Can You Get A Mortgage Without A Job?

If you’re currently unemployed, you may be asking: Can I get a mortgage without a job? After all, lenders typically want to see proof of employment before they’ll approve a home loan. Similarly, you might also be wondering: Can you refinance your home if you are unemployed? Thankfully, the answer to these questions is yes, you can refinance or get a home loan without a job − although, you will need to satisfy some lender requirements.

Can You Get A Home Loan Without A Job?

Absolutely, yes. Retirees, divorced parties, and people with significant bank investments get loans every day. In fact, it’s possible to get a mortgage without employment as long as lenders are able to determine that you can repay the loan. As long as you’re able to provide a potential home mortgage lender with proof that you can to meet your monthly mortgage obligations regularly and on time.

Understanding Employment History For Mortgages

The reason that lenders ask for your employment history is because it can be an important indicator that you will be able to make your regular monthly mortgage payment. It's not enough to simply be employed, most lenders want to see a lengthy employment history (often 2 years of employment history). An employment history shows lenders that you are in a stable situation, and aren't likely to run into a situation where you get a loan and then have your income situation change.

Types Of Home Loans For Those Who Are Unemployed

If you are unemployed or have non-standard income, it is still possible to get a mortgage — there are specialized home loan types available:

Asset Depletion Mortgage

An asset depletion mortgage presents a way for you to qualify for a home loan by leveraging a substantial amount of assets, rather than relying on income that you might receive by way of steady employment. It essentially leverages your liquid assets as a source of income. This can show that you possess enough funding to pay for the mortgage and day-to-day living expenses, allowing you to qualify as a borrower. Your assets are only used up-front to illustrate that you have the ability to make the monthly mortgage payments − you don’t have to immediately cash them in at closing.

No Income Verification Mortgage

There are also certain types of nonqualifying mortgages that do not require you to present income verification. These loans may be a good option for those who are self-employed or have seasonal income, although they may come at higher interest rates, and with additional terms and conditions attached. Note that Rocket Mortgage^® does not currently offer these types of mortgages, but we want to make sure you’re aware of your options.

Can You Refinance Without A Job?

It’s also possible to refinance your home if you don’t have a job. Here are some of the options available to unemployed individuals looking to start a refinance.

FHA Streamline

An FHA Streamline Refinance is designed to help homeowners with an existing Federal Housing Administration (FHA) loan lower their interest rates and reduce their monthly payments with less time and effort. You may be eligible to obtain one using a simplified process that requires you to meet a minimum of qualifying factors − and your lender may not even need to verify your income. This allows for an easier and more rapid approval process.

VA Streamline Refinance

A VA Streamline Refinance is backed by the federal government. However, it’s specifically designed to help veterans and service members refinance their existing VA loan from the Department of Veterans Affairs (VA) to obtain lower interest rates, smaller monthly payments or different terms.

How To Get A Mortgage Without A Job

There are several ways that a prospective home buyer can get a mortgage without a job, either alone or in tandem with another individual.

You Have Other Reliable Income

As you might imagine, lenders may consider other reliable sources of income besides a full-time job when researching and determining whether you qualify for a mortgage. After all, there are many ways to bring in money these days, not all of which require you to work for an employer. For example, some alternate sources of income that lenders may consider as they review your application include:

• Child support payments
• Alimony payments
• Rental property income
• Retirement income
• Investment income
• Divided payments 

You Have Significant Cash Reserves

Alternatively, if you have significant cash reserves, you may find that it’s enough for a lender to approve the home mortgage. For example: It’s not uncommon for those who’ve inherited large sums of money from loved ones or saved up over the course of their career to have enough savings in the bank to meet monthly home loan obligations. In these cases, although technically unemployed, borrowers may be approved for a home mortgage if they have enough money on hand. 

Have Someone Co-Sign

A co-signer is another individual (a parent, spouse, or relative) who agrees to assume financial responsibility for your mortgage if, despite being the primary borrower, you find that you are unable to make required payments. Loved ones, friends, and anyone otherwise willing to vouch for you that has sufficient income and a good credit score can serve as a co-signer on the home loan.

Work With A Housing Counselor

The Department of Housing and Urban Development (HUD)-approved housing counselors are professionals who can help evaluate your financial situation and prospective ways for paying off your home loan. As government-trained and -certified parties, they can work with you to improve your chances of obtaining a home mortgage, and to create a plan to help you with your mortgage obligations at little to no cost. Housing counselors generally work alongside local agencies whose mission it is to help provide housing to individuals with lower incomes, or who may be purchasing a property for the first time.

Requirements For Getting A Mortgage Without Employment

If you don't have current employment with a steady history, you may need to score better in other areas that a lender may check, including credit score, debt-to-income ratio and down payment. Here's a deeper look at these three areas:

Credit Score Considerations

Your credit score is one of your most important assets, and it's even more important if you don't have any regular income coming in. Your credit score is one snapshot at how regular you have been at paying off your past debt obligations and how likely a lender thinks you might be at meeting any future debt obligations you might have.

A higher credit score is a positive factor in determining whether you might qualify for a mortgage without employment. A higher credit score can also help you get a lower interest rate if you do qualify for a mortgage. Having a credit score in the Good or Excellent range (from 670 – 850) will help you the most, though of course, the higher the better.

Debt-To-Income Ratio

Your debt-to-income ratio (DTI) is the ratio of your total monthly debt payments to your monthly income. Normally, lenders look for a specific DTI to qualify prospective borrowers for mortgages. However, if you have no monthly income, you will not have a debt-to-income ratio, so you will want to make sure to work with a lender that understands your situation and has a lending program that will work for someone without a job.

Down Payment Expectations

A typical down payment may range anywhere from 3% to 20% of the home's purchase price, though there are lending programs that may require more or less than that range. If you don't have a current job and no employment income, your lender may require a larger down payment as a way to lower the total amount being loaned on the property and the loan-to-value ratio (LTV) of the property. Check with your lender to see what the requirements might be, and consider working with multiple lenders to find one that has the right program for you.

The Bottom Line: It’s Possible To Get A Mortgage Or Refinance Without A Job

Again − it’s entirely possible to get a home mortgage without a job. In fact, as an unemployed individual, you will still have different home loan types and options available to you. As with the process of securing any home loan, obtaining a mortgage without a job requires having to meet certain eligibility requirements. Still, a lack of full-time employment is no show-stopping obstacle to homeownership − and you can start the mortgage process today with Rocket Mortgage.