Applying for Mortgage with New Job

Hi Ozbargain

My partner and I are building a house. We are currently waiting on the land to be registered.

We intend to apply for pre-approval in July/August with the mortgage starting around October when the land is released.

My partner is getting a new job/contract, he's just waiting on a clearance. There is a chance he won't start until March/April.

Has anyone had success getting pre-approval being in a job/contract for less than 6 months? He will be working in the same industry as he has currently been working for the last 8 years.

We have spoken to a broker, we are borrowing about 600K, our serviceability is 1.3million. Combined income is 270K.

Broker said it may just limit our options but just wanted to hear some others experiences.

Thank you

Comments

  •  

    Is the position a contractor or permanent employee?

    •  

      it's a 12 month contract with 2x 12 month extensions written in to it

  • +2 votes

    Assuming you make 50% of that combined income which is pretty high and are FT I can't see how you guys won't be able to service a 600k loan even with just one person, should be okay?

    •  

      Unfortunately I don't make 50% of that, so I don't think we could service it on just my income.

  •  

    I had an employee once who was in the same boat. Great income for serviceability of the loan, but he was only with us for 2 months or so. He asked if i could write a letter to formalise our intention to make him a permanent role post probation period (nominally 6mo) and this would have satisfied the bank (Bankwest, in this case).
    I was willing to do it but company policiy didnt allow it so we couldnt.
    He had to go to another bank which was OK with the lesser tenure of employment or something. Anyway he got alternative finance.
    Maybe your husbands new employer will be willing to do something similar ie state in writing the intention to make him permanent or maintain his contract or equivalent.

    •  

      So did this just restrict his options? Not rule it out completely? We don't mind if the interest rate has to be slightly higher or something for the first few years until we can refinance.

      • +3 votes

        Go back to your broker and tell them to find a bank that will be ok with your situation. That's their job.

  • +2 votes

    The problem isn't how long he's been working there, it's that it's not a permanent job.

  • +1 vote

    Hi OP

    Broker here, you'll be fine. There's a few banks who won't mind his short tenure. Assuming everything else is all good, you shouldn't have any issues. Yes it rules some lenders out but still some good options for a broker to tell you about.

    •  

      Thank you for the reply! We don't mind if we have to take a higher interest rate (it's obviously not stretching us financially), just wanted to make sure there definitely will be options for us. Thanks again!

  •  

    I have applied for home loans for the past 3 years (refinancing) while working as contractor or fixed term employee. I was able to show the bank that I always had steady income even as temporary worker. That apparently was a factor in them approving my loans.

    •  

      That's great you got approved. Were you in roles for long? He has been contracting for a few years and never had a day without work, so hoping that is evidence is income is stable.

      •  

        2017: Settled an investment loan. Was 2-3 months into an 8-month contract.
        2018: Refinanced PPOR. Was 2-3 months into a 9-month contract.
        2019: Refinanced above investment loan. Was 6 months into an (ongoing) casual role.
        2020: Refinanced both PPOR and investment loan. 1.5 year into the same casual role.

        Living proof a casual can get home loans approved. Of course you need to have good track record of income, even as casual.

        Hope it helps.

        p.s. I churned through 1-2 credit cards (for points) each year. That did not seem to adversely affect me.