Since the Covid Pandemic an increasing number of people are choosing flexible working opportunities to successfully combine both their lifestyle and their income commitments.

However, many home loan applicants have found that their bank is apprehensive towards them and it is because of their irregular working hours. They don’t seem to fit into the strict lending guidelines set out by banks and they are not seen by banks as holding down a stable employment with regular income.

A Non Conforming Lender will be familiar with the lending guidelines and credit policy requirements of a number of non bank lenders/credit providers who will accept Unusual Employment and Income with a Near Prime Loan.

What are the Common Unusual Employment and Income Types?

Below are some of the common unusual employment and income types:

PAYG (pay-as- you- go) contractors

Casual workers or Second Job

Part-time workers or on Probation

Self-employed individuals

Sub-contractors

People with other forms of income

Type 1 – PAYG Contractors

PAYG contractors are employed via an agency or directly via their employer. This form of employment is now common in a variety of fields such as:

Medical

Teaching

Engineering

IT (Information Technology)

Mining

Project Management

Construction

Government

If you are a PAYG contractor and you are looking for a home loan here is a list of things that lenders/credit providers will require you to provide:

You will be required to provide a copy of your most recent “Employment Contract”, with income details listed and you will need to provide evidence that you have had employment in the same industry and that you have a good track record in your chosen industry.

You will need to provide evidence that your employer or employment agency takes care of your income tax and superannuation contributions for you and show copies of latest pay slips.

Note: If you are not on the direct payroll of an employer or employment agency, you may be treated as being self-employed.

Type 2 – Casual Workers or Second Job

This type of employment applies to people working on a casual basis in the following industries:

Restaurants

Retail

Teaching and Tutoring

Nursing

Childcare

Trades

Drivers

Cleaners

If you are a casual employee, you will generally need to provide evidence that you have been employed at the same place or industry.

Type 3 – Part-Time Employees or on Probation

If you are employed on a part-time basis or on Probation you will find that non bank lenders/credit providers will generally require you to:

Provide evidence that you have been employed at your current employment for at least 6 months

Provide copies of a computerised pay-slip covering a minimum of two (2) pay cycles in order to confirm details of your base income and a signed letter of employment from your employer listing details of your current base-remuneration.

Type 4 – Self-Employed Individuals

You are categorised as self-employed individual when you are paid through your ABN even when you are conducting freelance work as a journalist, photographer, tour guide, etc. In such a situation, you will find that most Banks will require you to provide evidence that you have a regular income to sustain a loan. This includes providing evidence that you are a business owner or partner and you have been trading in your current business for at least 24 months.

For a Prime Bank Loan you will be required to provide copies of your most recent Personal and Business Income Tax Returns and business financial statements, reflecting two (2) years trading activity.

For a Non Prime Bank Loan you have a Low Doc Home Loan option for Self Employed Australians where you can supply a declaration of income with either:

Accountants Declaration of income

6 months of lodged BAS statements

6 months of Business Bank statements

Note: If you conduct freelance work with an employer, you may find that lenders/credit providers may require you to provide a copy of the written agreement between you and the employer that outlines your pay and conditions.

Type 5 – Sub-Contractors

Sub-contractors have specialized skills and they are generally employed by a primary contractor to provide specialized services in a variety of fields such as:

Building and Construction

Mining

Civil Engineering

IT (Information Technology).

Note: Many sub-contractors have little to no overheads and no staff and most are typically self-employed. In a sense they are similar to PAYG contractors.

Type 6 – Other Forms of Income

If you receive other forms of income and you are unsure if it is acceptable you should seek help from a Specialist Mortgage Broker. These other forms of income can include:

Centrelink payments and Pensions

Commissions and Bonuses income

Trust Distributions income

Car /Shift and other Allowances

Annuity Income from Superannuation

Director’s fees

Second Job income

Investment income (i.e. Dividends received from publicly listed companies)

Child Support Court Ordered Maintenance payments

Salary Sacrifice

Foster Care Income

Superannuation Income (Pension or Annuities)

Trust Distributions

Oversease Income

Maternity Leave

Seek Expert and Professional Advice

If you still have doubts regarding your employment status and want to obtain a Home Loan you can seek help of an experienced mortgage broker or Non Conforming Lender because they will have experience of dealing with many non bank lenders/credit providers on a regular daily basis.