The Economic turmoil around the globe due to Covid19 has not only left many out of work, but has also forced many to put their house buying process on hold. Since the Florida mortgage lenders are largely reluctant to lend money to people who do not have steady income sources, applying for a mortgage seems to be a distant dream for many.
Obviously as a borrower you may feel it is unfair that you are not considered eligible to apply for mortgage loans in Florida just because you are unemployed. But the truth is that the banks are not entirely at fault. They are mandated by law to lend money only after it is sure of getting their interest back on time. It is therefore not surprising if banks reject your application for a mortgage even when you have sufficient funds in your account and are confident in your ability to repay.
So while it can be challenging to apply for a loan without a job, it isn’t totally impossible.
Yes you read it right! You can still get a mortgage if you are unemployed. As a borrower you just have to convince the lenders that you have a steady income source and should be considered eligible. The best way to do this is by providing them with pay slips or bank statements that show a consistent flow of income. So before you apply for a mortgage keeping all your documents ready can go a long way in helping you secure your loan.
Let us look at a few strategies that can help you refinance your loan from a trusted Florida mortgage company without a job.
Consult a Housing Counsellor
If you are not sure how to go about getting yourself Florida home loans without a job, you can always consult a housing counselor.
- They can help you gather all information regarding mortgage loans in Florida that may be available to you, even if your application was rejected initially
- Help you to put a budget together, and make sure that your repayments fit into the budget comfortably
- Help in cleaning up your credit file so that you can get a better deal
- Educate you about different types of home loans available
Housing counselors are often employed by the government and so they charge you no fees or low cost counselling charges for their advice.
Finding a Guarantor
If you have somebody who is willing to guarantee your loan, it will make the process of getting a mortgage much easier for you.
The guarantor may be a friend or a family member who has a steady income and good credit score. This does not mean that you cannot get a mortgage if you do not have a guarantor. It just means that there are chances you may be charged a higher interest rate if the bank feels that your risk profile is high. Having a guarrantor will help you get best mortgage rates.
You should always remember to mention in your mortgage application that you have a guarantor because it may help in securing an approval.
Get a Co-Signer
If you are unable to find a guarantor, you can always get a co-signer for your mortgage application. This is somebody who agrees to be responsible for the loan in case you are not able to repay it.
The co-signer should have a good credit score and should be able to afford the monthly payments in case you are not able to. Keep in mind that the co-signer will be equally responsible for the loan and so if you default on your payments, they will have to bear the brunt as well.
So before you decide to go ahead with a co-signer make sure that you have discussed all the details with them and they are fully aware of the risks involved.
Make a Large Down Payment Against your Loan
If you can afford to make a large down payment against your mortgage, it will show the bank that you are serious about repaying the loan and reduce their risk.
This does not mean that you have to have a lot of money saved up to be able to make a down payment. You can also use the proceeds from the sale of your previous house or other investments to make a down payment.
This strategy however is only useful if you have a good credit rating and have no defaults or late payments on your credit file.
Get a Co-Borrower
If you do not want to get a guarantor, co-signer or use the proceeds from the sale of your previous property in order to make a large down payment, then you can always look for a co-borrower who is your spouse or your sibling.
For example a couple can apply for a mortgage where one partner is employed and other is not. However, one should know that the mortgage offered on a single income is lesser than when both incomes are combined.
So before you apply for a mortgage, it is always advisable to consult an expert who will be able to help you get the best deal possible.
Apply for a Non-Traditional Mortgage
There are few non-traditional mortgages available in the market today. These types of loans have been introduced to help people who qualify for mortgage loans but don’t have steady income sources. One such loan is the home equity line of credits, which allows you to borrow funds against the value of your home by making periodic payments.
Another type of loan is called a NINA loan, which is short for no income or assets. This type of loan is offered to people who do not have any steady income or assets and is usually very risky for the bank.
Keep in mind that the interest rates on these types of Florida mortgage loans are usually higher than traditional mortgages. So if you do not have a job or any assets, it is best to avoid applying for these types of loans.
Submit an Offer Letter
If you are unemployed, but have a job offer, you may want to consider submitting an offer letter to the bank. This is a letter from your potential employer that confirms that you have been offered a job and that you will be starting work within a specific time frame. Keep in mind that you will need to provide proof of income and employment once you start work.
Talk to Your Lender
Talk to your lender about your situation and see if there are any other options available. Ask them if they can provide you with reasonable mortgage rates in Florida or reduced monthly payments until you are able to find a job.
Some lenders may be willing to work with you, especially if you have been a good customer in the past. However, keep in mind that the terms and conditions offered by different lenders may vary. So it is always advisable to compare the different offers before you decide to go ahead with a particular lender.
To get your mortgage refinance in Florida while you are unemployed may be a difficult task, but it is not impossible. Thankfully there are many different options available to you, depending on your particular situation. So before you decide to give up on your dream of home ownership, it is always best to consult an experienced Florida mortgage company who will be able to help you get the best deal possible.