How To: Get a Mortgage When You Work Part-Time

You’re ready to buy a home, but you’re not sure if you can get a mortgage since you’re only working part time.

You absolutely can. And getting a mortgage while you’re working part-time isn’t that different than getting a mortgage with a full-time job.

Your lender is still going to be looking at your debt-to-income ratio and your credit score (so you might want to start working on improving your credit score).

They’re also going to ask for a 20 percent down payment—or ask you to get private mortgage insurance. And if you're lucky enough, or good enough at your job, to be well-compensated while only working part-time, good for you!

With a part-time job, there are a couple of other things you’ll have to explain and prove to your lender.

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Why are you working part time?

Working part-time doesn’t mean you can’t get a mortgage, but be prepared to explain.

It might be that you make a great income working part-time, or that you have more than one part-time job, and you actually work 40 hours. Or it might be that there’s a down economy and part-time work is all that’s available right now.

Whatever the reason, be prepared to explain it to your lender.

Do you have a solid down payment?

The less you need to borrow, the better. A larger than usual down payment also shows that you can and do save.

Have you been working for at least two years?

With a full-time, salaried position, your letter of hire is usually enough for a lender.

But when you’re working part-time, your lender likes to know you’ve been doing it for at least two years. And that’s also true if you have a part-time second job that supplements your full-time salary.

Is your work steady?

In addition to showing you’ve been working for two years, your lender is also going to want to know you’re likely to keep working there.

So if it’s a contract job that’s coming to an end, or if the business is closing or cutting back jobs, that might raise a red flag.

Ultimately, your mortgage lender just wants to know how likely it is that you'll be able to pay back your loan. Specifically, they need to know that it's very likely.

As long as you're able to show that, you should be good to go. You may want to start with your own bank because they're more familiar with your financial habits. Do a little shopping around, and you should be able to find a loan. Happy house hunting!