For people who are self-employed or seasonally employed, or those who are currently experiencing an employment gap, applying for a mortgage can be a particularly apprehensive experience. Mortgage lenders like easy employment verification and a few years’ worth of W-2s when they’re considering a mortgage loan, because they consider them less risky than other types of employment.
But as a borrower, you don’t want to be penalized for not having a job when you’re confident in your ability to repay a mortgage loan, or if you want to refinance your mortgage to lower your monthly loan payments. Lower loan payments can be especially helpful if you’ve recently lost your job and are worried about your monthly budget.
Unfortunately, many lenders hesitate to approve new mortgages or refinance loans for unemployed borrowers. While it can be challenging, it isn’t impossible.
Yes, You Can Still Get A Mortgage Or Refinance While Unemployed
You can purchase a home or refinance if you’re unemployed navigate to the website, though there are additional challenges. There are a few things you can do to improve your chances as well.
Many lenders want to see proof of income to know that you’re able to repay the loan. Of course, just because a mortgage applicant is unemployed does not mean they won’t repay the mortgage.
How To Refinance Or Get A Mortgage With No Job
Refinancing your mortgage while you’re unemployed isn’t impossible, but it will take a little more effort and creativity to accomplish. Unfortunately, lenders often won’t accept unemployment income as proof of income for your loan. Here are some strategies you can use to help you refinance your loan without a job.
Consult A Housing Counselor
If you’re not sure where to start, a great first step is to speak with a professional about what is needed to refinance your loan. The U.S. Department of Housing and Urban Development (HUD) offers a list of free or low-cost counseling services available where you live. They’ll be able to help you put a budget together, clean up your credit if you need to or help you find the right government-backed loans – FHA for low-income borrowers or those with shaky credit, VA loans for our nation’s veterans and their families or USDA loans for rural homes. They’ll also be able to explain the many different types of mortgages available to home buyers. Plus, they may be able to help you work through different alternatives to find a way to refinance your home.
Find A Co-Signer
Getting a mortgage co-signer can greatly improve your chances of being approved for a mortgage or refinancing without having an income. A co-signer is a person who pledges to the lender that they will make your mortgage payments if you don’t. This gives lenders more assurance that the loan they make will be repaid.
It’s important that your co-signer understands the responsibility they’re undertaking before they agree to co-sign. They’ll be legally responsible for your loan payment if you don’t repay it.
While lenders love to see income, they understand that lack of employment doesn’t always mean that a borrower can’t make their monthly mortgage payments. If you have saved or investment assets, and can make a larger down payment to assuage lender concerns over your lack of income, you can probably get approved with a good credit score and history.
No Income Verification Mortgage
A no income verification home loan is a type of nonqualifying mortgage. Typically, these loans charge higher interest rates than qualifying loans, but can be easier to get approved if you’re self- or seasonally employed. Rocket Mortgage® does not offer this type of mortgage.