Is it possible to get a mortgage when unemployed?

[trumptrump]

I have a good amount of savings. In a few months, I will be leaving my job to do six months of training. During this time, I will be unemployed, but registered as a student.

I am looking to buy a house, and I have about half the money that I'll need, so I'll need a mortgage for the other half. Is it possible to get a mortgage when you're unemployed if you have savings and good earning potential?

Highly highly unlikely

Get the mortgage before you leave your current job.

Plus your savings will be paying the deposit surely?

So that will mean just “good earning potential”

I’m afraid you will not get a mortgage

No

I have 35k in savings. In my area, houses are around 100k. I was thinking I could pay a deposit of 10-15k, and then just pay the mortgage monthly. I will definitely be back in employment before my savings run out.

You cannot guarantee that you will definitely be in paid employment. If this was guaranteed then everyone who was made redundant etc would face such difficulties in getting a job and savings gone.

Try

But you won’t get.

I’m sorry OP but it’s the truth. Pop in your details online; pop in to a mortgage broker; speak with your bank re mortgages they offer

No sorry you won't, and neither should you..irresponsible lending

No lenders will offer you a mortgage if you don’t have a regular income.

What’s the rush anyway? Personally, with Brexit looming I wouldn’t be buying a house right now. I’d be sitting right for a while and see what happens to the market.

Mortgage providers usually require proof of employment and at least three months pay slips and bank statements to check you can afford the repayments. If you have no income I can’t see you getting a mortgage. You should try now or accept you’ll need to wait until you’ve been in a job for six months or so.

I don't see why you can't buy a house now.

If you are fairly certain you won't want to move in the short term, I would buy now with £10-20k deposit - you get better interest rates once your deposit goes above 10/15/20% so try to make sure you achieve this, but obviously you need to keep back some savings to fund your training period.

Once you have your mortgage, the lender won't care what you do as long as you keep paying them, so as long as you can definitely be back in employment once the training is over, I don't see a problem.

Otherwise you will need to wait until you have been back in employment for a year or two, so delays your plans significantly.

Unless you have some other form on income they simply wouldn’t lend to you.

The mortgage company will want to have a solid idea of how you propose to pay your mortgage. If you don't have a job, I don't think you will get a mortgage - even if you have savings.

I’d buy the house now whilst employed. I would then rent a room out until employed again.

You have 35k but I would deduct approx 5k for all of your fees (estate agent, surveys, solicitors, moving costs). So technically 30k 15k deposit on a 100k house is about Normal so LTV Rate wouldn’t be considered amazing by any means. I wouldn’t see it as an amazing position and you would be surprised how fast 15k can dwindle when paying mortgage,bills, insurances etc. if anything extreme happens like boiler breakdown or a leak what will you do?? Get the mortgage before you leave your job but I would be hesitant in leaving it anyway if I’m honest.

Fees will be nowhere near £5k. As a FTB, the OP won't pay any estate agency fees and the rest will be £1-2k tops.

I'm sure she's done her homework about how much money she needs to live on while she's studying too.

But she needs to do it soon, so she is still in employment when the mortgage completes. I don't know if lenders contact employers these days, but obviously if they ring her workplace and say 'does trump work for you' and they tell them that she's handed her notice in, that will obviously scupper the whole idea.

🤣 I got caught up in fees of selling there and forgot estate agent didn’t apply when buying! 🤣🤣

@Barbaraofseville some people don’t research these kind of things at all. There’s no harm in me reminding OP of unexpected expenses!

@barbaraofseville it's stamp duty that the OP won't have to pay as a FTB. They won't pay estate agents fees as a buyer unless they're also selling a property.

Barbara
What you say makes sense
But doesn’t change fact that op will not get a mortgage!

I know the OP won't have to pay stamp duty, and at that price her FTB status is irrelevant.

I've bought two houses and not paid a penny in stamp duty because they were both below the threshold at the time. It's fairly clear that the OP isn't selling another property too, she would have mentioned it.

Therefore, I was simply pointing out that the estimate of £5k for fees was vastly more than it will be in reality, so the fees that eat into the deposit and subsequent amount that the OP has to live on will be far lower, thus making it far more doable.

I think a lot of people on this thread are taking their own experience of a high cost, high spend London family lifestyle and applying it to the OPs completely different situation, where it sounds like she spends far less, is single and probably childfree.

Therefore the £15-20k she will have to live on for 6 months, and possibly more, will be more than ample, as will a similar amount for a deposit on the house she is looking to buy.

Why won't she get a mortgage if she is currently working, has a deposit and presumably meets affordability criteria, as long as it is all sorted before the mortgage completes, which I did mention as a caveat?

For anyone, circumstances can change shortly after a mortgage is taken out, you can't guarantee you won't get ill, made redundant etc, and I really don't see anything wrong with the OPs plan, providing she can get a mortgage sorted before she leaves her job, and a new one afterwards (or back to the old one?) is as certain as she believes.

Therefore the £15-20k she will have to live on for 6 months, and possibly more, will be more than ample, as will a similar amount for a deposit on the house she is looking to buy

Yes, but a mortgage lender still don’t lend with no income. It would be irresponsible. How do they know she’ll have an income in 6 months?

How does anyone know they will have an income in 6 months? My job is as secure as can be, but things can change, people get ill, have accidents, get made redundant, unexpectedly pregnant, etc.

If the OP hasn't told her employer about her plans and doesn't disclose them to the mortgage company, they will assess her on her current situation.

They too know that people's situations can change. That's why they ask for a deposit - so if it all goes pear shaped the day after you move in and you never pay a penny off the mortgage, they still have a good chance of getting all their money back when they reposses the house.

She still won't get a mortgage with no income though. OP As pps have said, either get your mortgage now while you are employed, or expect to wait until you have been in a new job for 3-6months. No lender will give you a mortgage just with savings and your word that you will get another job.