On probation home loan

You CAN get a home loan while on probation!

Have you just started a new job? Chances are you’re now getting a decent salary and can afford to buy that house down the road that’s going to auction in a few weeks. But there’s a problem, your bank has told you that you’ll have to wait until you are no longer on a probationary period before you can get a loan!

It doesn’t make sense right? You’re a professional in high demand and you’re now earning a great salary in stable employment. Shouldn’t the banks be throwing money at someone with your career prospects? Not all banks think the same way about people who are on probation. Read on to find out why they don’t like short term employment and how to get approval…
Just starting new job

What do lenders think?

From a bank’s point of view lending money is a careful balance between risk and return. Most lenders will look at borrowers on a probationary period and just see the additional risk that they might have their employment terminated at any time. Other lenders know that if someone has a track record of experience in the same line of work or who have studied that field at university have a high chance of keeping their job or getting another job anyway.

The idea behind a probation period is that it allows both the employer and you as the employee to see how well you suit each other. Either can usually terminate the employment agreement by giving one or two weeks notice during the probationary period. Most credit staff working for banks have been in their job for well over five years and consider new staff to be very unstable. Because of this mentality most lenders will show you the door. Luckily there are some lenders who take a common sense approach to lending.

Which lenders can help?

For this type of situation it is possible to get approval from a reputable lender with competitive interest rates. Non conforming non-bank lenders may also be able to help. Contact us or enquire online to speak to a mortgage broker who specialises in finding home loans for people who are on probation.

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 95% of the property value.

What can I use the loan for?

Home / domestic use, investing, purchases, refinances and construction are all acceptable loan purposes.

Who this loan is for?

Professionals with a stable employment or study record in the same industry or line of work as their current job. You may have just started your job or already have one or two months in your job. As long as your situation “makes sense” then we can usually find a mortgage lender for you.

In particular more lenders favour teachers, nurses, mining industry professionals and any other line of work that is in high demand.

Who this loan is not for?

Self employed and low doc borrowers will have difficultly borrowing money if they have just started in a new job or business. Low doc borrowers applying for less than 60% of the property value can still obtain a loan.

Discounts

Professional package and basic loan discounts are available. In most cases you will pay the same interest rate on your finance as somebody who has finished their probationary period.

Loan features

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

Notes

If you aren’t sure if your employment is subject to a period of probation then please refer to your Australian Workplace Agreement (AWA), contract of employment or call the human resources department to confirm your employment status. It is common for almost all new jobs to have a 3 month or 6 month probation period, especially when you have made a career change to a new industry.

Apply for a loan

We only recommend that you apply for a home or investment loan while on probation if you believe your employment is stable. If you believe that your employer may terminate your employment during your trial period then obviously it is not in your best interests to risk applying for a home loan.

Contact us or enquire online to obtain a quote from a lender for a home loan while you are on probation.