Can You Get A Mortgage Without A Job? A Complete Guide

6 Min Read
Updated Feb. 23, 2024
Written By
Victoria Araj
Mother and daughter eating breakfast in refinanced home with seasonal income.

For people who are self-employed, seasonally employed or experiencing an employment gap, getting approved for a mortgage can be a bit complicated.

Mortgage lenders often ask for employment verification and a few years’ worth of W-2s when considering a mortgage loan application, because they consider borrowers with this type of documentation less risky than borrowers with other types of employment or no employment at all.

Many people believe they will be unable to get approved for a new mortgage or refinance loan if they are unemployed, but while getting approved under these circumstances can be challenging, it isn’t impossible. Let’s explore your mortgage and refinance options if you’re unemployed or don’t have a traditional full-time job with an employer other than yourself.

Can You Get A Home Loan Or Refinance Without A Job?

You can purchase a home or refinance if you’re unemployed or not employed in the typical fashion, but expect to face some obstacles you otherwise wouldn’t. 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 or not employed in the traditional sense doesn’t mean they won’t repay the mortgage.

Although getting a mortgage without a job may not be easy, you can take certain steps to improve your chances. Let’s explore your options below.

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How To Get A Mortgage Or Refinance With No Job

It’s by no means impossible to acquire or refinance a mortgage while unemployed or not in the prototypical job arrangement, but it will take a little more effort and creativity to meet the standard requirements.

Lenders often won’t accept unemployment benefits as proof of income for a home loan. However, exceptions are more common for seasonal workers or employees who are part of a union.

Here are some strategies designed to help you obtain or refinance a home loan without a job.

1. Consult A Housing Counselor

If you’re not sure where to start, a great first step is to speak with a housing expert about what you’ll need to get or refinance a mortgage loan. The Department of Housing and Urban Development (HUD) offers a list of free or low-cost counseling services available in different areas of the country.

HUD can help you put a budget together and clean up your credit if needed. This government agency can also help you potentially find the right government-backed loan. Government-backed loans include Federal Housing Administration (FHA) loans for low- or moderate-income borrowers and Department of Veterans Affairs (VA) loans for veterans, active-duty military, members of the Army Reserve and National Guard, and surviving spouses who all meet certain requirements for eligibility. A third kind of government-insured loan is the U.S. Department of Agriculture (USDA) loan, which is a zero down payment option for those of a certain income level and who are willing to live in a somewhat rural area.

A housing counselor connected with HUD will also be able to provide a comprehensive overview of the different types of mortgages available to home buyers. Plus, they may be able to help you work through different alternatives for refinancing your home.

2. Find A Co-Signer

Getting a mortgage co-signer can greatly improve your chances of being approved for a mortgage or refinancing without having a steady source of income. A co-signer is a person who pledges to make your mortgage payments if you don’t. Adding a co-signer’s income to the loan gives lenders more assurance that the loan amount you borrow will be repaid in full.

Of course, when you add another person’s income, you’re also adding their debts, so it’s best to apply with someone who has a low debt-to-income ratio (DTI). A co-signer can also benefit a borrower with a bad credit score, depending on the type of loan you’re getting.

It’s important that your co-signer understands the responsibility they’re taking on before they agree to co-sign. They’ll be legally responsible for your loan payment if you don’t make it.

3. Make A Larger Down Payment Toward Your Home Purchase

Some lenders understand that an absence of employment doesn’t always mean a borrower can’t make monthly mortgage payments.

If you have money saved up or investment assets and can make a substantial down payment to ease lender concerns over your lack of income, you may be able to get approved as long as your credit history and credit score are good enough.

The idea here is that a larger down payment leads to a lower interest rate as well as a smaller loan balance. A higher down payment decreases monthly mortgage payments and makes it easier to meet DTI requirements.

4. Get A No Income Verification Mortgage

A no income verification home loan is a type of nonqualifying mortgage. Typically, this kind of loan comes with a higher interest rate than a qualifying loan, but it can be easier to get approved if you’re self- or seasonally employed.

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Documentation You’ll Need To Apply For A Mortgage Or Refinance

Certain documentation is required when you apply for a mortgage or refinance, and it’s a good idea to get this paperwork together early and look for additional information that could help you qualify for a new purchase mortgage or a refinance. This documentation includes:

  • Tax returns
  • Bank statements
  • Recent pay stubs
  • Proof of insurance
  • Proof of unemployment
  • The financial details of your co-signer (if you have one)
  • Proof of any additional income, such as freelance work, Social Security benefits or investment income

Getting A Mortgage Or Refinancing Without A Job FAQs

Up next are a few frequently asked questions – and answers – that pertain to getting a home loan while unemployed.

Is it hard to get a mortgage without a job?

Although it’s typically easier to secure a mortgage while employed and having a steady income, you can get a home loan without a job under the right circumstances. The process may take longer, and you may have to overcome some hurdles to be approved for a mortgage, but you’re still able to buy a home in certain situations.

What are the different loan refinance options for unemployed borrowers?

If you have a government-backed loan, you have a few potential options for refinancing your mortgage. These options include an FHA Streamline Refinance and a VA Streamline Refinance, which can work for unemployed borrowers who meet particular requirements.

Are there other options besides refinancing if I’m unemployed?

If you already have a mortgage and are looking to refinance but are unemployed and don’t meet some requirements, some other options might be available to you. A loan modification or mortgage forbearance, for example, could be what you need during this time.

We recommend speaking with your mortgage lender to figure out the best solution for you and your financial profile.

The Bottom Line: It’s Possible In Some Cases To Get A Mortgage Without A Job

Applying for or refinancing a mortgage when you’re unemployed is tricky but not impossible. If you don’t qualify for refinancing, some alternatives may be available for consideration, depending on the type of mortgage you already have.


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