How difficult is it for a casual employee to be approved?

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totoro
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How difficult is it for a casual employee to be approved?

Post by totoro »

Hi home loan experts, I am a casual employee and I work at a retail store. I am planning to buy a house in two to three months and I would need to apply for a home loan to complete the purchase. I have been told that banks follow a strict guideline while assessing the employment history of the applicant. so how difficult would it be for me to get my home loan approved?

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Otto Dargan
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Re: How difficult is it for a casual employee to be approved

Post by Otto Dargan »

Hi and welcome to the forums totoro,

Lenders usually see borrowers with casual jobs as someone with a fairly unstable employment and fluctuating income. They also tend to think if an organization had to lay off their staff then the casual employees would be the first to be made redundant in such circumstances. This can make the lenders wary about whether or not the borrower will be to make their next loan repayment.

As a result, lenders may not easily approve loans of such applicants. In addition, your chances of being approved may also be affected if you are unable to prove your income.

Lenders will basically look at the following things when they assess your application:
  • How long you have been in your job.
  • If your previous job was in the same line of work.
  • How regular your work hours are.
  • The percentage of the property value you are borrowing.
  • If you have 5% in genuine savings.
Cheers,
Otto
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

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totoro
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Re: How difficult is it for a casual employee to be approved

Post by totoro »

Oh okay. By the way, what do the banks consider as genuine savings?

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Otto Dargan
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Re: How difficult is it for a casual employee to be approved

Post by Otto Dargan »

Hi totoro,

Lenders usually require the 5% of the purchase price to come from the applicant’s savings account which must have been accumulated over a specified number of months.

Some lenders may ask you to hold the funds for a total of six months instead of three months to see whether you are able to refrain from spending the money or not.

In some cases, lenders may even require your savings to increase over time. However, each lender may have their own definition of what should be considered as genuine savings.

The following are some of the things that may usually be accepted as genuine savings by our lenders:
  • The money saved in your bank account over the last three months.
  • The money held in a term deposit for over three months.
  • Equity held in an existing property (accepted by only some lenders).
  • If you have received any proceeds from the sale of a property (accepted by only some lenders).
  • Shares or managed funds held for three months.
In addition to these, some lenders may also accept the weekly rent paid by the applicant as genuine savings. If you have been renting for at least three months then other types of genuine savings such as cash from the sale of your car, an inheritance, or a bonus from work may also be accepted by one of our lenders.

If you would like to know more about these then you can check out our website. We can also be reached on 1300 889 743 or you can fill in our free assessment form to see if you qualify for a loan or not.

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

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totoro
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Joined: Wed Jun 17, 2009 4:58 pm

Re: How difficult is it for a casual employee to be approved

Post by totoro »

Great! I had sold my old car a couple of months ago for a decent amount. Will call you to check if this will be accepted by the lenders you work with. So I will contact you guys within the next two days. By the way, thanks for the help! Bye!

Robert
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Joined: Wed Jul 03, 2013 2:29 pm

Re: How difficult is it for a casual employee to be approved

Post by Robert »

Hi there brokers, like totoro, I too am thinking about buying a house and I have been working part time at a retail store. Could you tell me if it will be difficult for a part timers to be approved for a home loan?

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Otto Dargan
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Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
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Re: How difficult is it for a casual employee to be approved

Post by Otto Dargan »

Hi Robert,

Lenders tend to be quite conservative while approving home loans from applicants who work part time. This is because majority of bank employees are standard full time employees who have been working in the same job for years. This can lead to a difficulty in understanding certain employment choices made by the applicants.

As a result, this may make them a poor judge of determining the stability of a part time job. Moreover, most lenders may 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 to increase your chances of approval for a home loan would be to apply with a lender that will use a common sense approach while 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

Robert
Posts: 60
Joined: Wed Jul 03, 2013 2:29 pm

Re: How difficult is it for a casual employee to be approved

Post by Robert »

Well, I would love to find out which lenders have a more liberal way of assessing my income. I will probably call you guys for this.

Thanks for the answer!

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