even internet service bills might seem extra but necessary. If you have already finalized your decision to become a homeowner and don’t have a job, then the tips given above would make the process easier.