Relocating and Buying a House Without a Job
Many home buyers who are relocating seem to struggle with qualifying to purchase a home if they have yet to find a job in the new city or state.
There are creative solutions to help if you are relocating and buying a house without a job. We will talk about the various scenarios and will provide you with some options to help you purchase your new home.
Options when Relocating and Buying a House Without a Job
These are common scenarios that you may encounter and there are options to purchase a home regardless of which scenario below applies to you.
1.Selling Your Current Home Before Relocating
Most people will need to sell their current home before relocating either because they need to proceeds from the sale to use as a down payment on a new home, or because they will not qualify with two mortgages at once.
When applying for a mortgage in a new location, the lender will need to verify your employment and income. This is the case for most mortgages including conventional and FHA. If you cannot verify that you have secured employment, then you will not qualify for the new mortgage.
Selling your home before you move means you have the equity from that home and you will not have that mortgage counting against you during the qualification process. This also means that you will be without a home in between selling and buying unless you do both on the same day.
If you do not have a new job yet, then you have two options here which are addressed below.
- Renting in the new location until you find a job
- Apply for a no doc loan
2.Renting In the New Location Before Buying a New House
A great way to deal with the problem of relocating and buying a house without a job is to look for a short term rental. This will give you time to find a new job so you can apply for a mortgage.
Renting for a while will also provide you with the opportunity to take your time and look for neighborhoods or homes that you prefer once you learn more about the area.
Keep in mind that many lenders may require you to have been in that new job for at least 6 months. Some lenders will waive that requirement though. Read [applying for a mortgage with a new job].
3.Apply for a No Doc Loan
You may qualify for a no doc loan or stated income loan if you find yourself struggling to qualify for a mortgage without a job. These loans are not easy to find because most lenders do not offer them.
Expect both the interest rate and down payment to be higher than a conventional loan. However, this type of mortgage can get you to the closing table and you can always refinance later after you have been in your new job for a few months.
Read [no documentation loans]
4.Keeping Your Current Home Until After You Buy Your New Home
Another strategy is to purchase the new home in the new city before you quit your current job. Buy the new home as a second home or vacation home. This would require you to have the down payment and enough income to qualify for the new mortgage while maintaining the expenses and payment on your current home.
You can also ask your current employer to switch you to remote working. Then, you can sell your existing home and purchase the new home in the new location while maintaining your old job. Your current employer would be asked to verify your employment as part of the conditions of the loan.
5.Apply with a Cosigner
If you do not have a job and want to purchase a new home, you can apply for the mortgage with a cosigner. This individual would need to have enough income to cover your new mortgage plus his or her own expenses.
Once you have been in your new job at the new location for a while, you can refinance the mortgage to remove the cosigner from your loan.
Should you find a house or job before moving?
Given the choice, you should always find the new job before moving because it will make qualifying for a mortgage much easier. You also do not want to find yourself in a situation where you have a new home and monthly mortgage payments but still no job to help with those payments.
Is it impossible to buy a house without a job?
It is not impossible to buy a house without a job. However, when you do not have a job, your options are limited and both the down payment and interest rates will be higher.
Is it hard to get a mortgage when relocating?
It is not hard at all to get a mortgage when relocating if you can document employment and income. The most difficult part is managing moving and closing on your new home simultaneously. Any good loan officer can help you to make this a reality.
Can I get a mortgage without a job if I have savings?
Simply having savings is not enough to get a mortgage without a job unless that savings is substantial. You may even qualify for an asset based mortgage where you can qualify using liquid assets without having a job.
What Others in the Industry Are Saying
Avi Lebowitz, CFO of Marketplace Fairness says.. “There are a few risks and benefits to consider when relocating without a job. The biggest risk is obviously the fact that you may not find a job in the new city. This could lead to long term period of unemployment, which can be very costly both financially and emotionally. However, relocating without a job can be a great way to jumpstart your career.”
Nick Mueller, Director of Operations at Hawaiian Islands adds “Subletting a monthly rental unit or searching for roommates is a great idea because it is low commitment. You can save money and search for employment without signing an expensive lease.
Dave Bochichio, Founder of Clean Cut Finance says, “To relocate without a job, it helps to have 6-12 months of living expenses saved up. Before moving, however, it makes sense to figure out how you will make money. Is there a job you can take temporarily before you find a career job in the area?” This may be a good way to get approved for a mortgage initially.
Cameron Toole, CFO of ibr.org says “Relocate without a job and hope something opens up. This is the riskiest option, but can also be the most rewarding. Finding a job in your new city before you move is the safest option, but it can also be the most limiting.”