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.