If you’ve got a job and can afford a home loan, why won’t the banks help you?
With overtime, probation, contractors and agency workers with multiple part time jobs, it isn’t hard to see that most people don’t fit the banks normal rules.
Luckily, modern home loan lenders are beginning to understand that these days not everyone has a 9-5 job and not everyone can prove their income as easily as they’d like to. You can still get a home loan!
In response to the COVID-19 pandemic, banks have tightened their lending policies around unusual employment. To learn more, talk to our mortgage brokers at 1300 889 743 or fill in our online enquiry form.
Got an unusual job and banks wont help?
Talk to our experts to get a free assessment.
Our popular articles on unusual employment loans
We’ll find a lender that understands your situation.
Will I be eligible for all types of loans?
Does it matter what type of contract work I do?
How will the banks assess my income?
Can I get approved if I’m currently pregnant?
Which benefits are accepted?
We’ll find a lender that understands your situation.
Discover how much you could save!
Get special interest rates and waived LMI!
How can I get approval?
The secret to getting a lender to accept your income as true and correct is to apply with a lender that views your situation in a favourable light.
Providing the best possible combination of documents will also help to ensure that they assess you as earning a strong income.
For example, if your payslips show a low income because you’ve done no overtime in the last few weeks, provide your group certificate and a letter from your employer instead!
We’re experts in getting loans approved for people with unusual employment!
With our expertise, we can help you compare the loans offered by those lenders and get back to you with two or three loans with the most competitive interest rates and fees!
Call us on 1300 889 743 or complete our free assessment form today!
What types of employment can we help with?
- On probation: Learn which lenders and loans are available to you when you have just started a new job.
- Contract workers: Find out the reasons why lenders don’t like contract employees and how to find a lender that offer contractor mortgages.
- Self employed: Not all lenders read tax returns in the same way. Did you know some can use BAS statements or even just let you tell them what your income is?
- Casual employees: Just because you are technically casual it doesn’t mean that your income isn’t secure! You can get a home loan if your job is secure.
- Overtime reliance: As much as a third or even half of the income of nurses, police officers and shift workers comes from overtime or other bonuses. Loans are available from lenders that will take your full income into consideration.
- Temp / Agency workers: These days, agencies employ a significant part of the workforce. Most banks haven’t caught up with the times and still decline anyone employed through an agency. Of course not all lenders are the same!
- Bonus income: We know which lenders will include your bonus income as part of your annual income.
- Doctor home loans: If you’re in the medical industry, you may be eligible for great discounts and a waived Lenders Mortgage Insurance (LMI).
- Discounts for professionals: Other professionals and high net worth individuals like dentists, vets, accountants, lawyers and mining engineers may also qualify for heavily reduced interest rates. You can save thousands with some lenders!
- Rental income: Are you an investor who earns income through your rental property? Make it count towards a mortgage!
- Commission income: Those working in sales roles may be paid on a commission basis. Find out which lenders will accept commission income.
We can also help in a variety of other situations and with a variety of other income types.
Please give us a call on 1300 889 743 or complete our free assessment form for more information.
Do you earn unusual income?
COVID-19 / Coronavirus update:
Many lenders are ignoring commission income and other irregular income or are using 60% – 80% of this income in their assessment as it is less stable than base income during this crisis.
There are still several lenders that can assist as long as your income can be proven. Please call us at 1300 889 743 or enquire online for more information.
Non-traditional or irregular income goes hand-in-hand with unusual employment depending on the industry that you work in.
This is particularly true of government jobs or sales professionals where you may receive bonus income or incentives.
We know banks that will consider the following types of bonuses or incentives when assessing your income.
The more the bank considers, the greater your borrowing power:
- Annuity income
- Bonus income
- Commission income
- Company car
- Salary sacrifice or packaged salary
- Stipend income
Why do banks care about my employment?
People commonly ask us why their employment situation matters.
If the banks have the house as security, surely this is enough to protect against any loss they incur.
What most people don’t know is that selling property is a last resort.
Most banks don’t want to ruin their reputation by engaging in irresponsible lending practices and lending to those who can’t fulfil their financial obligations.
Banks care about their brand (more than they do about you!) and as such, they need certainty that the loan will be repaid, and this is evidenced through the documentation you provide them with, in terms of your income and employment.
What do I need to provide?
Australian lenders need to have documents evidencing the income that you have put on the application form.
They meet this requirement by asking for:
- Group certificates
- A Letter from your employer or
- Bank statements
If you feel that you may not have sufficient documentation to apply for a loan, please call us on 1300 889 743 or complete our free assessment form today. Our mortgage brokers will assist you in getting approval.
How do banks assess your employment?
When you submit a home loan application, the bank will give your loan a credit score based on the overall risk that you pose.
Your employment and income stability forms a major part of this score.
Here’s what they take into account:
- The length of time in your current job.
- The length of time in your industry (study is included).
- The tendency of people in your industry to default on loans (e.g. doctors are a low risk while builders are a high risk).
- Your employment status (full time, part time, casual, contract etc).
- The stability of your income (casual, overtime, bonuses, commission etc).
- Your reliance on any unstable income.
In addition to the above list, there are some other more complex factors that are specific to each lender.
We recommend that you complete our free assessment form or call us on 1300 889 743 to discuss your employment situation if you believe you may have trouble getting a loan based on your employment.
Job stability is important!
You may be earning high amounts but your employment situation may be subject to change.
If this sounds like you, the banks may be hesitant to lend.
This is because banks need to be able to determine where your income is coming from.
If your employment is full-time, banks know that your income source is secure so they are more likely to lend to you.
There’s a big risk in lending to people who can’t support a loan especially if you’re borrowing over 80% of the purchase price.
We know which banks will approve you based on your current employment situation.
Please complete our free assessment form or call us on 1300 889 743 and we can help you get approval!
How do banks calculate your income
One of the major problems faced by people who have an unusual employment situation is how the banks work out their income when it fluctuates on a weekly basis.
As a general rule, banks will use the most conservative method of assessing your income.
For example, if you provided two recent payslips and your group certificate and they show two different incomes then they will use the lower of the two.
Unfortunately, this means they often don’t use your actual income!
In particular, people who receive overtime income, work on a casual basis or who have received a pay rise in the last year tend to be assessed at a lower income than they are actually earning.
How can we help?
Our mortgage brokers are experts in the banks’ employment policies and in the methods they use to assess your income.
We can select the lender that is best suited to you and then present the right documents to that lender to get approval.
Best of all we usually deal with the major lenders and so you don’t have to pay a higher interest rate!
Speak to us today on 1300 889 743 or complete our free assessment form and let us help you apply for a home loan!