How to get a home loan as a casual worker
Many Australians work in industries such as hospitality where it’s normal to be casually employed.
Of course the credit departments of banks are full of full-time employees, so what do they know about being casual? Not much! And it shows in their lending guidelines.
Read on to find out how the banks think and how to show them that your loan application should be given the stamp of approval!
Do you qualify for a home loan?
Most lenders require a casual employee to be in their job for at least 12 months. We have access to banks that understand the modern workforce and will accept other situations:
- Irregular hours: You must have been in your casual job for at least 6 months to qualify with most lenders, however, 3 months is acceptable on a case by case basis to a select few lenders.
- Max loan size: You can borrow up to 95% of the property value or more if you have a guarantor.
Do you need help to get approved? Please call our expert mortgage brokers on 1300 889 743 or enquire online and we’ll call you to discuss your options.
How can you get approval?
If you’re a casual worker, it may be difficult for you to obtain a mortgage based on your current employment situation.
To the banks, a casual employee is someone with a fluctuating income. If your income fluctuates, how can the bank be sure that you’ll make your next mortgage repayment?
Lenders also tend to think that if your employer was to lay off staff, that as a casual employee, you’d be the first to go!
Of course that isn’t always the case, this is just how a credit assessor sees it. It’s our job to make them see the truth, not the guidelines, and get your loan approved.
We work with lenders who understand that many Australians are now casually employed, and consequently we’re often able to get your loan approved when other brokers and lenders have failed.
Fill in our free assessment form or call us on 1300 889 743 to speak with a specialist mortgage broker.
How much can you borrow?
Generally, casual workers can borrow up to 90% of the property value under standard policy.
Of course, if you’re in a strong financial position and have been in your job for 6 to 12 months, we may be able to help you get a 95% home loan on a case by case basis.
And as we’ve mentioned above, you can borrow up to 105% of the property value if you have a guarantor.
That covers how much of the property value you can borrow, now to get an estimate of your borrowing power based on your income, please use our borrowing power calculator.
What if I’ve recently switched to casual employment?
Lenders like to see that you have a track record of employment in the same line of work.
If you’ve recently switched to being casually employed or changed jobs, you can still qualify provided you’ve been in the same industry and/or employment role offering a similar product/service or similar work for at least six months.
That is to say, you must be switching to a company that offers a similar product or service (e.g. Target and Woolworths), or the type of role you have is similar (e.g. IT Analyst at an IT firm and IT Analyst at Target).
Please note that this does not apply to seasonal workers where income is received over a season only and not across a full year.
Talk to a mortgage broker!
Unlike other brokers, we’re specialists in lending to casual employees and so can quickly work out which lender is the most suitable for your situation.
Complete our free assessment form or call us on 1300 889 743 to speak to a casual employment loan specialist.
Although a lender may be able to give you approval, you should still only apply for a loan if you truly believe that your employment is stable. Casual employment is subject to more instability so please borrow with care.
Who is this loan for?
All casual employees are accepted, including:
- Normal casual employees with fluctuating hours.
- Permanent casuals.
- Casual teachers.
- Casual nurses.
- People with multiple casual jobs.
You must have been in your job for at least 3 months or have a track record of employment in the same line of work or in the same industry.
Are you a casual teacher?
If you’re a teacher who’s employed on a casual basis, then you may have trouble proving your income to a bank. This is because:
- You may work only 40 weeks per year.
- You may work for several schools, yet have all of your pay come from the Department of Education.
- The Year To Date (YTD) figure on your payslips may not be a true indication of your income due to recent holidays.
- During school holidays you may not have an income at all and so providing your payslips will not prove your income.
Some of our banks can assess your true income based on either your group certificate or your weekly income multiplied by 46 or 48.
Please call us on 1300 889 73 or complete our free assessment form and one of our specialist mortgage brokers will help you to get approved.
How do lenders calculate my income?
Each lender has their own method of calculating the income of loan applicants that have a casual job.
Most lenders want to see your last two years group certificates and then they use the lower of the two. Because of this method of assessment, they’re unable to lend to casual employees that haven’t been in their job for several years.
Other lenders use the Year To Date (YTD) gross income shown on your payslip to calculate your annual income. This method is used by lenders that accept casual employees who have only been in their job for a few months.
Use our Year To Date Income Calculator to work out your assessable income.
Lenders use these methods because your income may fluctuate from week to week. If they just use the income that you’ve received in your last few payslips then their assessment will be inaccurate.
Which lenders can help?
There are major lenders who can consider your home loan application while casually employed but the outcome depends on the specifics of your situation.
Non conforming and non-bank lenders may also be able to help with your finance application. Some of our lenders can accept people who’ve been casually employed for as little as 3 months!
Complete our free assessment form or call us on 1300 889 743 to speak with a specialist mortgage broker who knows which lenders can approve your home loan while you’re casually employed.
Which loan types are available?
All loan types are available for casual employment home loans:
- Professional packages
- Basic loans
- Lines of credit
- Fixed rates
What can I use the loan for?
This loan can be used for a variety of purposes:
- Home / domestic use
What are the loan features?
All loan features are possible here:
- Interest only
- Fixed rate
- Line of credit
- 100% offset
- Extra repayments
Can I get any discounts?
For this type of loan, we can get you professional package and basic loan discounts.
Who should not apply?
Self employed and low doc borrowers can’t apply for a casual employment home loan.