Home Loan Possibility When Working Freelance Overseas

Lccyw88 on 24/07/2022 - 08:07

My husband works in the oil & gas industry and does freelance jobs overseas. His yearly income has been pretty stable although he doesn’t have a month to month pay slip as he only works 4-5 months a year. He pays on average $30k+ in tax a year. We spoke to a broker before and he told us that his chances of getting a loan in Australia is slim as his income is overseas and he doesn’t have a regular payslip.

Is this true? Are there ways to help increase his chances to be considered by the banks for housing loan?

Our house will be completing in a few months time. Our initial plan was to have the loan only in my name using my single source of income but with all the increase in mortgage rates and cost of living, I’m getting worried I might get rejected for the loan with just my income alone. Just thinking ahead for a plan B if this happens and what my husband would need to do to be considered for a housing loan.

Financial Home Loan

Comments

  • boomramada on 24/07/2022 - 08:15
    +2

    Don't think you can get a standard loan with no regular income and payslip.

    Our house will be completing in a few months time.

    So you building a house without establishing construction loan? Ie your own money?

    • ccyw88 on 24/07/2022 - 08:24

      We’ve put in a 10% downpayment for an off the plan townhouse a year + ago which is completing soon.

      • boomramada on 24/07/2022 - 08:33
        +1

        I wouldn't put a down payment at least without a pre approval. Or it just me?

        • ccyw88 on 24/07/2022 - 08:39

          We couldn’t even get a pre-approval when construction hasn’t even started yet then. But my income has been assessed by the broker then and he said I would have no problems getting a loan approve but I haven’t spoken to him since all this interest rate hike debacle.

          • boomramada on 24/07/2022 - 08:43

            @ccyw88: For next time, you dont need a house or construction for pre approval. If you cant get one, time to find a better job or more savings.

            Look like this could be one of your best option at this stage
            https://www.realestate.com.au/advice/can-you-sell-off-the-pl…

            Or this https://www.savvy.com.au/home-loans/foreign-income-home-loan…

          • Ughhh on 24/07/2022 - 11:46
            +2

            @ccyw88: You couldn't get pre approval because construction hasn't started yet, you couldn't get one regardless?
            If the latter, that's very risky.
            Should be able to get a pre approval before even looking for properties.

            • ccyw88 on 25/07/2022 - 08:46

              @Ughhh: I think I should rephrase my sentence a little bit as it is misleading. We didn't approach a bank to begin with, all we did was spoke to a broker, told him about our finances just trying to gauge what our borrowing power would be like. No point getting a pre-approval when circumstances may change in 2 years time unless I was buying 1 now there and then.

              His advice was with my income at the time, I have no problem securing a loan as long as I cancel my existing credit cards on hand (had 3 on hand for points collection), which I had no problem doing as that was my intention anyway. I had a $40k car loan which we have paid off last year, and got a $50k payrise so didn't think any of these would be a problem anymore. But with the increase in cost of living and interest rates, just paranoid things may not go as plan and just seeking alternative back up plan.

              • boomramada on 25/07/2022 - 11:52

                @ccyw88: You can check again. When the interest rates goes up, borrowing amount usually slightly reduced.

  • wei13 on 24/07/2022 - 08:28
    +2

    Reading between the lines sounds like he doesn't even live in Au most the time?

    Maybe get a job here for the other 8 months he's not working. And he can quit after he secured a loan.

    • Quantumcat on 24/07/2022 - 10:48

      He'll need to hurry up as banks won't like him only being in the job for a short time either

  • bemybubble on 24/07/2022 - 08:30
    +1

    It is harder to borrow using overseas income but not impossible.

    I looked at this Feb last year for a client. So long as you are a resident borrower i.e. living in Aus - then your chances increase.

    • ccyw88 on 24/07/2022 - 08:42

      He is considered a tax resident since he is still paying his taxes, does that count? Is there anything in particular he should be doing now to increase his chances?

      • bemybubble on 24/07/2022 - 08:43
        +5

        Tax Resident vs Borrowing Resident are two different things. The latter is purely a banking definition and I am unsure what meets it.

        The way he increases his chances is to deal with a broker who is exposed to these sort of dealings on the regular. Like all things banking - presentation of a deal is everything…

  • Quantumcat on 24/07/2022 - 10:49

    Have another meeting with the broker and sort it out ASAP. Last thing you want is to lose your deposit.

  • bobbified on 24/07/2022 - 11:27
    +3

    My husband works in the oil & gas industry

    This trick barely works on gumtree anymore… I doubt it'll work on a bank! haha (jokes!)

  • miwahni on 24/07/2022 - 23:41
    +1

    The biggest thing your husband could do, to have his income included, is to get permanent employment. A lot of banks etc won't look at overseas income that comes from self employment / contracting/ freelancing, but will include income (albeit shaded) for permanent employees.

  • Kinko82 on 29/07/2022 - 11:57
    +1

    Definitely get back in touch with the broker that did that initial assessment of your borrowing capacity to see how the increase in interest rates have affected your borrowing capacity.

    It's also important to work out exactly how much you will need to borrow based on how much additional money you can contribute at settlement.

    You'll at least get more clarity to your situation.

    There may be lenders/banks that can support your husband's income but it'll definitely come down to how clearly the broker or yourself can help the lender understand how your husband's income works and you'll most likely need some sort of exception to the lender's standard credit/assessment policy for them to use that income in the borrowing capacity/approval calculations.

    Speak to a few brokers and give them the details of your situation and see who can come back with the best solution for you.

    Make sure you get onto this asap so you have sufficient time to prepare for whatever you need. Once the property is completely and settlement is called by the seller/developer, you usually will only have 2 to 3 weeks time to settle and if you don't settle on time, you'll be paying penalty interest on a daily basis at the rate written in the contract.

  • Mr Krinkle on 29/07/2022 - 14:11

    Look into a low-doc loan. A good broker will have options.

    You can also look into low-doc loan from one of the non-conforming lenders.

  • mini2 on 29/07/2022 - 21:56
    +1

    Pepper, La Trobe or any non-conforming/last resort lenders.

    You'll pay for it, though.

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