Before a mortgage lender approves an application, it wants to be confident that a borrower will be able to afford the monthly payments. Lenders generally want to see a record of at least two years’ worth of stable employment with regular income. For freelancers, contractors and people who have seasonal jobs or who don’t work, getting approved for a mortgage can be challenging, but it is possible.
You’ll Have to Provide Documentation
A mortgage lender will always request proof of income. Full-time workers provide W-2s, but people who don’t have a regular full-time job have to submit other forms of documentation. If you’re a freelancer, you’ll need to provide your 1099s. If you own a business, you might have to submit profit and loss statements or other documents. If you’re a seasonal worker, you might need to have your employer send a letter to a mortgage lender stating that you work seasonally and that your employment is expected to continue in the future.
You Don’t Necessarily Need a Job to Get a Home Loan
People typically repay a mortgage with money they earn from employment, but you might be able to qualify for a home loan if you don’t work. A lender might approve your application if you have another reliable source of income, such as alimony, child support or income from a property that you rent out. If you’re retired, your Social Security payments and money from investments might be enough to meet a lender’s requirements. You might also get approved for a mortgage if you have a large sum in savings or if someone with a steady income and good credit cosigns your application.
Other Factors Are Important to Lenders
Your income is only one part of the equation. A mortgage lender will look at your finances holistically. If you have a high credit score and a low debt-to-income ratio, a lender might approve your application, even if you don’t have a consistent monthly income. If you currently have a low credit score and/or a high debt-to-income ratio, improving them can boost your chances of getting approved for a mortgage. Pay all your bills on time every month and work on reducing your debt. If you have credit card balances with high interest rates, explore balance transfer offers and debt consolidation loans. You might be able to significantly lower your interest rates and pay down your balances faster.
Find a Loan That’s Right for You
Mortgage lenders offer a variety of loan programs. Some are designed for people who are in specific situations and might have trouble qualifying for a mortgage. For example, some lenders offer loans for borrowers who recently completed their education, have student debt and don’t yet have a steady work history. Do some research and look for a loan program that fits your circumstances.
