A Quick Overview
|Customer Goal||To get a joint home loan for purchasing a property to live in with his wife|
|Problem||An unstable income stream as a casual worker|
|LVR and Term||91.99% (LVR) loan to value ratio, 30 years|
|Solution||Proving the stability of income stream by presenting his long-term employment status in the same post and industry|
Justine, a happily married man in his late twenties, wanted to get himself and his wife a house of their own.
He earned an income of $147,032, which was almost double to his wife’s income.
Naturally, the couple decided on taking a home loan where Justine would be the primary applicant. He would also take up a larger share of the home loan than his wife.
A significant benefit they could make use of?
Since both of them were first home buyers, they were eligible for the First Home Buyer Grant.
The roadblock: casual employment
Although Justine and his wife had impressive savings, they did not want to spend it all on the home loan process and deposit.
But, because Justine was a causal worker, his case fell under the Low Doc home loans.
So, the deals offered by lenders were unimpressive.
They would have to pay higher than standard interest rates and make a higher deposit.
Additionally, most lenders would not accept his case in the first place. The reason being, most lenders require casual workers to be employed at the same job for at least twelve months.
Justine had barely made it through 3 months with his new PAYG contractor so lenders would not accept his home loan application.
His wife was a nurse and could apply for nurse home loans. But for the property they were eyeing, her income as a primary applicant would not be enough for servicing the loan.
Hence, the options were very narrow for them, with Justine having to be the primary applicant.
Getting a formal approval
The couple started searching for solutions online, and that is when they came across our website. They placed an enquiry, and in no time, they got connected with one of our expert brokers, Sheng Ye.
For getting Justine’s current PAYG employment of three months approved, he presented the following facts:
- Evidence of his continuous employment in the same role and industry (IT) for five years
- Was a PAYG employee in a bank for the last four years but started working as a PAYG contractor because of a higher scope of income; he is earning more now than before
- Is employed to a new sub-contractor for the recent three months, but his primary employer (the bank) remains the same
Similarly, to convince the lender of his ability to repay the loan, the following documents were presented:
- Tax returns for the last two years
- His recent two payslips that showed his regular payments on a per-day rate
- Records to show the stability in his income when he transitioned from one sub-contractor the other
- Savings amounting to a total of $131902 across different bank accounts
Once they were able to convince the lender of his strong position, they went ahead with the loan process. And in a swift span, the couple received formal approval for their home loan.
A happy ending
Justine got a good deal on his home loan, better than what a traditional Low Doc home loan had to offer.
The couple split their interest rate repayment option into two, based on a professional home loan package.
They would pay a fixed rate of 1.97% p.a. for two years in the first half. And in the second, they would pay at a variable interest rate of 2.86% p.a. This was a bargain deal compared to the interest rates generally offered to casual workers.
They also made use of the first home loan deposit scheme, so all in all, in the end, they were at the most profitable position.
Are you casually employed?
If you are a casual employee and are contemplating on whether or not can casual workers get home loans, our mortgage brokers can help you figure it out based on your unique case.
Our specialist mortgage brokers are experts in casual worker home loans and know how to get a deal through!
You can call us on 1300 889 743 or fill in our free assessment form.