Being casually employed can be a barrier for those wishing to purchase a home. Many lenders are unwilling to provide loans to those on a fluctuating income as they are perceived as a risk, however with some planning it is possible to break into the home loan market even if you are casually employed.
What type of loan can I apply for?
Casual workers are able to apply for many of the same home-loan products as those in steady employment; however approval will depend on the borrowing criteria of the specific lender. Some lenders view those with a fluctuating income a risk and as such are not willing to provide loans, while other lenders have a more flexible view and are willing to provide loans to those with stable employment history but are casually employed.
How much can I borrow?
You may be able to borrow up to 90% of the value of the property you are purchasing, and depending on your employment history, some lenders will let you borrow up to 95% of the property value.
How will my loan application be assessed?
You will be required to prove that you are working steadily by providing evidence of income and previous earnings. Evidence required could include group certificates for the last two years, or some lenders use the Year to Date gross income shown on your payslip to calculate your annual income.
While most lenders will require you to be working at your current position for a minimum of 12 months, other lenders are more flexible and will accept three months at your current job.
Applying for the loan
Get organised
Before applying for the loan, make sure you have your documentation in order. Group Certificates for the last 2 years and/or payslips from your current employer. The more evidence of income you can provide the better.
Do your research
Research several mortgage products and choose one that fits your needs. Be aware of interest rates and the difference between fixed and variable rates.
Be mindful of fees
Low-doc loans for casual workers often come with additional fees and costs. Be mindful of any fees and charges, and if you don’t know what they are for – ask.
Seek professional advice
A Mortgage broker has access to a wide range of lenders and home loan products, giving them the ability to match you with the mortgage product that will fit your needs. Mortgage brokers earn commissions from the lender, meaning their service is essentially for free.
If you are casually employed and wanting to purchase a home – talk to us at Hunter Lending Solutions. As professional mortgage brokers, our role is to work with you to find a home loan which will match your income, goals, budget and lifestyle.