Unusual employment loans

Is your employment situation just too hard?

If you’ve got a job and can afford a home loan then why won’t the banks help you? Surely there is someone who can use common sense rather than just referring to out of date guidelines?

Modern home loan lenders have started to understand that these days not everyone has a 9 – 5 jobs and not everyone can prove their income as easily. With overtime, probation, contractors and agency workers with multiple part time jobs it isn’t hard to see that most people these days don’t fit the banks normal rules.

Read below to see how you can get approval without having to argue with a bank manager!

We are specialists in lender guidelines

While most mortgage brokers are salesmen, our brokers are experts in the credit criteria of each lender and can quickly work out which lenders can lend to people in your current employment status. From there we can then compare the loans offered by those lenders and get back to you with two or three loans with the most competitive interest rates and fees.

What types of employment can we help with?

• On probation: Learn which lenders and loans are available for you when you have just started a new job.
• Contract workers: Find out the reasons why lenders don’t like contract employees and how to find a lender that will help.
• Self employed: Not all lenders read tax returns in the same way. Did you know some can use BAS statements or even just let you tell them what your income is?
• Casual employees: Just because you are technically casual it doesn’t mean that your income isn’t secure! You can get a home loan if your job is secure.
• Overtime reliance: Workers such as nurses, policemen & shift workers often get paid as much as a third or even half their income as overtime or other bonuses. Loans are available from lenders that will take your full income into consideration.
• Temp / Agency workers: These days agencies employ a significant part of the workforce. Most banks haven’t caught up with the times and still decline anyone employed through an agency. Of course not all lenders are the same!

We can also help in a variety of other situations & with a variety of other income types. Please give us a call or enquire online for more information.

How do banks assess your employment?

When you submit a home loan application the bank will give your loan a credit score based on the overall risk that you pose to the bank. Your employment and income stability forms a major part of this score. So what do the banks take into account?

• The length of time in your current job.
• The length of time in your industry (study is included).
• The tendency of people in your industry to default on loans (e.g. doctors are a low risk, builders are a high risk).
• Your employment status (full time, part time, casual, contract etc).
• The stability of your income (casual, overtime, bonuses, commission etc).
• Your reliance on any unstable income (e.g. is your partners income enough to service the debt, do you have cash reserves or income protection insurance to lower your risk).

In addition to the above list there are some other more complex factors that are specific to each lender. We recommend that you call us to discuss your employment situation if you believe you may have trouble getting a loan.

How do banks calculate your income?

One of the major problems faced by people who have an unusual employment situation is how can the bank work out their income when it fluctuates on a weekly basis? Australian lenders need to have documents evidencing the income that you have put on the application form. They meet this requirement by asking for payslips, group certificates, a letter from your employer or even bank statements.

As a general rule if banks could assess your income in one of two ways they will use the most conservative method of assessing your income. For example if you provided two recent payslips and your group certificate and they show two different incomes then they will use the lower of the two.

Unfortunately this means they often do not use your actual income! In particular, people who receive overtime income, work on a casual basis or who have received a pay rise in the last year tend to be assessed at a lower income than they are actually earning. So what can you do the make sure this doesn’t happen to you?

The secret to getting a lender to accept your true and correct income is to apply with a lender that views your situation in a favourable light and to then provide the best possible combination of documents to make sure they assess you on a high income. If your payslips show a low income because there has been no overtime in the last few weeks then provide your group certificate and a letter from your employer instead!

How can we help?

Our mortgage brokers are experts in the banks employment policies and in the methods they use to assess your income. We can select the lender that is best suited to you and then present the right documents to that lender to get approval. Best of all we usually deal with the major lenders and so you don’t have to pay a higher interest rate!