Home Loan after Starting as IT Contractor (PAYG)

freshofftheplane on 24/02/2021 - 20:52
Last edited 24/02/2021 - 21:03

I'm going to be switching from my current perm role into a contracting role that will make me employed through an agency on a rolling 6-month contract. The yearly wage will be about 40% higher than what I currently make.

I'm looking to hear from someone that had gone through a similar experience and managed to get a home loan, let's say within 1-3 pay-checks after changing their employment status.
The internet (any my broker) seem to be unclear about the feasibility of this.
Apart from this I'm very stable financially, having zero debt and am looking to borrow about 50% of how much the house costs.

Please - no opinions, just data.

Cheers

Financial Home Loan Loan

Comments

  • MilkDrinker on 24/02/2021 - 21:06

    Usually banks usually want tax returns to show proof of income, if you are JUST starting out a new contract that may be hard to get until at least after July. Since you said you had a perm role maybe they could take into your past job history into account as a reliable show of income generation.

    Maybe you could pull of a low doc loan 40/60 from a bank like suncorp if you are lucky. TBH if your broker can't get you a bank that will lend to you maybe shop around and get one that can?

    Though of course I am just a random person on the internet and not a financial advisor. The advice here given is not a financial advice.

    • Chandler on 25/02/2021 - 11:03
      +1

      I don't think I've ever had to provide a tax return for a loan. Payslips, yes, but not a tax return. Having said that, I was employed full-time at the time every time it's been time to get a loan.

      • lgacb08 on 25/02/2021 - 16:56

        The moment your payslip not showing annual /sick leave then you'll be asked for a tax return.

        • Chandler on 26/02/2021 - 10:53

          Why is that? As evidence of employment period?
          (mine does, just curious why it would matter)

          • lgacb08 on 03/03/2021 - 22:54
            +1

            @Chandler: casual employee will have to prove income for much longer period of time

  • elgrande on 24/02/2021 - 21:36
    +2

    How can I upload my data? Having trouble..

    • Hardlyworkin on 24/02/2021 - 21:54
      +3

      Sorry, I can't share my opinion of how to do it.

  • The-Kremlin on 24/02/2021 - 21:44
    +1

    You could with 1 - 3 pay cheques being on a temp contract however it would be deemed high risk and would have to go with a smaller lender who would charge higher rates…the main banks are unlikely to accept that level of risk.

    Speak to a broker who has several years experience in the game and who has access to several lenders (20 +), not just the main banks. You'll definitely be able to get lending, especially only wanting to borrow 50% of the house value, just a matter of you being happy to pay a higher rate of interest.

  • dmbminaret on 24/02/2021 - 21:50
    +1

    Please - no opinions, just data.

    You need to apply and let us know your data. Every scenario will be different with different applicants and different lenders.

    • dtxau on 24/02/2021 - 23:55
      -3

      Here's some data based on my scenario.

      My current homeloan rate is

      3 . 1 4 1 5 9 2 6 5 3 5 8 9 7 9 3 2 3 8 4 6 2 6 4 3 3 8 3 2 7 9 5 0 2 8 8 4 1 9 7 1 6 9 3 9 9 3 7 5 1 0 5 8 2 0 9 7 4 9 4 4 5 9 2 3 0 7 8 1 6 4 0 6 2 8 6 2 0 8 9 9 8 6 2 8 0 3 4 8 2 5 3 4 2 1 1 7 0 6 7 9 8 2 1 4 8 0 8 6 5 1 3 2 8 2 3 0 6 6 4 7 0 9 3 8 4 4 6 0 9 5 5 0 5 8 2 2 3 1 7 2 5 3 5 9 4 0 8 1 2 8 4 8 1 1 1 7 4 5 0 2 8 4 1 0 2 7 0 1 9 3 8 5 2 1 1 0 5 5 5 9 6 4 4 6 2 2 9 4 8 9 5 4 9 3 0 3 8 1 9 6 4 4 2 8 8 1 0 9 7 5 6 6 5 9 3 3 4 4 6 1 2 8 4 7 5 6 4 8 2 3 3 7 8 6 7 8 3 1 6 5 2 7 1 2 0 1 9 0 9 1 4 5 6 4 8 5 6 6 9 2 3 4 6 0 3 4 8 6 1 0 4 5 4 3 2 6 6 4 8 2 1 3 3 9 3 6 0 7 2 6 0 2 4 9 1 4 1 2 7 3 7 2 4 5 8 7 0 0 6 6 0 6 3 1 5 5 8 8 1 7 4 8 8 1 5 2 0 9 2 0 9 6 2 8 2 9 2 5 4 0 9 1 7 1 5 3 6 4 3 6 7 8 9 2 5 9 0 3 6 0 0 1 1 3 3 0 5 3 0 5 4 8 8 2 0 4 6 6 5 2 1 3 8 4 1 4 6 9 5 1 9 4 1 5 1 1 6 0 9 4 3 3 0 5 7 2 7 0 3 6 5 7 5 9 5 9 1 9 5 3 0 9 2 1 8 6 1 1 7 3 8 1 9 3 2 6 1 1 7 9 3 1 0 5 1 1 8 5 4 8 0 7 4 4 6 2 3 7 9 9 6 2 7 4 9 5 6 7 3 5 1 8 8 5 7 5 2 7 2 4 8 9 1 2 2 7 9 3 8 1 8 3 0 1 1 9 4 9 1 2 9 8 3 3 6 7 3 3 6 2 4 4 0 6 5 6 6 4 3 0 8 6 0 2 1 3 9 4 9 4 6 3 9 5 2 2 4 7 3 7 1 9 0 7 0 2 1 7 9 8 6 0 9 4 3 7 0 2 7 7 0 5 3 9 2 1 7 1 7 6 2 9 3 1 7 6 7 5 2 3 8 4 6 7 4 8 1 8 4 6 7 6 6 9 4 0 5 1 3 2 0 0 0 5 6 8 1 2 7 1 4 5 2 6 3 5 6 0 8 2 7 7 8 5 7 7 1 3 4 2 7 5 7 7 8 9 6 0 9 1 7 3 6 3 7 1 7 8 7 2 1 4 6 8 4 4 0 9 0 1 2 2 4 9 5 3 4 3 0 1 4 6 5 4 9 5 8 5 3 7 1 0 5 0 7 9 2 2 7 9 6 8 9 2 5 8 9 2 3 5 4 2 0 1 9 9 5 6 1 1 2 1 2 9 0 2 1 9 6 0 8 6 4 0 3 4 4 1 8 1 5 9 8 1 3 6 2 9 7 7 4 7 7 1 3 0 9 9 6 0 5 1 8 7 0 7 2 1 1 3 4 9 9 9 9 9 9 8 3 7 2 9 7 8 0 4 9 9 5 1 0 5 9 7 3 1 7 3 2 8 1 6 0 9 6 3 1 8 5 9 5 0 2 4 4 5 9 4 5 5 3 4 6 9 0 8 3 0 2 6 4 2 5 2 2 3 0 8 2 5 3 3 4 4 6 8 5 0 3 5 2 6 1 9 3 1 1 8 8 1 7 1 0 1 0 0 0 3 1 3 7 8 3 8 7 5 2 8 8 6 5 8 7 5 3 3 2 0 8 3 8 1 4 2 0 6 1 7 1 7 7 6 6 9 1 4 7 3 0 3 5 9 8 2 5 3 4 9 0 4 2 8 7 5 5 4 6 8 7 3 1 1 5 9 5 6 2 8 6 3 8 8 2 3 5 3 7 8 7 5 9 3 7 5 1 9 5 7 7 8 1 8 5 7 7 8 0 5 3 2 1 7 1 2 2 6 8 0 6 6 1 3 0 0 1 9 2 7 8 7 6 6 1 1 1 9 5 9 0 9 2 1 6 4 2 0 1 9 8 9 % variable, investment.

  • Indomietable on 24/02/2021 - 22:15
    -1

    I know someone who get a home loan at 90% without having a job.

    • Some Guy on 24/02/2021 - 23:12
      +1

      Influencer?

      • EightImmortals on 25/02/2021 - 08:43

        Politician?

        • Indomietable on 25/02/2021 - 11:57

          Nope .. he really does not have a job. This is back 25 years ago so lending was different. He has some income from his positively geared property and the loan was for < 200k. This is the data :D

          OP need to get real .. he did not provide complete data ie , his income, how old he is, family/ living situation, kids, dependant, spending , does he really have no debt (some people think car lease is not a debt), what type of property he is buying, price of the property, is he a first home buyer etc . He simply can't expect people to give you data.

          • freshofftheplane on 25/02/2021 - 12:40

            @Indomietable: You are right. I was thinking more in the way of "would it be impossible for me to get a loan if I had just started contacting"

            Thanks for your input though, especially the one from 25 years ago :)

    • The-Kremlin on 24/02/2021 - 23:28
      +1

      I did the same…I don't have a job. I've got a business…

  • thebossmel on 24/02/2021 - 22:29

    I know someone who got home loan 80% of the home value with 6 months of working as IT contractor and no other past work history in Australia. This was about two years ago.
    Based upon that, I dont see there should be any issue in your case.

  • mr_asstight on 24/02/2021 - 22:42
    +1

    You'll need at least 6 months of continuous contractor employment before the you can be approved for a loan

  • pndl on 24/02/2021 - 23:09

    Mainstream lenders will require 6 months as a general policy. Anything less will probably be by exception or with a niche lender.

  • Gracey on 25/02/2021 - 01:41

    How long were you employed as PAYG in that role? This will have an impact on your ability to borrow under the new contractor income

    • freshofftheplane on 25/02/2021 - 08:19

      3 years

      • Gracey on 25/02/2021 - 10:41
        +2

        I cant see this being an issue, feel free to reach out at any point and ill put you in the right direction.

  • rollin on 25/02/2021 - 08:23

    40% increase. Wowza, how do i get this haha.

    • freshofftheplane on 25/02/2021 - 08:24

      By switching to contract work

      • rollin on 25/02/2021 - 08:26

        What area do you work in IT? i tried to contract around sydney but the rates werent much better than FT rates. May have just been my area/luck.

        • freshofftheplane on 25/02/2021 - 08:27
          +1

          Software development. I think that covid and the fact that skilled migrants are barely getting into the country might have a thing to do with it

          • rollin on 25/02/2021 - 08:30

            @freshofftheplane: Ah. Seems to be like gold these days. I went with MQB and they were great although i am FT so not the same situation. They were very flexible compared to some banks as we were expecting a child. Good luck with the contracting and HL.

    • [Deactivated] on 25/02/2021 - 09:06
      +1

      First you must accept a job for 40% less.

      • rollin on 25/02/2021 - 11:49

        Just happy to have a job these days haha

  • [Deactivated] on 25/02/2021 - 08:43

    Talk to Macquarie Bank about this. Apparently they are amenable to IT staff changing role type as this is common in the industry. Unsure how they approach other job types.

    Just be honest and upfront about your situation, why you're changing role. They may want to see your past tax statements and future signed contract. Full approval may be conditional upon seeing a first pay from the next role.

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