Getting a mortgage can be hard enough when you have a full-time job. If you’re currently unemployed, things can be even more difficult, but not necessarily impossible.
You Will Need to Show a Steady Source of Income
If you want to take out a mortgage, you will have to show a lender that you’ll be able to keep up with the monthly payments. Usually, borrowers provide pay stubs showing their earnings, but that’s not the only possible source of income you can use to buy a home.
You won’t be able to buy a house with unemployment benefits alone since that’s a short-term source of income. If, however, you receive regular income from investments, Social Security, a lawsuit settlement, alimony, or another source, you might qualify for a mortgage.
You Might Be Able to Buy a House With Another Person’s Income
Someone else’s income might be enough to help you secure a mortgage. If you want to buy a house to share with a spouse or a partner and that person has a stable source of income that can cover a mortgage and other bills, the two of you might be able to qualify for a loan, even if you’re currently out of work.
Another option is to get an individual who won’t be living in the house to cosign a loan. For example, you might have a parent, sibling or friend who is willing to assume financial responsibility for a mortgage so you can buy a house now.
That’s a big ask, so don’t be surprised if your loved one says no. If you don’t find a job and can’t cover the mortgage payments yourself, the cosigner will continue to be responsible for your loan. Your relatives and friends have their own bills to pay and their own families to care for, and they might not be willing to assume that financial risk.
You Might Get Approved If You Will Be Employed in the Near Future
If you have received a job offer, but you haven’t begun working yet, you might be able to qualify for a mortgage based on an offer letter. It will need to show how much you will earn and whether you will be paid hourly or will receive a salary.
If you have a seasonal job or you work as a contractor and you’re currently unemployed, but you expect work to resume soon, you might be able to get a home loan. A lender will look at your average income, and you might have to meet stringent guidelines.
A Mortgage Lender Will Consider Your Whole Financial Picture
When evaluating applications, lenders look at a lot more than just income. A borrower’s debt-to-income ratio and credit score are critically important. If you have little or no debt and a high credit score, as well as income from a source other than a job or plans to return to work soon, a lender might approve your application for a home loan, even if you’re currently unemployed.
