Child Support Home Loan
Some banks accept this type of income!
It may sound farfetched, but your child support income could be the key to rebuilding your life following an emotionally devastating divorce or separation.
How? You can use it as an additional income when applying for a mortgage to buy your own home or rental property.
We know some lenders will take into account child support you receive from your ex-partner when assessing your income for a home loan.
How do I get a home loan as a single parent?
Not all Centrelink benefits are accepted by Australian lenders but we know a few that will accept child maintenance support income.
On top of that, we know a few that will accept 100% of these support payments to supplement your income so you can borrow the amount you need to buy a property.
In order to qualify for a child support home loan you must meet these criteria:
- The child support payments that you receive must be via the Child Support Agency (CSA) which is part of the Department of Human Services.
- The payments must be court-ordered.
- You must have been receiving the support income for at least the last six months.
In order to prove that the child support income is legitimate, the lender may ask you to provide the following:
- A copy of the Family Law Court Order.
- Bank statements showing credits to your account.
- A letter from your solicitor.
- A letter from the Child Support Agency (CSA).
Give us a call us on 1300 889 743 or complete our free assessment form to find out if you qualify for a child support home loan.
What if the child support isn't court-ordered?
Sometimes parents may enter into an agreement regarding the payment of child maintenance income to the acting parent.
These can take the form of a:
- Limited child support agreement: Essentially, parents can decide on the level support (but not less than CSA’s child support assessment) and how the payments are to be delivered.
- Binding child support agreement: A binding agreement that can be made between each parent even if a child support assessment hasn’t been made. A binding agreement can only be ended by a new binding agreement or by a court.
You may agree to the payment of both cash and non-cash support such as health insurance or school fees.
Although these agreements are “formal” in that they must be CSA-certified, lenders will only accept court-stamped child support.
How much can I borrow?
We know lenders that will accept 100% of your child support income, which can be used to supplement existing income that you earn.
Will my LVR be limited?
Just because you receive child support income it doesn’t mean the banks will limit how much you can borrow.
To work out how much you can borrow:
- Look at your most recent CSA statement and work out your fortnightly income.
- Multiply this by 26 to find your annual tax-free income.
- Look at your payslips and calculate your annual taxable income.
- Use our ‘How much can I borrow?‘ calculator to work out how much you can afford.
Do you need to have a job?
Lenders won’t accept child support as your sole source of income for a home loan but some of them will accept to 100% of the child support payments you receive as supplementary income.
Because of this, you will need another source of income in the form of either a full-time or part-time job.
What if my partner is working instead?
You can apply for a child support home loan with your partner and as long as they’re on the loan application, the bank will accept their salary and your benefits will be included as a tax-free secondary income.