Can You Get a Mortgage or Refinance a Loan Without a Job?

Financing Your First Home, Home Affordability, Mortgages

The employment scene looks much different today than it did a few years ago. Between ongoing pandemic-related disruptions, the Great Resignation and the rise of gig work, more people than ever are wondering if they can get a mortgage or refinance their home loan without a full-time job.

Yes, getting a mortgage or refinancing your home loan without a job is possible. But it has its own set of challenges. In this article, we’ll explore ways to help you qualify for a mortgage without a job.

How To Get a Mortgage or Refinance if You’re Unemployed

The process of getting a mortgage without a job looks just like getting any other mortgage. The biggest difference is documenting your income without a job. Proving to the lender that you can repay the loan is critical. After all, ensuring the loan will be repaid is their primary concern. Without a job, the lender will carefully examine your application. So you’ll need to be thorough when establishing proof you can repay the loan.

Here are a few things that will help you get a mortgage with no job.

Prepare your case

You need to earn the lender’s trust. Prepare your case and show the lender why they should trust you. Being able to prove you’re financially stable is especially important.

Maybe you’re transitioning between roles and will start your new job soon. Or perhaps your profession is seasonal. Whatever your circumstances, you’re more likely to be approved if you can show the lender you have consistent monthly income for 8 months of the year and can effectively budget for your monthly mortgage payments for the other 4.

The key is to be prepared to show a mortgage lender you have a plan and will be able to make your payments.

Talk to a housing counselor

The U.S. Department of Housing and Urban Development (HUD) offers free or low-cost housing counseling services to anyone who needs it. HUD-approved counselors can help you understand your options and the process of getting a mortgage, whether you have a job or not. They can also help you work out a budget and create a plan to improve your financial situation.

Find a co-signer

A co-signer is someone who agrees to take on the financial responsibility of repaying a loan if you can’t fulfill the obligation. This means if you default on the loan, the co-signer is on the hook for the balance. Because of this, co-signers are typically family members or friends who know you and trust you’ll make good on your obligations.

Use investment income

Some people use money from investments to help them get a mortgage. You can cash out investments to increase your down payment amount or share the details of your investments with the lender to demonstrate your ability to pay the mortgage. This can be helpful, but due to the unpredictability of most investments, this income isn’t treated the same in the eyes of a lender and can therefore lead to higher interest rates.

Some investments, like certain annuities, are more stable than others. If you have income from a stable investment, an underwriter may be more willing to consider the income to qualify you for a mortgage.

Make a larger down payment

Making a larger down payment on a house can help you get a mortgage when you don’t have a job. The money you put down can show the lender you’re serious about buying the house and investing in it. It also means you’ll have to borrow less money, which can make monthly payments smaller.

No income verification mortgage

A no income verification or bank statement mortgage is often the go-to mortgage for self-employed individuals and may be worth exploring depending on your situation. As the name suggests, no income verification is required to be approved for this type of mortgage.

No income verification mortgages are more expensive than traditional loans because they’re considered higher risk. This means you’ll likely have to pay a higher interest rate, and you may also have to pay additional private mortgage insurance (PMI).

Even with these drawbacks, a no income verification mortgage can help you get the financing you need without having to provide extensive documentation.

Lender Application Requirements and Documents

Every lender is different, but when you apply for a mortgage without a job, you can expect to be asked about your finances. A lender will decide if you’re a good candidate for a mortgage based on the information contained in your application and financial documents.

When processing mortgage applications, lenders typically look for a healthy credit score, the ability to repay and a manageable debt-to-income (DTI) ratio. In addition, you’ll likely need to provide the following information and documents:

  • Name
  • Address
  • Date of birth
  • Social Security number
  • Overview of assets and liabilities
  • Tax returns for the past 2 years
  • Bank statements for the past several months
  • Proof of any other income, like child support or alimony
  • W-2 forms from your employer for the past 2 years (if applicable)
  • A list of debts, including credit card balances and other outstanding loans

Conventional Loan Refinancing Options for Unemployed Borrowers

If you’re refinancing a conventional loan while unemployed, you’ve got a tough road ahead. However, that isn’t to say you can’t make it happen. There are several ways to refinance a conventional loan, even without a job.

First, you’re going to need to get the lender to look past the fact you aren’t employed. Reassure them you can repay the loan. This may require introducing a co-signer or an alternative income source like alimony or annuities.

Then, even if the lender is willing to look past the lack of income, you’ll likely need to have a qualifying credit score, usually 620 and above for conventional loans, and enough equity in your home to qualify. 

From this point, you’ll have to submit your application. Make sure to emphasize anything that supports your ability to repay the loan, such as assets, annuities, investments and other sources of money.

Even with all of this, it can still be difficult to get approved without an applicant with regular income. That’s where a co-borrower comes in. It’s not impossible to refinance a conventional loan without a job, but success will be much more likely with a co-borrower.

Government-Backed Loan Refinancing for Unemployed Borrowers 

If you’re unemployed and living in a home financed with a government-backed loan, you may have an easier path to refinance. The government offers several programs that can help make your mortgage payments more affordable.

We’ll take a look at two common refinancing options below. Regardless of your loan type, many programs are available through HUD housing counselors. You may want to call your current lender to discuss your eligibility for government-backed programs to lower your mortgage payment.

Federal Housing Administration (FHA) Streamline

The FHA Streamline refinance program is a government-sponsored refinance program for FHA loan holders. If you have an FHA loan, you may be able to lower your mortgage payments with a streamline refinance.

To qualify for the FHA Streamline program, you’ll need to show you’ve made on-time payments for the past 12 months. You’ll also need to prove that refinancing will provide a “net financial gain,” meaning the benefits outweigh the expense associated with the refinance.[1]

Department of Veterans Affairs (VA) Streamline

The VA Streamline program is a government-sponsored refinance program for holders of VA loans. If you have a VA loan, you may be able to lower your interest rate and payments with a streamline refinance, even without a job.

To refinance your home with a VA IRRRL, you’ll need to meet three key requirements:

  • You have an existing VA loan.
  • You certify you’re only using the IRRRL to refinance your existing VA loan.
  • You certify you’re using the VA IRRRL for the home you live in or used to live in.

The VA Streamline doesn’t require a credit check, income verification or home appraisal. So it’s a good loan type to have if you find yourself unemployed and you need to refinance.

What To Think About Before Taking Out a Loan While Unemployed

If you’re considering taking out a loan while unemployed, you can probably make it happen, but here are some things to keep in mind:

Your interest rate will be higher

Without a job, you’ll likely have a higher interest rate on any loan you’re approved for. This is because lenders see unemployed borrowers as high-risk. A higher interest rate will increase the amount of money you’ll pay over the life of the loan.

When you apply for a loan without a job, lenders will want to know how you plan to repay the debt. Have a solid explanation prepared before beginning the application process. Providing documentation of other sources of income, such as investments or annuities, can be helpful. But even with that, you shouldn’t be too surprised if your rate is high.

Wait for the right time

Though it may be possible to qualify for a mortgage or refinance your loan without a job, consider if it’s truly the right time to do so.

Is recommitting yourself to your debt the best option for your financial situation? Maybe it is. Or maybe it’s better to consider alternatives like selling your home and downsizing to something more affordable.

Consider the implications of a co-signer

If having a co-signer is the only way to qualify for a loan without a job, proceed with caution. If you can’t make your payments and default on the loan, not only will your credit score take a hit, but your co-signer’s finances will, too.

You Can Become a Homeowner Without a Job

There are a few ways to qualify for a mortgage or refinance your home loan without being employed full-time. You’ll likely need to prove you have another source of income, and you may pay a higher interest rate. But if that’s the cost of keeping a roof over your family’s head, it may just be the perfect solution for you.

  1. U.S. Department of Housing and Urban Development. “Let FHA Loans Help You.” Retrieved July 2022 from

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