Buying a house without a traditional job—or any job at all —falls into two categories. For all-cash buyers, it’s no problem. After all, they won’t have to worry about securing a mortgage from a lender, and won’t have a monthly mortgage payment. But for everyone else, it’s a different story. 

When you require a lender (and the vast majority of people do), it’s much harder to get a home loan without having a job. In fact, during pre-approval, one of the very first things lenders ask for is your job, and the pay stubs and W2 statements to prove it.

Amid uncertain times where many people work in gig economies and are facing unprecedented economic hardship due to COVID-19, more people might be in the tricky position of trying to buy a house without having a steady job or any job at all. However, there’s hope: while it’s going to be more difficult to secure a loan compared with someone with a traditional job, it isn’t impossible. 

The four tips discussed below are all tactics you can employ to secure a mortgage without a job. 

Couple look at house
Tips for securing a mortgage without a job. / Photo by Monkey Business Images / Shutterstock.com

Spotlight Your Savings and Income Streams

If you don’t have a traditional job, you’ll need to have sizable savings to put a lender at ease or be able to prove another source of income, such as a life insurance payout, disability insurance payments, annuity payments, pensions, alimony or VA benefits.

During the pre-approval process, most mortgage lenders look for candidates who can provide a couple of months worth of pay stubs—if you don’t have a job, you’ll want to show that you have even more saved, ideally the equivalent of six months or more. You can also provide a list of your liquid assets for lenders, such as any stocks, bonds, or mutual funds. 

Consider Subprime

We get it: anything with “subprime” in the name is, well, subprime. However, this less-than-optimal mortgage, which carries along with it a higher interest rate and higher closing costs, might be a good option for people trying to secure a mortgage without a job. The higher interest rate and fees are designed to offset any losses a lender would suffer if you were unable to pay your mortgage.

But is there any benefit for you? Yes. Subprime mortgages are easier to get than traditional mortgages, allowing you to get into a home without a job. You might decide to look for a job later or improve your financial status—once you do, you can refinance for a more traditional mortgage.

Subprime mortgages are easier to get than traditional mortgages, allowing you to get into a home without a job.

Find a Cosigner

If you have a family member or friend willing to cosign on your mortgage, you might have better luck with the banks. A cosigner is someone who agrees to pay the mortgage if you default. You can’t ask just anyone, either: you need to find a cosigner with a low debt-to-income ratio, good credit, and, of course, they need to be employed.

Partnering with a suitable borrower makes you a more palatable candidate to lenders, but keep in mind that this option is a big ask that can put a strain on a familial relationship or friendship; your cosigner is legally obligated to pay the mortgage if you can’t, which could, in turn, put them in dire financial straits themselves. 

A cosigner is someone who agrees to pay the mortgage if you default. You can’t ask just anyone, either: you need to find a cosigner with a low debt-to-income ratio, good credit, and, of course, they need to be employed.

Skip the Bank, and Find a Seller Carryback

A seller carryback occurs when the owner of a property provides financing for the buyer. In this type of transaction, the seller and the buyer will sign a promissory note outlining how the buyer will pay back the money in a timely fashion at a specific interest rate. 

It’s practically identical to a traditional mortgage—but instead of making monthly payments to a bank, you would make monthly payments back to the seller. If you’re unable to make the payments, the seller can foreclose on the property, just as a lender could in a traditional mortgage. 

While this is an enticing option with benefits for both sellers and buyers, it’s not without drawbacks. Similar to a subprime mortgage, seller carrybacks also typically come with a higher interest rate. It can also be tough to find a seller carryback property, due in part to the 2008 Secure and Fair Enforcement for Mortgage Licensing Act, or SAFE Act.

It’s difficult for sellers to finance a buyer without first getting the proper licensing and registration, which they have to maintain annually.

This act prohibits individuals from engaging in the business of a residential mortgage loan originator without first obtaining and annually maintaining federal and state licensing and registration through the Nationwide Mortgage Licensing System and Registry.

Translation? It’s difficult for sellers to finance a buyer without first getting the proper licensing and registration, which they have to maintain annually. There is one exception, however: homeowners who carryback on their own house and sell to immediate family members.

At the very least, houses come with a monthly mortgage payment, not to mention power and utility bills plus all-but-necessary extras like internet service. Without a steady source of income, consider how owning a home would put stress and strain on your lifestyle before jumping in. Still, if you’re ready to own and don’t have a traditional job, the options above offer gateways to homeownership regardless of your employment status.