Can I Get a Mortgage Without a Job If I have Savings?
In 2020, the average home price in Australia hovered around $550,000. In May 2021, Australians held an estimated 6 million mortgages against 10.3 million properties. This means that a lot of lenders are financing home purchases. Lenders can only remain in business if they take calculated risks. A mortgage applicant who has no job poses a lending risk.
Individuals ask if they can attain a mortgage without a job and significant savings. The answer is it depends. Let’s explore the lender’s perspective.
How Much is Significant Savings?
Some individuals do come into a windfall of money, such as a settlement or an inheritance. A lender takes into account an applicant’s deposit amount, savings amount, and employment history.
If you plan to purchase a $500,000 home and your savings plus deposit totals $300,000, there’s still a difference of $200,000 that must be funded. At 4% over 30 years, you’re going to incur a monthly repayment amount of $850. If you have no job, the lender sees you as a risk.
The other option is to put down a 20% deposit and use the remaining savings to pay off the mortgage in monthly repayments. The lender considers how many years your savings is going to last given that you have expenses, too. An emergency can always occur as well.
Temporary job loss can happen to anyone. A lender explores your current jobless situation. Is it temporary, or is it a situation that you have been in before?
Lenders run a thorough financial background check whether you are currently employed or not. When applying for a mortgage, include as much supporting documentation as possible to make your case.
Mortgage Without A Job Conclusion
It’s difficult to obtain a mortgage without a job. Without a job, the lender doubts your ability to repay the home loan. Significant savings help you make a case, but there needs to be proof that you’ll have income at some point during the duration of the loan to finish paying it off. At Mortgage House, we’re known for being forward-thinking and innovative. We offer our clients more than one mortgage choice. Contact our team for more information.