What do lenders look for exactly?
I have a progressing career in IT though it's all been yearly contracts (for the last 4 years with a 1 year study break).
The contracts include leave conditions (annual and sick leave).
Edit: to particularise my question further, would I be accepted for a loan with the above and (if not) what would lenders be looking to see? (i.e. job permanency? Certain number of years? Etc.
Job security. Looks for ”Permanent" / self employed, potentially
Previous tax return/s, income & expenditure etc.
Do they typically have a number of years in mind? ie in my circumstances I've only got 3-4 years of work history.
The bank manager asked for the previous 2 tax returns & the past 4 payslips. I'm not sure what they will say about your employment as you've been there several years and a contractor. I've been full time so I haven't had that issue.
Try a broker if you have no luck directly with the banks.
what do lenders look for exactly?
I’d look at your OzBargain post history and then instantly approve your loan dyl. You deserve it.
Hahahaha
Does eligibility scale with number of pizza deal posts?
Hi Dyl
Broker here.
There's definitely a few lenders who will accept your income as standard so no concern about the 1 year contracts. This is not unusual in the IT space. Casual is a bit different (daily rate IT workers, no leave entitlements) but in your instance where you receive annual leave and sick leave, it'll be fine.
Cheers
Some lenders only only require one to provide 3 months of bank statement showing income and savings.
They will scrutinize your expenditures by going forensically through your bank records….
Not if you have a low LVR.
Jokes on them, my current expenditure is only about 20% of my income lol, including rent and utilities
Open a second bank account and have your salary paid into your primary account. Then transfer monthly payments to your second account. This will give you a clean second account. Do this for three months and you’ll be good to go.
Some banks like CBA treat your employment situation the same as someone who is employed permanent fulltime. In general, the bank would like to see 3 months to 6 months remaining on the contract however this is bank specific so each bank will have a different criteria.
Also, whether your need borrow 80% (without lender's mortgage insurance) or will need to borrow more than 80% (with lender's mortgage insurance) will make a difference to the bank's policy as well.
Best speak to a mortgage broker rather than go directly to one bank so the broker can review which bank would suit your situation, while also factoring other aspects of your situation.
Make sure you let your mortgage broker know that you are on a fixed term contract and that advise when the contract ends and when it will be renewed etc.
That's basically the info I was after, cheers
Look at your history, and if you have a history of contract work with no gaps between roles, should be good to go, provided your current contract still has a ways to go. You will probably find that your servicing capacity will be based on your 2020 earnings, though, not necessarily on what you're earning in your current role.
Tax returns, savings history, any other creditor loans, current annual income, etc