Can I get a home loan if I’m un­em­ployed?

Wangaratta Chronicle - North East Property Guide - - NEWS -

The short an­swer:

Un­for­tu­nately, it is very hard to se­cure a home loan if you are un­em­ployed. This is for a good (and ob­vi­ous) rea­son: if you don’t have a reg­u­lar in­come, then you can­not make the reg­u­lar pay­ments on your loan. It would seem non­sen­si­cal to pro­vide a loan to an in­di­vid­ual who can­not show that they can re­pay that loan.

In­come is the largest fac­tor that de­cides a home loan. For this rea­son, a lender may con­sider you for a loan if you can prove some other form of in­come other than a per­ma­nent job. In what is in­creas­ingly be­com­ing what is called a ‘gig econ­omy’ in the West, lenders need to be­come more flex­i­ble in the way they view an in­di­vid­ual’s abil­ity to re­pay a loan, but this can’t be at the risk of a bank pro­vid­ing loans to those who are not in a fi­nan­cial po­si­tion to pay off the loan.

What if you have just lost your job?

Your lender may con­sider you for a loan if you can pro­vide proof of suf­fi­cient sav­ings to con­trib­ute to the loan, as well as al­ter­na­tive sources of in­come that will ser­vice the loan in the fu­ture. These can be rental in­comes, gov­ern­ment pay­ments, pen­sions etc. Your best op­tion is to ex­plore this op­tion with your own bank with which you have a his­tory of sav­ings, but it is a rare and hard out­come to pur­sue. Lend­ing to in­di­vid­u­als who could not suf­fi­ciently ser­vice their loan is pri­mar­ily what led to the GFC of 2008/09.

If you have ir­reg­u­lar work, (i.e. you are a free­lancer, con­sul­tant etc.), you may be re­quired to pro­vide sev­eral months’ worth of proof-of-in­come to sat­isfy a lender’s re­quire­ments. Those with a full-time per­ma­nent job may only be re­quired to pro­vide their most re­cent payslips.

A lender may con­sider you for a loan if you can show a his­tory of con­sis­tent and strong em­ploy­ment, and are ac­tively pur­su­ing or can show that you have se­cured a job. Due to the rar­ity of such sit­u­a­tions and the in­abil­ity for most lenders to pro­vide loans to those without a suf­fi­cient source of in­come, View Home Loans asks users to pro­vide in­for­ma­tion on whether or not they are em­ployed, so they are not dis­ap­pointed once they do get in con­tact with one of our part­ner lenders.

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