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Do I need full time employment to get a home loan?

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It is a common misconception that only full-time employees can be approved for home loans and while some traditional lenders may be cautious to lend to borrowers in part-time or casual employment, there is no reason to write yourself off simply because you don’t work full time.

Here’s what to do if you are a part-time or casual worker seeking a home loan.

Gather your proof of employment

The longer you have been employed in your part-time or casual role the more convinced a lender will be that your job is secure. Dig up a copy of your employment contract, payslips, and proof of your salary being paid to your bank account. You should have at least six months’ worth of payslips for a lender to consider your application as a part-time or casual employee viable, however, some lenders will accept as few as three months’ worth of proof of employment in your current part-time role.

The key word a lender will be looking for is ‘permanent’, so if this is not on any of your payslips or your contract, ask your employer to provide you with a letter that specifies that your employment is indeed permanent.

Save a large deposit

It’s easier said than done but saving a large deposit will put you in better stead to be approved for a loan if you are a part-time or casual employee. The less risk that the lender has to bear, the more willing they will be to lend you the remainder of what you need to make your home purchase. Anything more than 20% would be considered a sizeable loan, and anything under 20% may make it more difficult for a part-timer or casual worker to be approved, depending on their personal situation.

Have a guarantor

If a family member is willing to guarantee your loan most lenders will be more amenable to approving your application despite the fact you work part-time or casual hours. This is because if your hours are reduced further and you are not able to make your loan repayment, they will feel assured that the guarantor can make the payment on your behalf. A guarantor can usually be removed from your mortgage once you have paid down a certain amount of the loan.

Try to increase your hours

If you have time on your hands and won’t be applying for a loan for at least six months, you may increase your chances of being approved if you are able to change your employment status from part to full-time. This is not something you can chop and change on a whim, though, as the lender will want to see that you have consistently been working full-time hours for a number of months, not just for a week or month here and there.

Seek the help of a mortgage broker

Trying to find a lender who will work with a part-time or casual employee can be difficult if you aren’t in the know. A mortgage broker knows the industry inside out and has an understanding of which lenders approve loans for workers on less than full-time hours. By engaging a mortgage broker, you can save time and stress as they will seek an appropriate loan by going directly to the types of lenders that understand your situation and are most aligned to your needs.

If you are a part-time or casual employee who is looking to take out a home loan, please contact our mortgage brokers on 4052 0751.

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By Lauren Eakins

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