Example 2: Waiting for a Job

May not be the best use of time. There's more than just employment that comes into play when considering getting on the property ladder

A common misconception is that you must have a traditional job to buy a home. While steady employment can help, it’s not the only factor lenders consider when approving a mortgage. There are multiple ways to qualify, even without a W-2 income.

Where Did the "You Need a Job to Buy a Home" Myth Come From?

Income Stability Matters to Lenders – Historically, lenders favored borrowers with steady, W-2 employment because it showed predictable income. Traditional Mortgage Approval Standards – Most buyers in the past had jobs, so employment became synonymous with mortgage qualification. Fear of Loan Denial – Many people assume that without a job, they’ll be automatically denied, without realizing alternative ways to prove financial stability.

The Reality: What Actually Matters for Mortgage Qualification

Lenders care more about financial stability than whether you have a traditional job. Here’s what they evaluate:

1. Income (Not Just from a Job)

2. Debt-to-Income Ratio (DTI) – Ideally Below 43%

3. Credit Score (Typically 580-620+ Minimum)

4. Down Payment & Assets

5. Working with a Co-Borrower or Co-Signer

6. Loan Type & Lender Flexibility

But if you don’t meet mortgage qualifications based on these alone, you can add a co-borrower or co-signer to strengthen your application:

• Co-Borrower – This person (such as a spouse, parent, or business partner) shares ownership of the home and is equally responsible for the mortgage. Their income and credit history are factored into approval.

• Co-Signer – A co-signer doesn’t own the home but guarantees the loan. If the primary borrower fails to make payments, the co-signer is legally responsible.

A strong co-borrower or co-signer can help someone with low income, high debt, or limited credit history qualify for a mortgage they wouldn’t otherwise be approved for.

How to Make the Best Decision Knowing This

• Assess Your Income & Financial Strength – Even without a job, other income sources or assets may help you qualify.

• Lower Your DTI Before Applying – Paying down debt improves your approval chances.

• Check Your Credit Score & Improve It If Needed – A higher score saves thousands in interest over time.

• Consider a Co-Borrower or Co-Signer If Needed – This can be a game-changer if your financials alone aren’t strong enough.

Bottom Line

You don’t need a traditional job to buy a home—you need stable income, a reasonable DTI, and a solid financial profile. If your financials aren’t strong enough alone, a co-borrower or co-signer can help. Many freelancers, retirees, and investors successfully buy homes by leveraging these options.