Working on a contractual basis? Struggling to get a home loan approved because you don't have a steady income? These days the banks are reluctant to lend to those who do contract work, even though they are often better paid and have a higher income.
Luckily there are mortgage brokers available to help you find the best lender possible to make sure that your loan gets approved with no hassles.
Typical work contractors are those working as either PAYG contractors, self employed contractors or sub contractors.
Companies often choose to outsource workers on a contractual basis during busy periods or sometimes to temporarily replace a permanent employee who has taken leave.
- PAYG contractors are employed by agencies on either a short or long term contract.
They are similar to regular employees in that they receive normal benefits such as sick leave and superannuation.
Often companies will pay tax on the contractors behalf - Self employed contractors work for themselves and not for a company.
They deal with all the expenses of their business; pay their own wages and tax - Subcontractors are those who perform duties and obligations for a main contractor.
People in the mining industry are often under those terms of employment Those working on a contractual basis have difficulty getting home loans due to their fluctuating financial situation.
The banks see contract work much like casual work and are often hesitant to approve home loans as there is no guarantee that the contract work will continue in the long term.
Despite this fact, the right mortgage broker can help you find banks that are willing to lend to those doing PAYG contract work, even if they can't prove that their future employment will be stable.
Self employed contractors usually have to provide full financial accounts of their business before lenders will approve their home loan.
This can often be a struggle.
Luckily there are many home loan options available for the self employed.
Some banks treat the self employed like PAYG contractors.
This means that you only need to provide proof that you have been self employed for 2 years and that you have an income, profit and savings.
Sub contractors that work in the mining industry are usually on a high income.
However, the banks view them as a 'higher risk' because there is a chance that when their contract terminates it will not be renewed again.
However, brokers can ensure that your application for a home loan is presented in the best possible way so that the banks can see that it is possible for skilled sub contractors to find alternate work in their industry.
Those working on a contractual basis and wishing to get a loan for a home, investment or construction project should seek the right broker to assist in applying to the banks.
There are a variety of Low Doc loans on offer that mean that minimal paper work needs to be provided in order to secure the loan.
A broker can assist in finding a bank with the best rates that can help get your loan approved with little stress or hassle.