Get a Mortgage While You’re in Between Jobs
It can be very tricky to buy a house, especially if you don’t have a job. When applying for a loan, the mortgage lender is interested to know if you have a steady income for starters. Thus, it is only natural to raise a few eyebrows if you start the loan process way before you start your new job. But, it doesn’t mean that you can no longer qualify for a mortgage when you are in between jobs.
Steady Employment = Steady Income
Showing evidence that you have a well paying job is not adequate to make you qualified for the loan. You also have to prove that you can stay in the job in the future. Many lenders know that the perfect way to determine this is through checking your work history. They also want to check that you have been employed in a job with increasing or steady income for a minimum of 2 years. Switching jobs right before you apply for a mortgage might make the process complicated and raise doubts regarding your financial stability. This is why it is advised that you stay in your current job during the process of application.
Determine Your Chances of Success
The possibilities of being qualified for a home loan will depend primarily on why you are in between jobs, and what kind of job you lined up. If you were laid off not long ago or you are currently searching for work in a different industry, the mortgage provider might doubt your ability to retain steady employment.
On the other hand, if you are just advancing your career and stepping up to a higher paying position, they will have more confidence in your ability in making monthly payments. A job in a similar field which offers the same pay will also help you out. Through moving either laterally or vertically in a similar industry, you will show that you are not only flitting from one job to another, and living from one unstable paycheck to another.
Look for a Co-Investor
What if you choose to change your career path completely? What if your new job is a total step down from your previous job? Instead of hanging your head in defeat, you have to think creatively. A great way of convincing your mortgage lender that they will make a safe bet is to bring in someone else to help in covering the costs. You can ask a partner, spouse, friend, or sibling with better work history to serve as your co-borrower to increase your chances to be qualified for a mortgage. Usually, it is a must that you live in the house together so ensure you choose someone who lives with you.
When you have extra sources of income, see to it that you list all of these on your application. Everything from trust funds, to investments, and Social Security benefits can leave lenders impressed and reduce the impact of your unstable work history. But, the similar rule will apply to the non-traditional income as well as to job-based income. This should be steady for a minimum of 2 years. You must also be able to prove that this will continue to pay out for several years more.