Casual Employment Home Loan

Home loans on casual employment

✅It is quite normal to be casually employed in the retail, teaching, nursing, or hospitality sector. Many lenders view casual employment as higher risk, and some avoid lending to this group altogether.

✅Fortunately there are lenders who will consider a home loan for the casual worker. There are a few considerations to assess this properly.

Let's take a look

✅Full time casual: must be employed 6 months to qualify with some lenders.

✅Part time casual: irregular hours are assessed on a case-by-case basis.

How will the banks assess me?

✅Your income is more vulnerable without holidays & sick days.

✅Your irregular pay checks will be scrutinised.

✅When the economy or certain industry's go through tough times, some banks pull back from lending to casuals on the basis they might be the first to get fired.

Casual teacher

All your payslips are from the department of education (1 employer), but you may be sent to many different schools. Some banks won't like the transitory nature of the work. Some lenders do not mind - they deem you to work for the department of education and do not inquire further than that..

As a casual, you won't get paid for school holidays. So that's a maximum of 40 weeks a year. But you also get more money per day than a permanent.

School holidays may skew your year-to-date income on your payslips. Some lenders won't take that into consideration. Fortunately, some lenders will calculate your real income off your PAYG group summary for the year, that is your weekly income for 40 weeks These are the lenders you should target.

How is my casual income assessed?

It will differ from lender to lender. You must learn the expectations of each lender before making your application, or leave it to your broker. Some may want 2 PAYG group summary's, while others will use the Year-to-Date gross income from your weekly payslip to work out your annual income.

Proof of income?

A payslip showing at least 3 months Year-To-Date income & 3 months salary credits to your bank account.

or

A Letter from employer showing the dates you worked there, a break down of year-to-date income and a PAYG payment summary if your employment was a mish-mash of various jobs. Clearly this is the harder of the two to get approved.

✅It is best to give as much detail as possible to present your case in its best light. Banks can be quite delicate when it comes to risk, or looking at applications that are not "cookie cutter." Once again, your broker will have a better chance at getting this across the line.

Working example

Vula was working as a casual at a supermarket in Bankstown. This work consisted of irregular hours of night shift and weekends. She had been there 3 years. Her PAYG summary's show an income of $57,000, $61,000, $63,000 for the last three years. Vula's hours fluctuated week to week. Vula's husband is also a casual, a teacher, for the last two years. They wanted to bid on a duplex in Greenacre and wanted to know if any lenders would consider them.

Can Vula qualify for a loan?

✅Yes, both of them applying together for a home loan have a good chance of approval. They both had been in their jobs for 3 and 2 years respectively, and while both were casual, both proved stable over the course of the year, if assessed as PAYG yearly summary.

The documents they need are:

Last 3 months transaction account statements where they get paid.

3 most recent payslips.

Last 3 PAYG summaries for Vula and 2 PAYG summaries for her husband.

Banking policy changes regularly. A good broker will know which lenders are risk averse and which ones will assess the risk favorably.

Matthew Stack - Mortgage Broker

0423 237 242

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