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Casual Employment: Transition to Full Time Hours

Discussion in 'Property Finance' started by legallyblonde, 29th Aug, 2015.

  1. legallyblonde

    legallyblonde Well-Known Member

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    Good evening,

    I have been casually employed at the same place for 2.5 years and have been working full time hours since my studies completed. I was under the impression that with my new (pretty damn decent) income levels, which include overtime I would have a fair bit of borrowing power. I do not pay rent and as such have very lower SINK living expenses. In my areas of interest I will be looking at a minimum 5% yield (really haven't decided on what I want yet though to narrow it down any further). My bank told me that basically I am stuffed for at least six months (till my 12 month average income is higher). They also do not take overtime into account when looking at my average income... Even once my income is higher, I will struggle to get LMI (at 88% LVR) because they generally assess income over two years and do not take into account over time. Apparently my only saving grace would be a permanent position in the same field (then they would be instantly able to use my new income details). I find it so bizarre that if I gained a permanent position (presumably with a pretty major pay cut) I would have more serviceability!!

    Once I figure out what I want I will obviously need to contact a broker! It is my understanding that there are banks that will touch me once I have maintained these new income levels for three months? Any thoughts on my predicament would be greatly appreciated.

    Needless to say that I am feeling pretty disheartened to discover that I do not have the borrowing capacity that I assumed would come with full time wages! On the plus side, I found out that my IP1 break fee is less than $500 so I can refinance and avoid that dirty loan contamination!
     
  2. SK Investments

    SK Investments Well-Known Member

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    You should be talking to a broker :)
    I'm sure they will all drop in to offer some advice, you've obviously been employed there long enough, it probably comes down to how long you have been on full-time hours.
     
  3. Shahin_Afarin

    Shahin_Afarin Residential and Commercial Broker Business Member

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    Who is the lender?

    Most lenders (particularly those with DUA) are going to be ok with the above scenario even in LMI territory.

    CBA does casual employment better than the others though.
     
  4. Richard Taylor

    Richard Taylor Mortgage Broker & Brisbane Buyers Agent

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    CBA are good in this sphere but many others who would look at it also.

    Just because it is in LMI territory doesn't necessarily rule you out.

    Cheers


    Richard
     
  5. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    Agree with the others- Cba are awesome with casual employment. ANZ aren't too bad either.

    Cheers

    Jamie
     
  6. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    Classic example of needing to speak to a broker :) Banks are not all created equal and have very different appetites for risk. Some want 2 yrs with employer for casual, others 3 months.

    Many lenders will look at you especially if you've been with the same employer for 2.5 years, but you'll want to use a lender with in house LMI. CBA are great but you're definitely not limited to them in your situation.
     
  7. legallyblonde

    legallyblonde Well-Known Member

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    I currently have 8 weeks worth of full time earnings as my studies completed late June. So my YTD earnings are great.

    Bank in question was Bendigo.

    Thanks for your thoughts guys. Sounds like I should give it four weeks then get myself a great broker!
     
  8. SK Investments

    SK Investments Well-Known Member

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    From experience you shouldn't have a problem with bendigo at 80% it's probably genworth that is restricting you.
     
  9. Redom

    Redom Mortgage Broker Business Member

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    The reason why banks sometimes have these situations is they prefer stability in employment. Right now more and more lenders are shaving off a percentage of uncertain income (overtime, bonuses, etc), to account for their more uncertain nature.

    In saying that, no need to be disheartened, as the lending market provides plenty of options! :) Some lenders are tighter than others. Some will require 12 months years history of casual employment in LMI space, with others 3 months will do just fine (like CBA).

    Probably best to either walk over to CBA or have a chat to a broker who'll be able to sort out a few options for you.

    I've done a very short term casual employment deals before based on contract/1st payslip/phone verification of employment, so there may be options pre 3 months too (although it will likely fall below LMI space and need a strong case).

    Cheers,
    Redom
     
  10. Hodor

    Hodor Well-Known Member

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    A good broker is the answer.
    Got my first IP when six months into a 12 month probation period. My penalties and overtime is always assessed as income with my applications, my income is low without overtime and penalties and I would struggle to get loans without it. I usually purchase at 90% and have no problems with LMI either.
     
  11. vtt

    vtt Well-Known Member

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    Why don't you ask your employer to make you permanent full time? Your hourly rate will likely decrease but you'll have stable, guaranteed hours which makes banks happy

    vtt
     
  12. legallyblonde

    legallyblonde Well-Known Member

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    I am keeping myself busy applying for permanent positions at the moment which will likely involve a pay cut, but nothing major or problematic. =) Apply for open positions is the only way to secure an in house permanent position. My team leader is great. I had a chat to him today to bounce some ideas off him. Just figuring out which positions are potentially suitable ect.