Advice on Home Loans given intermittent employment

Discussion in 'Loans & Mortgage Brokers' started by Joe Hillel, 4th Nov, 2019.

Join Australia's most dynamic and respected property investment community
  1. Joe Hillel

    Joe Hillel Member

    Joined:
    4th Nov, 2019
    Posts:
    5
    Location:
    Brunswick East
    Hi Folks!

    I'm after some advice on home loans and mortgage brokers given slightly unusual circumstances.

    I work as a Finance Systems Consultant in the legal sector in Melbourne. The companies that hire me do so as a PAYG employee, but for relatively short periods (less than three months). I've saved a significant amount, held as cash and shares, towards a deposit on my first home (most likely an apartment in Northcote).

    I've been talking with banks to secure a loan of $250,000, but one after another they've balked at my employment situation, saying that they need six months continuous employment to "verify my income". This includes my personal bank (NAB) who has some 20 years of account transaction history, and all the info necessary to see a sustained pattern of high earning, low spending and consistent saving.

    There must be plenty of other folks in my situation. With work culture changing as it is, it might even be pretty common down the road.

    So, to my question; If I talk with a mortgage broker and give them the full suite of my info, do you think they might be able to secure a loan for me where I've failed? I don't want to waste their time or mine.

    If so, is there a broker you might recommend? The market is somewhat overwhelming and hard to parse!

    Thanks in advance. :)
     
  2. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

    Joined:
    18th Jun, 2015
    Posts:
    7,283
    Location:
    03 9877 3000
    How do your 2019 & 2018 tax returns look? Moving from one short term contract to another isn't ideal because no individual job really shows what you earn, especially if there's gaps between them. A step back and looking at the bigger picture (over a longer period of time) will probably give you a more holistic overview of what you earn.

    I'd also say that you're going to need a deposit of at least 20% for this scenario, but if you're only needing to borrow $250k for an apartment in Northcote, you've probably got that covered. ;)
     
  3. Joe Hillel

    Joe Hillel Member

    Joined:
    4th Nov, 2019
    Posts:
    5
    Location:
    Brunswick East
    Tax returns look good, I think. I worked about half the year in the 2018 FY, but still made enough to put away plenty into savings. Worked solidly full time in the 2019 FY, so no problem there.

    Yep yep, understood re LVI and all that. I've always said I wouldn't buy a property until I had a good chunk (well above 20%) as a deposit. I'm in the very privileged position of being financially sensible!

    If only the banks saw it that way... :(
     
  4. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

    Joined:
    18th Jun, 2015
    Posts:
    7,283
    Location:
    03 9877 3000
    Also make sure your PAYG summaries reflect that you've had near continuous employment.

    Overall this doesn't sound that difficult. Had an approval last week where one of the applicants has a mixture of PAYG and self employed work across multiple employers. Your scenario isn't exactly the same, but it's not that hard.
     
  5. Joe Hillel

    Joe Hillel Member

    Joined:
    4th Nov, 2019
    Posts:
    5
    Location:
    Brunswick East
    Ah well, it was continuous in the 2019 FY. I had a year long contract with a single employer! That's pretty unusual, though.
     
  6. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

    Joined:
    18th Jun, 2015
    Posts:
    7,283
    Location:
    03 9877 3000
    I'm a little surprised that the NAB didn't like it then! I can think of quite a few lenders that would likely be fine with this scenario.
     
  7. Joe Hillel

    Joe Hillel Member

    Joined:
    4th Nov, 2019
    Posts:
    5
    Location:
    Brunswick East
    I know, right! I think it was a "computer says no" kind of situation; the person on the phone didn't seem very creative or flexible. Their loss, I guess...
     
  8. mikey7

    mikey7 Well-Known Member

    Joined:
    30th Mar, 2016
    Posts:
    1,159
    Location:
    Sydney, Brisbane
    Perhaps its time to engage @Peter_Tersteeg or one of the other brokers on this forum.
    It sounds like they will be able to do what you want.
     
  9. Air_Bender

    Air_Bender Well-Known Member

    Joined:
    9th Jan, 2016
    Posts:
    691
    Location:
    Melbourne
    I second @mikey7's suggestion above and would also add that it's probably best you stop shopping around at this point. From what you posted I'm assuming you've already made a number of applications at different institutions. Your credit file will take a hit for every single application you make and could potentially have a negative impact on all future applications you make. It's time to engage a good broker and let them do all the leg work for you.

    Good luck.
     
  10. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    8,284
    Location:
    Gold Coast
    Pete be da $ man for your wealth creation

    ta
    rolf
     
  11. Joe Hillel

    Joe Hillel Member

    Joined:
    4th Nov, 2019
    Posts:
    5
    Location:
    Brunswick East
    Thanks folks for your advice and suggestions! Very interesting what you say about my credit file, I hadn't even thought about it. It's a shame they don't teach you these things in school... o_O

    Anyways, I've got on to a broker (someone recommended by a friend); they echoed a lot of what you've said and put me on the right track, so all good.

    Thanks again! Happy for mods to close this thread.