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Home / Blog / Mortgage Qualification / Can You Get a Mortgage While on Unemployment?

Can You Get a Mortgage While on Unemployment?

September 15, 2022 By Admin

Mortgage while Unemployed?

If you are unemployed, you may feel you have to put a hold on your plans, such as the dream of refinancing or purchasing a home. With mortgage lenders typically wanting proof of employment and a steady income, you may wonder if you can count unemployment as income when refinancing or purchasing a home.

Luckily, you CAN count unemployment as income for a mortgage. Although you will be required to meet some of the lender’s requirements, unemployment will not prevent you from reaching your dream plan of refinancing or owning a home.

Let’s look at the many ways to get a mortgage while unemployed.

Related: 5 Mortgage Myths Debunked

How Can You Apply for a Mortgage Without Having an Income?

There are many ways that a prospective home buyer can get a mortgage while unemployed.

Buy a Home With a Co-Borrower or Co-Signer

One way to apply for a home loan after unemployment is by having a co-borrower. The lender will evaluate the borrowers’:

  • Credit score.
  • Income.
  • Debt-to-income ratio (DTI).
  • Credit reports.
  • Assets.

This type of arrangement can be helpful for anyone who is struggling to meet mortgage requirements. Additionally, a co-borrower may or may not live on the property.

Another option may be a co-signer. A co-signer is anyone willing, whether it be a parent, relative, or friend, who has adequate income and credit and is willing to be financially responsible for your mortgage if you miss or are unable to make a payment.

Qualify for a Mortgage Based on an Offer Letter

Most lenders will accept the employment offer letter for laid-off applicants who received a job offer allowing applicants to close the loan before starting the job.

Employment offer letters are considered if they meet the following criteria:

  • The job offer cannot have conditions or contingencies, such as being dependent on background or reference checks.
  • The job should start within 90 days of the mortgage closing date.
  • The letter must include a starting date and salary and be signed by both the employee and the employer.
  • Applicants must prove that the home will be their primary residence and is a single-family home, a townhome, a condo, or Planned Unit Development.
  • Applicants must show they have reserve funds to cover mortgage payments, property taxes, and homeowners insurance between closing and the job start date, on top of an additional three months of reserves.

You Have a Considerable Amount of Cash Reserves

You may have considerable cash reserves, enough for a lender to approve you for a mortgage. Occasionally, individuals will inherit large sums of money from loved ones or save a significant amount throughout their careers to have enough to meet their home loan obligations.

Ways to Refinance or Buy a Home While UnemployedYou Have Other Reliable Income

Mortgage lenders many consider other reliable sources of income when determining whether or not you qualify for a mortgage loan. There are many ways to bring in income, other than working for an employer. These may include:

  • Investment income.
  • Rental property income.
  • Retirement income.
  • Child support payments.
  • Alimony payments.

Refinancing Options for Those Who are Unemployed

There are several refinance options for unemployed homeowners. If you initially financed using a government-back home loan,  such as an FHA loan, VA loan, or USDA loan, you can access Streamline refinancing. While you still have to meet specific requirements, not all Streamline refinancing loans require proof of income. Some of the Streamline refinancing loans include:

FHA Streamline Refinance

FHA Streamline refinance loans assist homeowners with an existing FHA loan by lowering their interest rates and monthly payments.

VA Streamline Mortgage

The VA Streamline mortgage, backed by the federal government, is designed to help veterans and military members to refinance their existing VA loans to receive lower interest rates, smaller monthly payments, or different loan terms.

Conclusion

So, can you count employment as income for a mortgage?

Many options are available for unemployed individuals to purchase or refinance a home. While specific requirements must be met, like with any other home loan, unemployment will not prevent one’s dream of becoming a homeowner!

Marimark Mortgage  

Marimark Mortgage is based in Tampa, Florida, and serves the mortgage needs of homebuyers, homeowners, and investors in Florida, Virginia, and Pennsylvania.

We specialize in mortgages for first-time homebuyers, conventional home mortgages, refinance loans, reverse mortgages, and FHA, VA, and USDA mortgage options. In addition, we’ve worked extensively with cash-out refinancing and help clients lower their monthly mortgage payments.

To get started with a mortgage to buy your next home, please fill out our Quick Mortgage Application or contact us.

Updated on January 3, 2023

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Filed Under: Mortgage Qualification

Opinions, estimates, forecasts and other views contained in this page do not necessarily represent the views of Marimark Mortgage or its management and should not be construed as an offer to provide financing at the rates or terms mentioned. Due to market fluctuations, interest rates are subject to change at any time and without notice. Interest rates are also subject to credit and property approval. Although Marimark Mortgage attempts to provide reliable, useful information, it does not guarantee that the information is accurate, current or suitable for any particular purpose. Information from this page may be used with proper attribution.

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