Can I get a mortgage as a part time worker?

Any general questions you might have in regards to loans and finance.
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twoba
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Joined: Mon Jun 15, 2009 12:11 pm

Can I get a mortgage as a part time worker?

Post by twoba »

Hi there,

I work part time for a publishing company and have an annual income of about $28,000 from the job. I was thinking about getting a mortgage, but I have heard that banks give a hard time to part time workers. Is that really true? I would be grateful if anyone could provide some insight into the matter.

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Otto Dargan
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Re: Can I get a mortgage as a part time worker?

Post by Otto Dargan »

Hi twoba,

It may be more difficult for part time workers to get a mortgage. Such applicants may be required to be in their jobs for a longer period than full time employees who apply for a loan. Furthermore, lenders may not take the full amount of the income of part timers into account when assessing their loan application. This is especially true if they have more than one job.

Most lenders only accept 50% of the income received from a part time job and even for that the borrower should have been working at the job for at least a year. However, not all lenders are so conservative and there are lenders who may accept 100% of your income while assessing your home loan application.

You need to provide your two most recent payslips and group certificates for two years if you have been working for more than three months. Different lenders have different policies on what they consider to be the evidence of your income.

It is essential for you to find the right type of lender that will consider such applications by taking a common sense approach. You should contact a mortgage broker as they may be able to give you more information on which lenders have less strict requirements for part timers.

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

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twoba
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Re: Can I get a mortgage as a part time worker?

Post by twoba »

Hi Otto,

Thanks for the reply. It seems that I will not be able to borrow as much as I want due to the complex policies of banks. I will just start working full time now. My employers have, as a matter of fact, offered me to work full time recently. I hope that will enable me to borrow more.

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Otto Dargan
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Re: Can I get a mortgage as a part time worker?

Post by Otto Dargan »

Hi twoba,

Part time workers may be able to increase their working hours or convert to full time employment when they make additional commitments like that of buying a home. However, lenders may require them to be working increased hours for at least six months in order to consider this extra income for the loan application.

However, some of the lenders may accept your new income if you are able to provide a recent payslip that shows your newer salary and an employment letter confirming the new hours.

You can surf through our website if you need more information on home loans for part time workers. If you to discuss your home loan application in detail then you can call us on 1300 889 743 or fill out our free assessment form.

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

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twoba
Posts: 50
Joined: Mon Jun 15, 2009 12:11 pm

Re: Can I get a mortgage as a part time worker?

Post by twoba »

Thank you for the information, I guess I will have to put my plan on hold for now. I will still call you to see if there is any way through which I would be able more.

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arnie
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Joined: Thu Jun 27, 2013 3:47 pm

Re: Can I get a mortgage as a part time worker?

Post by arnie »

Hi home loan experts!

I am a part time worker, too. I want to buy a house worth $430,000 and I have around $120,000 available for the deposit. My income has increased recently and I believe I can afford the loan repayments comfortably. However, I learned from this thread that I may need an employment letter.

I am not sure what an employment letter really is. Could anyone please tell me what details are included in an employment letter?

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Otto Dargan
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Re: Can I get a mortgage as a part time worker?

Post by Otto Dargan »

Hi arnie,

The employment letter should meet the following criteria:
  • It should be on a company letter head that has contact numbers and the Australian Business Number (ABN) on it.
  • It has to be dated.
  • It should be signed by an authorised person.
  • It must contain the name of the person who signed the letter.
  • It should contain the name of the employee, gross income, length of employment and status (i.e. permanent part time, casual, etc.)
  • It should explain any unusual circumstances of your employment.
Lenders may ask for additional clarifications related to your income such as:
  • Deductions from pay
  • Salary packaging
  • Company car
  • Change of income
  • Employment stability
  • Probation period
  • Overtime income
  • Self-employed contractor
  • Maternity leave
  • Year to date income
  • Pay fluctuations
  • PAYG contractor
Since many employers do not talk directly to lenders due to privacy legislation, you will have to request your employer to write a letter for the lender. It may be better to contact a mortgage broker who can talk to the lender’s credit manager in order to avoid unnecessary delays.

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

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arnie
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Joined: Thu Jun 27, 2013 3:47 pm

Re: Can I get a mortgage as a part time worker?

Post by arnie »

Thank you for the clarification. Your reply is really helpful to me. Cheers!

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