Some of the highest-paid people in Australia are commission-only salespeople! Despite this, it can be difficult to get home loan approval because most banks won’t use your full income.
This is where our access to a broad range of lenders and knowledge of lender policy can help you secure the loan you’re after.
What is commission income?
Commission remuneration is a type of income received from your employer for services rendered or products sold.
It’s based on your sales results rather than the number of hours you’ve worked.
Many salesmen and women receive part of their pay as a base salary and then commission in addition to this.
Who is this loan for?
This loan is for commission-based employees who have a regular and consistent flow of commission income which can be supported by evidence such as payslips and confirmed by their employer.
Will the bank accept all of my commissions?
Some lenders will only use 50% of your commission income but others will use 100% of your commissions.
It all comes down to your work history and how long you’ve been earning commission income.
- You can borrow up to 95% of the property value or up to 100% using a guarantor.
- 6 months in your job:Some of our lenders will use 100% of your overtime income if it is consistent.
- 3 months in your job:One of our lenders will use 100% of your commission income.
Most lenders using 100% of your commission income require you to be employed for 2 years in your job.
What do lenders think?
Australia has many successful commission income salesmen who have trouble applying for a home loan because their bank won’t consider their income when assessing serviceability or their ability to make the repayments without hardship.
Banks are cautious of relying on commission income because commission income is not guaranteed and can fluctuate.
Some months, your income can skyrocket, but your turnaround may reduce significantly for seasonal reasons in other months.
Other times, it could simply be because you took a holiday!
Lenders are more comfortable with those who earn a regular monthly salary.
However, some lenders may still allow you to borrow.
Call us on 1300 889 743 or fill in our free assessment form to speak to one of our expert mortgage brokers who can assist you in getting a mortgage.
Commission income is reliable!
In our experience, salespeople tend to have very stable incomes and can support a loan without posing a higher risk to themselves or the lender.
This is because of a few factors that many lenders don’t take into account, such as:
- You can always work harder to earn more money.
- Nothing motivates you to succeed more than the need to meet financial commitments, such as a mortgage.
- Salesmen cost a company very little to keep employed in comparison to salaried employees, so they’re less likely to be made redundant during economic downturns.
- You know how stable your income is and you wouldn’t apply for a loan unless you were confident that you can meet the repayments.
Unlike most banks, we understand that commission remuneration is a viable source of income.
Contact us today on 1300 889 743 or fill in our free assessment form.
Our specialist mortgage brokers know how to get you approved!
Which lenders can help?
We have relationships with several banks and lenders who would gladly take your commission income into account when assessing your mortgage for approval.
With the huge variety and number of contacts that we have there is sure to be a lender that will suit your home loan needs.
Please fill in our free assessment form or contact us on 1300 889 743 for further details.
We can help you apply for a home loan with the use of your full commission income.
How do lenders assess my commission income?
Lenders assess commission income in different ways and require different forms of supporting documents as evidence.
Most lenders want to see a two-year track record so they can be sure your income is stable.
This isn’t a fair way to assess your mortgage application because many salespeople can choose to work harder to earn more or have had their income increase as they gain more experience.
However, not all lenders take this into account.
Complete our free assessment form to find out how you can make your commission income count or contact us today on 1300 889 743 to discuss your situation with a specialist mortgage broker.
What do I need to provide?
Most lenders require your two most recent payslips.
This must show your Year To Date (YTD) income which the bank can then extrapolate to calculate your annual income.
Your YTD income must cover at least 3 months to be acceptable on its own.
If your payslip does not show a year to date income then you may have to provide additional documents such as:
- Your most recent group certificate or tax return.
- A letter from your employer.
- Other evidence of your sales targets and sales results covering no less than 3 months.
However, most lenders are’t so flexible and may require the following:
- Two years tax returns and notices of assessment (the lender will average the two years income).
- A letter from your employer confirming that you receive regular commission income.
If you think that you may have difficulty providing this documentation, there is no need to worry!
We know lenders that can approve your home loan with as little as 3 months evidence of your commission income!
Speak to our team today on 1300 889 743 or fill in our free assessment form.
Commission Income Home Loan FAQs
Who earns a commission as part of their income?
Many industries pay by commission, including the following but not limited to:
- Mortgage brokers
- Real estate agents
- Retail product salesman
- Car salesman
- B2B Salesman
Most people in these get paid both a base salary and a commission on any sales made. However, some earn only their commission. You may also be earning commissions in your second job.
What if I’ve changed jobs?
If you’ve switched to a new employer recently then many lenders will not accept your commission income because there isn’t enough history with your new employer.
We have access to some lenders who can consider looking at the commission received from your previous employer in the same industry, and other lenders who can consider looking at a short period of receiving a commission with your new employer.
This means we can often find a lender that can use your entire income and allow you to borrow more.
Apply for a commission income home loan now!
If you’re working a commissioned job, we can provide you with a large selection of lenders and banks that can cater to your specific and particular needs.
Fill in our free assessment form or contact us on 1300 889 743.
Our expert mortgage brokers will assist you in getting a mortgage regardless of your income source!