Contractor home loan

YES contract workers can get home loans!

With a labour shortage gripping Australia many people have taken the leap into contract employment to secure better pay.

At the same time more companies are outsourcing departments & staff to become more efficient.

Lenders often outsource their staff but strangely enough don’t seem to understand or support lending to contractors!

Each type of contract worker is treated differently by the banks, read on to find out more…

Subcontractors

Subcontractors can be employed on a PAYG basis or as a self employed contractor. Subcontractors are common in the mining and construction industries.

Please refer to either the PAYG Contractor or Self Employed Contractor section for information on how the lenders will assess your mortgage.

PAYG contractors

PAYG contractors are employed on a fixed term, short term or long term contract, usually with an end date or in some cases with an automatic roll-over to a new contract.

They can receive normal holiday & sick leave benefits (depending on their contract terms) while also having their tax withheld and super paid for.

PAYG contractors generally have to prove a strong track record of experience in the same industry as well as future employment stability.

However one of our banks can consider lending to people employed on a PAYG contract with normal home loan rates even if they have one day on the job!

Do you need help with your mortgage? Our mortgage brokers are experts in lending to PAYG contractors.

Please call us on 1300 889 743 or enquire online to discuss your situation with one of our specialists.

Self Employed contractors

Self employed contractors are usually sole traders with a registered ABN who invoice their employer and then pay for any expenses such as their own wages from their business’s income.

In other cases they set up a company or trust which enters into the contract, which then employs them on a PAYG basis.

Management consultants in most cases come under the category of self employed contractors.

Most self employed borrowers need to be in their current role for two years before they can get a mortgage.

However one of our lenders looks favourable on contractors if they just contract to one main employer and if they work for a hourly or daily rate.

In these situations we will need to prove your current income with your invoices as well as your prior income in past roles.

If you are in a white collar profession and have no expenses of your own then we can help you even if you have been in your job for just one day!

If your pay fluctuates significantly then we may need to prove more than a 12 month employment history to enable the lender to accurately determine your income.

Generally the lender will calculate your average income less any GST component and taking into account 2 – 4 weeks in unpaid holidays each year.

Note: We can help self employed contractors in most situations, even if they have set up their own company which invoices the company they contract to.

In particular if you have no staff other than yourself & no major expenses then one of our lenders can approve a loan for you!

All of our mortgage brokers are self employed contractors, just like you, and know how to get your loan approved!

Speak to one of our team today on 1300 889 743 or enquire online and find out how we can help you obtain a mortgage!

Mining contractors

Mining contractors are a special case because they earn some of the best salaries in Australia.

However they may have fixed term employment contracts or may move between mines depending on the availability of work.

One of our lenders can approve mine worker home loans by taking a common sense approach and acknowledging that most workers can easily find alternative employment in the event that their contract is not renewed.

If you are a mining contractor and are looking at applying for a mortgage, speak to us today on 1300 889 743 or enquire online.

Our expert brokers will ensure that the process goes as smoothly as possible!

IT contractors or IT consultants

IT consultants are the most common type of contractor that we work with.

Specialist IT advisers are some of the highest paid workers in Australia yet many lenders do not understand their industry and decline their loan applications!

Due to the low number of skilled IT consultants in Australia and the high demand from employers we believe IT industry contract workers are actually a very low risk and so we are happy to assist you.

To find out how we can help, contact us on 1300 889 743 or enquire online today!

Construction Contractors

A construction contractor may work on a construction project until its completion or the contract may be rolling so that they continue to take on projects for the company.

If the contractor provides his own materials he may be considered by the banks as being self-employed.

This means that he will be assessed in the same way as a self-employed contractor and may be required to provide the bank with two years recent tax returns.

However, if they just provide the labour, they may be assessed like any other contractor.

If you are a construction contractor and are unsure of how the banks will view your application, call us today on 1300 889 743 or enquire online so that our expert team can assist you.

Freelancers / Journalists

Freelancers are typically paid on a per article basis or are employed for several projects.

As a freelance worker your income can be assessed using several different methods depending on the frequency, reliability & ongoing nature of your income.

To find out which lender will approve your mortgage, contact us on 1300 889 743 or enquire online and speak to one of our mortgage brokers who will help you get approval.

What do the lenders think?

Contractors are typically treated like casual employees by the banks. They are considered to be in a very unstable employment arrangement with a high chance of having their contract cancelled, even if they are employed through a major contractor management firm such as Contract1 or Ambit.

What documents will I need to provide?

In most cases you will be asked to evidence your income and future employment stability through a letter of employment.

If you require an employment letter template please contact the Home Loan Experts team on 1300 889 743 and our mortgage brokers will be able to provide you with one.

The secret to getting a home loan while working as a contractor is to apply with the right bank!

Please enquire online to speak to a mortgage broker who can help you to get approved!

Which lenders can help?

Contract worker home loans are usually sourced through major banks that specialise in ABN contractors & PAYG contractors.

Non conforming non-bank lenders may also be able to help however in most cases we prefer to work with major lenders as then you can get a very competitive interest rate.

Which loan types are available?

All loan types: Professional packages, basic loans, lines of credit, fixed rates.

How much can I borrow?

You can borrow up to 90% of the property value plus LMI using a bank loan depending on what type of employment contract you have with your employer.

If you are in a strong financial position we can help you to get approved for a 95% or 100% mortgage (100% only available as a guarantor loan).

What can I use the loan for?

The home loan can be used for home / domestic use, investing, purchases, mortgage refinances and construction are all acceptable loan purposes.

Who this loan is for?

This type of home loan is for PAYG contract workers / contractors, subcontractors and self employed contractors that have only themselves working in their own business and who contract to one main employer / client.

Low doc loans are also available.

Discounts

Professional package and basic loan discounts are available. You should be eligible for a significant discount below the bank standard variable rate.

Loan features

All loan features: Interest only, fixed rate, line of credit, 100% offset, redraw, extra repayments.

Apply for a mortgage

Contract employees usually have a high chance of getting their loan approved if the loan is submitted to the right bank.

We are experts in this field and would love to help you buy a home or get a better interest rate by refinancing.

We can even help mining contractors, IT contractors & freelance journalists who have great difficulty obtaining a loan from most banks.

Please call us on 1300 889 743 or enquire online for a quote for a contractor mortgage.