Borrowers can get a mortgage without having a job

For people currently experiencing employment gaps, or those seasonally employed or self-employed, applying for a mortgage is often nerve-racking. Most mortgage lenders prefer people with easy employment verification when considering a mortgage loan application or refinance options.

However, as a borrower, you wouldn’t want to be punished for not being employed when you can confidently repay or refinance your mortgage to reduce your monthly loan payments.

While smaller loan payments are helpful if you recently lost your job, most lenders don’t like refinancing loans or approving new mortgages for unemployed borrowers.

If you’ve been asking, “can you get a mortgage without a job? This article is for you. We will explore how you can get a mortgage while unemployed, the disadvantages of getting a loan without a job, and frequently asked questions. Read to the end!

How to Get a Mortgage While Unemployed

There are lots of mortgages for intending homeowners. While their requirements may differ depending on the loan you want, income is one decisive universal criterion for approval.

Therefore, suppose you’ve been asking, ” can I get a mortgage without a job?” The answer is yes. Banks can consider a nontraditional means of funding your loan.

Some of these nontraditional methods include:

  • Getting Help From a Housing Counselor

The home buying process is difficult to navigate even under the best circumstances; it becomes more difficult when you’re at a disadvantage. Working with a housing counselor will help you plan how to proceed with obtaining a mortgage.

Suppose you’re searching for free or low-cost housing counselors in your area; visit the US Department of Housing and Urban Development (HUD) website.

Connecting with a housing counselor will enable you to learn more about actions that increase your odds of getting mortgage approval. The counselor might help you discover the type of loan you’re likely to be eligible for or assist you in creating a plan for improving your credit score.

Some Fannie Mae and Freddie Mac government-backed loans like the VA loan, FHA loan, or USDA loans have fewer eligibility requirements compared to those offered by private mortgage lenders and banks, so you might want to consider them.

  • Having a Co-signer

Borrowers with a limited credit history will need a co-signer. While your close friends or parents can co-sign the mortgage, becoming a co-signer is risky, and the person takes on your mortgage liability. If the borrower defaults, the co-signer will pay in their stead.

  • Improving Your Borrower Profile

Before considering a mortgage application, you might want to increase your overall borrower profile. Mortgage shopping entails making yourself appealing to lenders.

Naturally, intending homeowners need a few things in place: sufficient funds for monthly loan repayments, a low debt-to-income ratio, and a high credit score. With these measures in place, it’s possible to convince mortgage lenders. Simply put, the answer to the question, “can you buy a house with no job?” is yes!

  • Relying on Investments

Suppose you have a nontraditional income source, for instance, substantial dividend payments from an investment portfolio, then you can use money from the dividend while applying for a mortgage.

However, you have to meet some requirements. Some lenders will only qualify you for a mortgage if you’ve received this income for at least two years.

Bundles of cash ready to be used for a home purchase

  • Employing Cash Reserves

If you have a huge cash reserve, your mortgage lender might approve your loan even when you don’t have a job. Whether you’re not planning to return to regular employment, searching for another job, or in between work, you’ll find this option beneficial.

However, your mortgage lender will need proof that you can regularly make mortgage payments till the end.

  • Proving Alternative Income Sources

The truth is, some people have investment income that provides them with lots of money that can cover their basic living expenses and monthly payments even if they’re unemployed. Suppose that’s the case; you can easily convince a mortgage lender to offer you a loan.

Simply put, you can get a mortgage with no job but a large deposit from alternative income sources like an inheritance, a gift, life insurance policy, alimony, social security, or lawsuit settlement.

However, ensure that your debt-to-income ratio and credit score are high. Also, you might be required to prove that you’ll keep receiving the benefits for a minimum of three years to reassure the lender that you won’t default on your monthly mortgage payments.

  • Making a Huge Down Payment

Although lenders prefer mortgage applications from verifiable employees, some of them understand that being unemployed doesn’t mean an intending homeowner can’t make monthly payments.

Suppose you have investment assets or sufficient savings and can make a substantial downpayment to compensate for your lack of income, you can get a loan. It’d also help if you have a good credit score.

Simply put, a bigger down payment will lead to a low-interest rate and a smaller balance, meaning a manageable monthly payment.

  • Making Your Partner the Lead Borrower

As an unemployed person, you can rely on another’s income while applying for a mortgage. For instance, if you’re purchasing a home with your employed partner with a low debt-to-income ratio and solid credit score, it’d be best to allow your partner to handle the mortgage application.

Suppose you’re single but have wealthy family members willing to help you; you can ask for a “gift” to help with a bigger down payment while you work to pay back between jobs.

  • Securing a Job-Offer Letter

Are you considering changing jobs due to starting your own company or relocation? Some lenders might accept job-offer letters during mortgage applications as future income proof. Nonetheless, check with the bank or lender you intend to use for restrictions regarding this option.

Hopefully, the following methods explained have helped to answer the question, “can you get a mortgage without a job?”. Unfortunately, there are disadvantages to getting a mortgage loan while unemployed, as we will explain consequently.

Demerits of Getting a Mortgage While With an Unemployment Income

Mortgage lenders that approve loans without employment take on increased risk. Therefore, it’s unsurprising that they pass on some of these risks to the borrower in the following ways:

  • Larger down payments
  • Shorter-term loan lengths
  • Higher interest rates
  • Stricter approval requirements
  • Lowered borrowing ability


These risks are specifically for unsecured and personal loans you can obtain while unemployed. Don’t forget that you’re taking on a risk when you get a mortgage with no job. The truth is, defaulting on a mortgage has a long-term adverse effect on your credit history.

A mortgage broker shaking the hand of a borrower

Getting a Mortgage While Unemployed

If you’ve been wondering, “can you get a mortgage without a job?” The process is quite simple like the traditional loan application process. You need to check your credit score because the higher your credit score, the better many lenders will determine your risk after review. Simply put, a higher credit score might lead to lower interest rates.

The next step is to calculate your housing budget once you’re satisfied with your credit score. Your housing budget will depend on the amount you can afford for the home and your down payment. Ensure you don’t overspend; you don’t want to be house-poor and vulnerable during emergencies because you spent all your finance on the home purchase.

After deciding on a monthly budget, you need to ready your paperwork, including proof of funds, evidence of additional income source, social security number, tax returns, and bank statements.

Depending on your mortgage qualification plan, you might likely need other paperwork. For example, suppose you’re planning to use a co-signer; you might want to provide the person’s info alongside your paperwork.

Begin to look for a mortgage lender after gathering everything you need. Don’t forget that interest rates vary from one lender to another, so you might want to check out a few lenders.

After reaching an agreement with your lender, you’ll get a pre-approval letter which will come in handy during your home search. When you find the right property and submit your documentation, you can proceed to close in on the loan.

Types of Property Loans for the Unemployed

While there are lots of mortgage loans for intending homeowners with verifiable jobs, individuals with no job can also access specialized home loan types for the unemployed, such as the:

  1. Asset Depletion Mortgage

This mortgage helps you qualify for a property loan by leveraging considerable assets instead of depending on your monthly salary.

The asset depletion mortgage leverages your liquid assets as an additional or lone income source, showing that you have sufficient funding for daily living expenses and mortgage repayment, and allowing for your mortgage qualification.

Note that you only need to present the liquid assets upfront to show that you can make monthly mortgage payments. Therefore, you can hold off cashing them in after signing the paperwork.

  1. No-income Verification Mortgage

Some non-qualifying mortgages don’t require presenting income verification. These no-income verification mortgages might be an excellent option for people with seasonal income or self-employed borrowers.

Sadly, no-income verification mortgages often come with higher interest rates and more terms and conditions.

FAQs on Mortgages for Unemployed Borrowers

How Much Do I Need to Purchase a Home?

The amount you need to save to afford a home purchase varies depending on the purchase price and loan type. Most times, you might need to have at least three percent of the home purchase price with closing costs ranging from two to seven percent.

What Credit Score Is Suitable for Buying a House?

Credit scores are impacted by factors such as your credit history, your total credit utilization, and your number of accounts. Although credit scores often range from 300 to 850, a good credit score should be between the 670 to 739 range.


Some people prefer waiting until they’re unemployed before applying for mortgage disqualification or refinance. As long as you have a high credit score, a reliable income source, and a low debt-to-income ratio, it wouldn’t be hard to get a mortgage lender willing to work with you even with a self employed income.

If you’re wondering, “can you buy a house without a job?” It’s possible. You can still be eligible for some home loan options as an unemployed person. However, you’ll need to meet specific eligibility requirements like other loan application processes.

Are you looking to buy a home but wondering if you can get a loan due to your unemployed status. Reach out to us at Ardor Homes Massachusetts today to help connect you to mortgage lenders that will explain your options so you’ll choose the best mortgage type that suits your needs.

Ardor Homes Massachusetts is the leading real estate company with affordable homes for sale. Go through our website to find a home that suits your budget and preferences and we will make your dream come true.

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