Will Your Job Stop You Getting A Home Loan?
When a lender is assessing your home loan application, they will pay particular attention to your employment history. Just earning good money isn’t enough – the lender wants to see a sense of security. Your job can even affect your credit score, as lenders may consider that your employment increases the overall risk of not repaying the loan.
You might consider your job to be secure, but a lender will assess the situation differently. Here are some examples of work situations that could negatively impact your ability to secure a home loan.
You’ve been head-hunted by another company, and now you are in a senior position, earning more money than ever before. Yet this is actually not a good time to rush out and apply for a home loan. The lender will see that you have only just started in this new job, which indicates a certain level of risk. Wait for at least six months to demonstrate a steady pattern of employment before applying for a loan.
Casual/ Contract/ Temp workers
If you work through an agency and do not answer directly to an employer, many banks and lenders will consider you high risk, particularly if you are borrowing more than 80% of the purchase price. However, as the workplace is changing and more people are taking on flexible working hours, some lenders are recognizing that contractors, casual staff and even temp workers can rely on a steady income. A mortgage broker can help you identify the lenders who would be most likely to offer you a loan. You can also boost your chances of securing a loan by building on your deposit.
Low base salary
If you rely on overtime, bonuses or commission, some lenders will only look at your base salary and decide that your income is too low for you to be considered for a loan. Others do not want to rely on unstable income to pay off the debt. However, other lenders will take your additional bonus income into account when assessing how you can manage loan repayments. Talk to a mortgage broker about a loan that enables you to make additional repayments when your salary is higher than usual.
Sometimes it’s your workmates who let you down. Some industries are marked “high risk” due to the number of people in that industry who default on loans. A mortgage broker can help you find lenders who look more favourably upon your industry, so you can be approved for a loan.
Get Expert Assistance
You don’t need to endure being consistently turned down for a loan, and you don’t need to give up on your property ambitions. A mortgage broker has the inside knowledge to help you identify the lenders who are receptive to your employment circumstances. Talk to the mortgage broker about your financial history and the amount of your deposit in relation to the type of property you wish to buy, and they will be able to find a loan package that suits your circumstances from a lender who sees you as a good risk.