How to Qualify for a Mortgage With No Job

Qualifying for a mortgage without a job might be possible.

Lack of current employment does not always preclude a person from qualifying for a mortgage loan. But an employed individual seeking mortgage financing is in a far more solid position to obtain financing. There are some added steps an unemployed person needs to take to qualify for and secure mortgage financing.

Things You'll Need

• Mortgage loan application

Instructions

1. Identify a person (probably a family member, typically a parent) who is willing to co-sign on a home mortgage loan for you. If you face the prospect of not qualifying for a loan on your own because you lack employment, focus on a co-signer with a very solid credit history, employment, and no other mortgage obligation.

2. Tell a mortgage lender that you are willing to use supplemental assets to additionally collateralize a mortgage loan. In other words, if you have other assets (certificates of deposit, other investment accounts, other real estate) advise the lender that you are willing to subject certain additional assets as collateral for a mortgage loan. The lender places liens not only on the real estate you purchase but on the additional asset or assets, giving the lender more protection in case of default.

3. Propose making a larger down payment to qualify for a mortgage without a job. Some lenders are persuaded to extend financing to a borrower without employment when a larger down payment is made.

Tips & Warnings

• In many instances, a retired person seeking a mortgage loan is in a different situation than an individual in his "working years" who lacks employment. If a retiree has savings, retirement accounts and other investments, these assets are persuasive when it comes to a loan qualification review. If a younger person also has unencumbered assets, the lack of employment issue becomes less important.

• Even if you can persuade a lender to approve a mortgage loan when you lack employment, take care when considering that financial commitment. Dealing with the obligation of a mortgage without income places additional strain on your resources. You run a greater risk of financial problems down the road when you accept a large financial obligation in the absence of regular income.

References

• "Mortgage Encyclopedia: An Authoritative Guide to Mortgage Programs, Practices, Prices and Pitfalls"; Jack M. Guttentag; 2004
• "Mortgages For Dummies"; Eric Tyson and Ray Brown; 2008

Resources

• Federal Trade Commission: Making Sure Your Mortgage Payments Count