Finance on Fixed Term Contracts

Hello,
A few questions for the brokers

If an employee has a fixed term full time contract how does this getting affect finance?

How long does the contact need to have left to run before people start having issues?

This person has been with the employer over a year and had the contract previously renewed.

Cheers

 

Under these circumstances, it's not a problem at all. This employment arrangement is becoming quite common. As long as there's been consistent employment in the same field, there's plenty of lenders that are fine with it.

 

Most lenders this is OK.

Some of the aggressive smaller lenders with strong borrowing capacities need long work histories here, e.g. Liberty and Pepper like to see 2 rolling contracts with time on it to spare for prime rates. The one year history in this case will make it OK with these lenders too, if necessary.

 

Quite common these days.

History in the same industry is what most lenders will look at.

Cheers

Jamie

 

Hi,

Just to expand a little on the original question for my own benefit, is it much of an issue for a fixed term contractor to arrange finance for multiple positive cash flow properties?

To put this question in context, I worked fro the same company for 26 years before taking a voluntary redundancy package and am now back working for that company on a fixed term contract, initially starting in three month contracts with the expectation to move into 12 month contracts in the foreseeable future.

I'm fairly new to real estate investment and having read a number of books including 0 to 135 properties I would like to try that approach when conditions become a bit more favorable. I have plenty of cash and own my own home, I just a little doubtful with respect to the employment situation.

Thanks

 

There are contracts and contracts. The original posters responses were aimed at payg contractors. That is a normal full time position that was defined for a set period. Super, tax, sick and holiday leave all paid by the employer. Essentially banks treat these the same as a 'normal' employee.

The other type of contract is for a self employed contractor usually paid by invoice thru an abn. These sort of contractors are harder to place as most lenders will want 2 years tax returns, they are viewed as self employed.

Do you get a payslip? All good especially as your previous role was with the same employer.

Ps Steve McKnight was one of my first investment authors. Got a lot out of his work, I was in Ballarat at the time, but I don't wear trackydaks.

 

Thanks Tobe, yes I get a payslip.

 

That'll be fine then - not something every lender will take, but there's plenty of mainstream options which you can use.