Can I apply for a home loan if I only work part time?

Any general questions you might have in regards to loans and finance.
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peanut
Posts: 28
Joined: Wed Jul 03, 2013 8:35 pm

Can I apply for a home loan if I only work part time?

Post by peanut »

Hey brokers, I work as a part time sales assistant and I want to apply for a home loan. I have looked at a one-bedroom house in the west side of Sydney and it is worth around $490,000. I would need to borrow around $455,000 for this. Since I don’t have a full time job, will this affect my chances of being approved for a home loan?

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Otto Dargan
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Re: Can I apply for a home loan if I only work part time?

Post by Otto Dargan »

Hi and welcome to the forums peanut,

Lenders are quite conservative and they may hesitate in approving home loans for part time workers. This is because majority of bank employees are standard full time employees who have been working in the same job for years and as a result, they often may not understand your employment choices which makes them a poor judge of determining the stability of your job.

This is also one of the reasons why most of them would require you to be in your job for longer than a full time employee and may even take less of your income into account.

One way you can get your home loan approved is to apply with a lender that will use a common sense approach when assessing your income. There are some lenders who may be willing to accept a loan application from part time employees.

Cheers,
Otto
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

peanut
Posts: 28
Joined: Wed Jul 03, 2013 8:35 pm

Re: Can I apply for a home loan if I only work part time?

Post by peanut »

So does that mean banks will not take my full income in to account?

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Otto Dargan
Mortgage Specialist
Posts: 7730
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
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Re: Can I apply for a home loan if I only work part time?

Post by Otto Dargan »

Hi peanut,

Yes, most lenders may only accept 50% of the income you receive from your part time job. In addition, this may only be considered if you have been in that job for at least one year.

Luckily, there are few lenders who will accept 100% of your income from your part time job and use this to assess your ability to repay a home loan. You would however be required to provide two of your most recent pay slips. You may also need to provide two years group certificates if you have been working for more than three months. This may however depend on the lender since each of them can have different requirements.

Since majority of lenders do not include all of the income from part time employees, the choice of lenders may be limited to one or two depending on how much you would like to borrow.

If you need help applying for a loan with a suitable lender then give us a call on 1300 889 743 or fill in our free assessment form. One of our mortgage brokers will get back to you to discuss more on a part time income home loan.

Cheers,
Otto
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

peanut
Posts: 28
Joined: Wed Jul 03, 2013 8:35 pm

Re: Can I apply for a home loan if I only work part time?

Post by peanut »

Okay, well I will call you guys tomorrow morning and hopefully I will qualify for it. Thanks for taking the time to answer my questions. Speak to you tomorrow!

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albee
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Joined: Wed Apr 07, 2010 12:04 pm

Re: Can I apply for a home loan if I only work part time?

Post by albee »

Hey, I also started out as a part time employee at my current workplace but my employer has offered me a full time job and has even agreed to increase my pay by a large percentage. I am planning to buy a house worth $500,000 and I need to borrow around 85% of the property value. Would the change in my employment status increase my chance of being approved for a home loan?

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Otto Dargan
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Posts: 7730
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
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Re: Can I apply for a home loan if I only work part time?

Post by Otto Dargan »

Hi albee,

Many lenders may still require at least six months of track record of this new income before they approve your loan application. However we do know some lenders who may accept your new income. For this, you would need to provide one pay slip showing your higher salary and a letter from your employer confirming your new hours.

Please keep in mind that your employment letter should be on a company letter head and it should include the following:
  • Contact numbers and the company ABN.
  • Date.
  • Signature.
  • The name of person who signed the letter.
  • The name of employee, gross income, length of employment and status (permanent part time / casual, etc.) of employment.
  • Explanation of anything unusual about your employment, if required.
Some lenders may accept a faxed copy while others require your mortgage broker to hold the original on file.

Cheers,
Otto
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

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albee
Posts: 45
Joined: Wed Apr 07, 2010 12:04 pm

Re: Can I apply for a home loan if I only work part time?

Post by albee »

Well, let me check on this and get back to you. Btw, thanks for your help! :)

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