Can You Buy a House if You Don't Work Full-time?

Today, the work environment has shifted from the office to online and at home. Along with the COVID-19 pandemic, more businesses have also moved to flexible working hours with the result that more people are spending fewer hours dedicated to work. Flextime is becoming more popular and while this approach has assisted many in keeping their jobs, it has also meant pay cuts.

With half days and fewer working hours, what does this mean for part-time employees who want to buy a house?

If you’ve already looked into taking on a mortgage you may have noticed that one of the requirements is a full-time income. The good news is that despite the rise in part-time work, trying to get a mortgage on flexible working hours is not a new concept. In fact, it’s been around for years and only recently with a shift in the workforce, have banking institutions started easing how strict the requirements are to qualify for a home loan. While it will still take some time and the completion of additional documentation, you can qualify for a home loan to purchase property when you work part-time.

Getting Approved on a Part-time Income

Today’s lenders are looking for stability which means the ability to continue to pay your home loan without defaulting on the repayment. Whether you have a part-time job or you work flexible hours in addition to a full-time position, there are steps that you can follow to get a mortgage.

The general rule is that if you have a part-time job as your sole source of income, you need to provide proof that it is stable, that it will continue, and for some, that you have been working for at least 2 years.

The rules to get approved for a home loan also differ according to the lender. Every bank or lender will have its own set of regulations concerning mortgage approval. While those on a part-time income won’t be denied a home loan, they must always provide proof of stability and affordability.

To improve the chance of receiving approval for a home loan, you can request a letter from the employer breaking down your value to the organization and that you have a stable position with them. Even if this isn’t requested by the lender, adding a letter of motivation can only count in your favor.

You will also need to have good credit because the odds of bad credit and getting approved are very slim.

Lenders want peace of mind that you have an ongoing income and that your current employment won’t end in the next few months. While no job is guaranteed, whether full or part-time, there are factors that lenders look for to ensure financial security for all parties involved.

Getting a Mortgage on a Low Income

Earning a part-time salary doesn’t necessarily mean that it’s a low income. Many people earn quite well on flexible hours making it easier to save for a deposit and to get approved for the desired mortgage.

If you earn $12-$16 an hour buying a house is certainly not impossible. Low income house buyers can still qualify for a mortgage and the purchase of property but it will take some time and effort to ensure that you meet the qualifying criteria, that you have enough for a deposit, and that you have the requested documentation.

It’s all about learning what the banks want and how to satisfy these requirements. Even borrowers on a full-time income can have a tough time getting approved for a mortgage. Once you provide the banks with what they need, it is best to remain hopeful and to simply try again if the application is denied.

Buying a home is both exciting and stressful. It is best to apply to more than one lender and to always consider the interest rates on a mortgage before you accept the terms and conditions.

Remember that homeownership is a journey with many ups and downs but once you get approved and you invest in your own home, it will all be worth it.