Workers Comp Home Loan
Have you been put on worker’s comp after an injury at work? No doubt you are going through a difficult time, but what you don’t need is to have your bank decline your home loan!
Unfortunately this is the situation facing many people who are being paid a compensation payment and who are unable to work.
Thankfully not every lender has such a black and white approach to income from a compensation claim. Read on to find out how to get approved for your mortgage.
What is the approval criteria?
The vast majority of lenders will not approve a loan for someone on worker’s compensation. We have some lenders that can help if you meet their qualifying criteria:
If your worker’s comp income is permanent
We can get you a loan with a major lender for up to 90% of the property value.
If your worker’s comp is ongoing for the next 5 years
We can help you to borrow up to 80% of the property value with a specialist lender at a slightly higher interest rate.
If you are returning to work in less than 2 months
You can borrow up to 90% of the property value through a major lender. You must provide a letter from your employer confirming the date you will return to work, confirming the terms of employment and your income. The lender will not advance the funds until you have returned to work.
If your worker’s comp is ongoing until you are able to work
If you are recovering and expect to be able to return to work then you can borrow up to 80% of the property value.
You must provide a letter from your employer confirming that your job is still available, confirming the terms of employment and your income.
If your income is not ongoing
If you are not returning to work and your worker’s compensation payments are not set to continue then we cannot assist you with a home loan.
As a general rule if you cannot prove that your income is ongoing then you cannot get a home loan. Your income can be either from your job or from worker’s compensation payments, however you must prove that you will still be able to make the repayments in the foreseeable future.
What evidence do I need to provide?
Our lenders may ask you to provide the following documents to support your application:
- A letter from your employer confirming that your job is still open (if applicable).
- A letter from the worker’s compensation insurer or scheme agent to confirm the payments being made to you, the term over which they will be received and the conditions regarding your return to work.
- Doctor’s certificates (if applicable)
- Evidence of your income prior to the injury (payslips, group certificates etc).
Please provide our mortgage brokers with as many documents as you can, we can then work out the most suitable lender and only provide the documents that add strength to your application.
If you believe that you may have difficulty supplying all documents, please enquire online or contact us on 1300 889 743 to speak to our mortgage brokers who can assist you with your application.
What if my claim is in dispute?
Unfortunately many worker’s comp claims are challenged by the insurer or their liability is denied. If you cannot provide evidence of ongoing payments then we cannot help you with a home loan.
What if my credit history isn't perfect?
We regularly see people who have had a dispute and as a result were without their income for some time. If your income has been denied, then it is probable that you have missed repayments on your current loans and this may result in a default, tainting your credit history.
However, we can still assist you with a home loan as long as you can prove that your income is ongoing.
To find out how you can get approval for a mortgage, contact us on 1300 889 743 or enquire online and let us help you apply.
Can I get a loan if I have defaults?
Even if you have defaults on your credit history, we can still get a specialist lender to consider your application, however you will have to pay a higher interest rate and you cannot borrow more than 80% of the value of your property.
If you are serious about getting a home loan, then talk to one of our mortgage brokers who specialises in helping people who are on worker’s comp. Simply enquire online or give us a call on 1300 889 743 to discuss your situation.
Why don't banks accept worker's comp income?
The major banks will not accept income from worker’s compensation because they believe the income may not be ongoing.
In many cases worker’s comp is only paid as the result of a complaint or a legal dispute. Because of this, the worker may be unable to return to their job for reasons other than their health.
It is probable that their income flow will cease and they will not be able to meet all of their financial obligations.
As a result, banks see your income as irregular or less likely to continue. Consequently, banks choose to ignore this income when assessing your ability to repay a loan.
Even with a formal commitment from an insurer they are still unable to accept this income!
How do I get approval?
In order to obtain a great loan package, you need to apply with a lender that takes a common sense approach to your income. Otherwise, your loan will almost certainly be declined!
The best thing to do is to contact one of our mortgage brokers who know the lending criteria and can help you get approval!
To speak to someone about getting a loan using income from workers compensation, please enquire online or call us on 1300 889 743 and talk to one of our expert mortgage brokers who can help you get approved!
What is worker's compensation?
Workers compensation, or it’s abbreviated term, ‘worker’s comp’, is a form of payment given from the employer to employee in the event that the employee is injured during the course of his or her work. However, payments of this nature are generally based on conditions that the employee not sue their employer in negligence, for damages.
Depending on the type of injury that occurs, you may also be paid a lump some if you suffer from a permanent impairment.
The payout is generally used to cover medical bills and wages that the employee would normally be entitled to if they were fit to work.
Industries with regular claims
Depending on the type of industry you are in, you may or may not have a workers compensation policy.
Whilst injury can happen in any workplace, there are some where accidents may be more foreseeable, due to the nature of the work.
- Roof Tiling
- Electrical Industries
However, there are many cases where individuals work in other industries and are injured on the job. As such, you may be covered. Check with your employer to find out what scheme is in place if you get injured on the job.
Apply for a home loan today!
Do you need help with your mortgage? Enquire online and one of our mortgage brokers who specialises in worker’s comp home loans will give you a call us on 1300 889 743 to discuss your options.
We can quickly work out if you are eligible for a home loan and help you to get approved!