A reader named Fred wrote in with this important question:
Can I get a mortgage if I do not have a job? There are so many factors to consider. Would you be kind enough as to give me some pointers as what to look for or avoid? Please help me. Thank you.
Fred, my short answer is not likely. The long answer is maybe, because getting a loan depends on many factors. Lenders look at your whole financial picture when deciding if you are a good risk, i.e., someone who is likely to pay them back.
Maybe you are a trust fund baby and has never worked a day but still has plenty of moolah to make good on a loan. If you are a regular working Joe, however, your chances are not as good because job stability is a factor lenders consider, so not having a job hurts you. Do you have any evidence of how soon you will get a job and how stable that job will be? How do you plan to pay your mortgage with no income?
Ultimately, the best way to answer your question is to prepare a loan application and submit it.
Start by figuring out what you can afford to buy using this calculator from the American Bankers Association, which recently shared tips to get a loan in this tight market.
Next, gather and organize your information, including pay stubs, tax returns, financial statements, and paperwork showing your monthly payments on your car, credit card, and student loans. Lenders will want recent statements going back three to 24 months.
To strength your application, include any additional information that proves additional income or wealth. Depending on your credit score and other factors, lenders will want to see that you have many months of PITI (principal, interest, taxes and insurance) on hand. Here’s a PITI calculator.
ABA also recommends you use a trusted institution, pay down other loans, read the fine print, and take into account the myriad costs of home ownership like insurance, maintenance, closing costs and taxes.
Good luck!
July 3rd, 2009 at 6:22 pm
I did not understand this:
“If you are a regular working Joe, however, your chances are not as good because job stability is a factor lenders consider, so not having a job hurts you.”
????