Getting a mortgage without a job can be challenging but not impossible. In today’s dynamic financial landscape, there are specialized mortgage products designed to cater to individuals without traditional employment. Let’s explore three unique mortgage types – the Asset Depletion Loan, the No Ratio Mortgage, and the Debt-Service Coverage Ratio (DSCR) Loan – that offer alternatives for securing a mortgage without a job.

Asset Depletion Loan

An Asset Depletion Loan is a unique mortgage type that considers your liquid assets like investment and savings accounts as a source of income for loan qualification. In Denver, imagine a scenario where a buyer with substantial assets of $1 million but no traditional job income is looking to purchase a home. Let’s say the purchase price of the property is $1, 500,000.

With an Asset Depletion Loan, (aka asset amortization or utilization loan) the lender will require a larger down payment, let’s say 25%, due to the absence of employment and personal income. The buyer’s credit score plays a crucial role in securing this loan, typically needing a credit score of 700 or above to qualify. By leveraging their assets effectively, the buyer can demonstrate financial stability and secure the mortgage needed to purchase their dream home.

No Ratio Mortgage

A No Ratio Mortgage is another option for individuals in Colorado who lack traditional employment but have strong financial profiles. Consider a scenario where a buyer is interested in buying a property worth $500,000. With a No Ratio Mortgage, the debt-to-income ratio is not a primary factor during the application process. The borrower’s employment and income are not listed at all on the application so it won’t be calculated and means you may qualify for a mortgage with a DTI over 50, 60, or even 70.

The buyer will need to make a minimum down payment of 20% and have a credit score of at least 720 to qualify for this type of loan. By focusing on their assets and credit history rather than personal income sources, the buyer can secure financing for the property without the need for traditional job verification.

For this type of loan, the interest rates are the highest of the three mentioned here. In fact, you may use a no-ratio mortgage to buy a primary home as well. Most buyers choosing this path do it as a temporary means to get the property and then refinance six to twelve months later for a better rate.

Debt-Service Coverage Ratio (DSCR) Loan

The Debt-Service Coverage Ratio (DSCR) Loan is ideal for investment properties or rental homes in Colorado. Imagine an investor looking to purchase a rental property valued at $600,000. With this type of mortgage, lenders evaluate the property’s income potential rather than the borrower’s personal income or employment.

To qualify for a DSCR Loan, the investor will need to make a minimum down payment of 15-20% and have a credit score of 720 or above. By analyzing the property’s cash flow and ensuring it can cover mortgage payments, the investor can secure financing based on the property’s rental income rather than personal income sources. The underwriter will review the actual lease and appraiser’s rental income survey.

Here’s An Example Transaction: In Colorado, a buyer interested in purchasing a rental property without traditional employment may opt for a Debt-Service Coverage Ratio (DSCR) Loan. Suppose the property generates sufficient rental income to cover the mortgage payments based on its cash flow analysis. In this scenario, the lender focuses on the property’s revenue potential rather than the buyer’s job status, providing an opportunity for individuals without conventional employment to invest in real estate through specialized mortgage products.

Can I qualify for these mortgages with no job?
Yes, you can qualify for these mortgages without a job by demonstrating strong financial health, substantial assets, and a solid credit history.

Are interest rates higher for these specialized loans?
Interest rates for these loans are higher than traditional loans and will vary depending on the lender and your financial profile. It’s essential to compare different lenders to find the best terms.

How do I prove my income without a job?
When applying for these mortgages, you will have to provide documentation of your liquid assets, investment account statements, rental income (if applicable), and any other sources of income to demonstrate your ability to repay the loan. In conclusion, although it’s true these types of mortgage loans can present challenges and requires larger down payment and assets it can be well worth it until you have a method to document your income.

Alternative mortgage types like the Asset Depletion Loan, No Ratio Mortgage, and DSCR Loan can open doors to homeownership for individuals with unique financial situations. By understanding how these specialized loans work and meeting the eligibility criteria, you can get through the mortgage process successfully even without traditional employment.


William Cook

William Cook is a licensed mortgage originator and has over 10 years experience in the mortgage lending industry. He prides himself on educating clients to reach their real estate goals