How to make your commission earnings count!
Is the majority of your income derived from commission? Some of the highest paid people in Australia are commission only salespeople!
ommission only employees are paid a much higher rate of commission than people on a base plus commission package, and they have no ceiling on their income.
Despite this, it may be difficult to obtain a mortgage because banks are reluctant to assess their full income. However, we can help! Read on to find out more.
How much income will banks accept?
When applying for a home loan it’s important to choose a lender that will accept 100% of your commission income rather than just 50% as is common practice with many lenders.
In particular, many lenders do not accept any of your income if there is any sign of inconsistency. This can occur simply because you took a holiday or because of a normal seasonal dip in sales.
We know lenders that may accept 100% of your commission income, depending on your circumstances. Please fill in our free assessment form to talk to a mortgage broker who specialises in commission income home loans.
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 (if they can afford to make the repayments without hardship). Banks are cautious of relying on commission income because commission income is not guaranteed and can fluctuate. Of course, your income can skyrocket but, on the other hand, the income can also be zero.
Lenders are more comfortable with those who earn a regular monthly salary. However, there are lenders that 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. As a result, they are 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’re confident that you can meet the repayments.
Unlike most banks, we understand the 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 your 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 you need to provide?
Most lenders would require that you provide:
- 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 a period of 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 a period of no less than 3 months.
However, most lenders are not so lenient and may require the following:
- Two years tax returns and notices of assessment. The lender will then 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 then there is no need to worry! We know lenders that can approve your home loan with as little as three months evidence of your commission income! Speak to our team today on 1300 889 743 or fill in our free assessment form.
What is commission income?
Commission remuneration is a type of income received from your employer for services rendered or products sold. It is 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 documents such as payslips and confirmed by their employer. Some of the common commission earners include salesmen, sales agents, real estate agents, car sales, B2B sales and mortgage brokers.
Which loan types are available?
All loan types including professional packages, basic loans, lines of credit, fixed rates.
How much can I borrow?
You can borrow up to 90% of the property value, and possibly 95% if you’re in a very strong financial position and receive regular commission payments.
What can you use the loan for?
Home or domestic use, investing, purchases, refinances and construction are all acceptable loan purposes.
Professional package and basic loan discounts are available.
All loan features are available including interest only, fixed rate, line of credit, 100% offset, redraw, extra repayments.
Do you receive commission income? Apply for a home loan now!
If you are 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! Speak to us today.