It is possible to purchase a house without a job; however, this will usually rely on you having enough of a cash reserve to be able to afford a cash offer. If you are looking to get a mortgage, you will usually have limited options if you do not have a job. Find here how you may be able to purchase a property without having a current job.
Can You Buy a House with Cash If You Have No Job?
If you have no job, buying a house with a cash offer might be your best option if you can afford it. A cash offer is an offer which is made by homebuyers who are not relying on a mortgage or any other type of financing in order to purchase the property. If you have enough money to make a cash offer, it does not matter whether or not you have a job as there are no specific criteria you need to meet to be approved.
Can You Get a Mortgage If You Have No Job?
If you have no job, you will most likely be unable to get a mortgage because the majority of lenders will require you to have a valid form of income. However, if you are able to demonstrate enough income from an alternative source, some lenders might be willing to consider your application – for example, this could be from benefits, dividends, or pension benefits.
Lenders typically prefer borrowers who can demonstrate a secure form of income as it indicates that they can reliably keep up with monthly mortgage repayments. Thus, if you apply for a mortgage without a job, you will have a limited pool of lenders available to you.
What Are the Options for Buying a House If You Don’t Have a Job?
If you don’t have a job and are worried about buying a house, although it might be more challenging, you still have options available to you. There are a few key steps that you could explore to get a mortgage:
1. Use Your Savings
If you have substantial savings, you could put together a larger-than-normal down payment. The ideal scenario would be to demonstrate to lenders that you not only can afford a large down payment (which is less risk for them), but that you also have enough savings to put towards future mortgage payments. Some lenders may accept this and feel comfortable approving the mortgage.
2. Get a Co-Signer or Apply for a Joint Mortgage
Finding someone to co-sign your mortgage with you could improve your chances of being approved for a mortgage. A co-signer is someone who is agreeing to meet your mortgage payments if for whatever reason you are unable to do so. When looking for a co-signer, look for someone you trust who has a good credit score and a stable employment history; the better their borrowing the profile, the less risk it will be for the mortgage lender and they will be more likely to approve your application. However, before opting for a co-signer, you will need to ensure that your co-signer is aware of the risk they are taking by co-signing the mortgage. If you and your co-signer miss a payment, they are at risk of damaging their credit score.
The same goes for if you are applying for a joint mortgage. Choose to apply for a mortgage with someone who meets the lender’s affordability criteria and who is able to show a stable employment history. If your lender can see that as joint applicants you are able to afford the loan, they will be more likely to approve the mortgage.
3. Demonstrate Solid Employment
You may be in a line of work that is not accepted as a demonstrable stable employment history. For example, maybe you are self-employed, a freelancer or work in the gig economy. If this is the case, you will need to come prepared and use any documentation to prove to lenders that you have received income over the last two years, regardless of the sources.
4. Good Credit Score
If you have a good credit score, you will be in a better position to apply for a mortgage, even if you do not have a job. Use this time to build your credit score by paying off debt and fixing any errors on your credit report. If you have a history of paying off debts in a timely manner, you will seem more credible to mortgage lenders.
How Long Do You Need to Have Been Employed to Apply for a Mortgage?
If you have only just started a new job, it may not be the best time to apply for a mortgage as the majority of lenders will look at longevity of employment history. Experts recommend two years of employment as a general rules of thumb; however, a strong employment history that demonstrates steady income and ability to meet payments on time could still be compelling enough to be approved for a mortgage, depending on the lender.