Agency worker looking for a mortgage to buy a house

Any general questions you might have in regards to loans and finance.
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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: Agency worker looking for a mortgage to buy a house

Post by Otto Dargan »

Hi Joerooty and welcome to the forum.

It’ is true that banks consider an agency worker or temporary employee a higher risk than a full time permanent worker. If you are an agency worker then you may find that their guidelines are designed to stop you from getting a loan.

Generally, lenders tend to decline your loan if they simply see your payslips with a recruitment agency’s letterhead. However, we know they aren't right in thinking that all agency and temp workers are the same!

If you have not even been working for a year then some lenders may not understand that you may be in a strong financial position and may be able to support a loan.

The banks think that agency workers often choose to work through an agency to earn a higher income or to get a fresh job every few months. The first part isn't the issue for the banks - it's the fact that you're switching jobs regularly. Banks want stability in their borrowers!

Luckily, few lenders can approve your home loan on basis of your three-month job history rather than the standard 12-month requirement, as long as you have a track record of study or employment in the same field of work or industry.

If your income is:
  • Stable or regular, e.g. a fixed weekly salary, then you may be able to get a loan if you have been in your job less than 12 months.
  • For fluctuating income you'll generally need to have a three-month track record. This is to allow the lender to complete an annualised Year To Date assessment of your income.
If you’re in a strong financial position and have been in your current role for 6-12 months, we may be able to help you obtain a 95% home loan.

If you'd like to discuss this with one of our mortgage specialists directly then you can call 1300 889 743.

We can help you build a strong case with the right lender.

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

User avatar
Otto Dargan
Mortgage Specialist
Posts: 7730
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
Contact:

Re: Agency worker looking for a mortgage to buy a house

Post by Otto Dargan »

Hi Joerooty,

Borrowing 95% is relatively difficult compared to other home loans because you’ll need to meet stricter bank criteria to get approved:
  • Clear credit history: This means that your credit file has no flags whatsoever, specifically, payment of your bills such as rent, credit cards, personal loans and other debts need to have been on time every time for the last 6 months.
  • Stable employment: In most cases, you must have been in your current job for 6 to 12 months.
  • A good income: Lenders are more conservative when assessing your ability to repay a 95% loan. For this reason, your ‘serviceability ratio‘ must be outstanding.
  • Reasonable asset position: Lenders want to see that you have a good asset position relative to your age and income.
  • Genuine savings: Almost all lenders require you to prove that you’ve saved 5% of the purchase price. However, if you don’t have genuine savings, then consider a 95% no savings loan or a 110% guarantor home loan.
  • Minimal debts: People with many credit cards and personal loans are generally not accepted. As a rough guide, people who have more than 5% of the purchase price in unsecured debts such as personal loans and credit cards are often not approved.
  • Location/property type: Many lenders may be hesitant to approve loans for properties in smaller towns, high rise units in the CBD or unusual properties.
Call us on 1300 889 743 or fill in our free assessment form and one of our mortgage brokers can let you know if you qualify for a 95% home loan.

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

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