Home Loan Rate – Australia

If a large percentage of your income comes from commission, you may need to apply for a commission income mortgage. This is when the lender marks down funds that you earn from commission or bonuses as a source of income that you will be using to pay for their mortgages. Considering the financial environment, it’s not surprising that the bank considers this a risky source of annual income.

Since funds earned on commission are less likely to remain steady, banks often require a definitive paper trail to assure them that the cash flow will continue. Mainly, they want to know that you have a sustainable source of income.

If a significant amount of your income comes from commission or bonuses, it is especially helpful to get in touch with a mortgage broker. Since they have contacts in the underwriting industry, they are capable of discussing your financial situation with them directly. This means that you won’t have to bother filling out a home loan application with a lender that would never consider working with you. It also means that it will take significantly less time to find one who will.

Because of the fact that a mortgage broker knows its lenders requirements, they are able to quickly identify which bank is ideal for you after collecting your financial information. Some lenders are best suited for high income borrowers with a good credit history. Others are better suited for people who have had a less than stellar financial performance in the past, and may not have as reliable a source of income.

A broker can collect all of your financial information up front. You won’t be forced to fill out an endless barrage of paperwork. Once the broker has your information, they can typically move forward from there without requiring any additional financial information.

Many brokers will continue to work with you even after your first mortgage. They will stay updated on your financial situation, and continue to monitor the lending industry for opportunities to refinance your home loan and get an even better deal.

Why are Lenders Concerned about Commission Income?

Throughout Australia, salesmen who earn a large portion of their income through commission are turned down for home loans even if their financial situation is robust. Many banks won’t even consider dealing with somebody with a commission based income. Those who are willing to work with you will most likely want two years of documentation to demonstrate the stability of your income.

Banks prefer not to work with people who are paid based on commission because the amount of money you earn each month can vary quite dramatically, and it isn’t guaranteed. People who earn a regular salary are considered more reliable.

This is not necessarily fair. There is no such thing as a “guaranteed income” after all, because even people with a regular salary can lose employment. Regardless, this is the logic used by many lenders.

The good news is that not all lenders approach the subject the same way. There are some lenders who are willing to offer a relatively competitive home loan with as little as three months of income paperwork. Working with a broker is still highly recommended, since banks who are more liberal with who they are willing to lend to often have less than ideal interest rates and terms.

Why Some Lenders Consider Commission Income Differently

Not all banks or lenders approach commission income with the risk-averse logic described above. There are many reasons to think of a salesman who earns this type of income to be very low risk. One of the most important factors is the simple fact that you can always work harder in order to earn more. The need to pay off a mortgage is also one of the strongest motivations to work harder.

Since you are only paid significantly when you make a sale, commission based earners are viewed differently from standard employees. The more they pay you, the more money they are earning. This means that people who work on commission are rarely thought of as an “expense” the same way that most employees are. When economic conditions get worse, commission based earners are less likely to be laid off than standard employees.

Finally, most people who work on commission are very financially stable. They have a keen understanding of the way that money works, and are less likely to spend money that they don’t have.

Information You Might Need

Every lender has a different application process, but many of them require similar information. To begin with, most will require documentation of your two most recent paychecks. These need to include your total income for the year, which can be used to extrapolate your annual income.

If the payslip does not include this information, you will likely be asked to provide additional income like a tax return, a letter from the people you work for, and evidence of your sales performance over a period lasting at least three months.

Many lenders will also require at least two years of tax returns and a letter from your employer demonstrating consistent income.

Find more information about commission income mortgages.

Home Loans for Doctors on a 422 Visa

Did you know? Despite doctors on 422 Visas being some of the lowest risk customers, most banks will not accept them for a home loan. However, there are some lenders that can consider lending up to 90% of the property value.

Contact a specialist mortgage broker such as The Home Loan Experts to discuss obtaining a home loan as a non-resident doctor on a 422 Visa.

What do Australian Banks Think?

Australian banks favor Doctors of Medicine and Medical Practitioners above all other professions, as doctors have secure employment, high income and are known to be low risk borrowers.

Lenders monitor the performance of their existing customers, and as such know which professions make their payments on time and do not default on their loans. This is why Australian banks are able to provide significant privileges to Medical Professionals for Residential Mortgages – even if you are not a resident of Australia!

However, not all Medical Practitioners are eligible for this special offer, as these discounts are aimed at graduating professionals and those in selected medical professions.

Am I eligible for a 422 Visa Home Loan?

Below is a list of some medical professionals who are accepted:

• Doctors of Medicine (eg, Anaesthetist, Dermatologist, Gynaecologist, General Practitioners)
• Dentists
• Psychiatrists
• Oncologists
• Optometrists
• Cardiologist
• Surgeons
• Radiologists
• Osteopaths
• Psychiatrists
• Veterinarians
• Physiotherapists
• Radiographers (case by case)
• Pharmacists (case by case)

Change in Visa Subclass

Following the creation of flexible working arrangements for International Medical Graduates (IMGs) under the 457 visa, the subclass Medical Practitioner (Temporary) Visa (Subclass422) was no longer available for new visa applications from 1 July 2010.

However, this new arrangement does not mean that the 422 visa has expired – you will still be able to use your 422 visa until the end of the visa validity period, you are granted a new visa subclass, or you change your employer sponsor.

Merging the Subclass 422 Visa with the 457 Visa streamlines the process for non-residents and temporary-residents, and reduces confusion as to the appropriate choice of visa.

Note that if you are a Doctor of Medicine or Medical Practitioner on a 457 Visa, specialist mortgage brokers can still assist you with special discounts.

What happens next?

We understand that obtaining your medical degree took a lot of time, effort and money and as such your cash may be a little tight right now. Often it takes time to get a deposit together to buy a home, let alone cover the high cost of Lenders Mortgage Insurance.

Thankfully mortgage brokers have already done the research for you, and automatically know which lender will be best suited to your unique situation. This means, that you will not have to go through all the red tape to find the best deal for you!

Contact a specialist mortgage broker such as The Home Loan Experts to discuss obtaining a home loan as a non-resident doctor on a 422 Visa.

Taxes can become costly and they continue to pile up every day.  This is why people try to come up with ways to avoid paying taxes legally everyday.  One way is by letting your employer directly pay your mortgage for you.  Where your employer allows you to salary sacrifice by doing this, you are going to pay less taxes as your gross income is going to be lower.  This is because the money that you ask your employer to directly pay to your mortgage repayments will no longer be considered as part of your income.

However there can be a problem with this, as although you will be paying less taxes, your employer will still be required to pay fringe benefits tax, unless your employer is considered to be an exempt body.  For this reason it may be difficult for you to convince your employer to allow you to salary sacrifice when they will end up spending more.

This should not be the case if your employer is an exempt entity as they do not need to pay the taxes on your fringe benefits.

There are also other ways to use this as a tax shield.  One way is through superannuation.  This means that your salary is reduced by the amount you would like, and it is instead paid to the superfund in anticipation of your retirement.  This effectively reduces your gross income by the amount that you put into the superfund, and assures you of a little more to spend when you retire.

Another way to use this salary sacrifice is to ask for a certain benefit instead of asking for cash.  Due to this fact it is possible to ask for a car to drive, or a computer to use, or various other items you would like to purchase on a regular basis in exchange for a lower gross salary.  However, employers are careful about these types of salary sacrifice as they may be made liable for additional taxes that could cost them more in the long run.

Those with expertise in home loans can show you the correct steps to be taken in order to use this as a salary sacrifice mortgage in order to help you better afford your home.  They can show you the best way to convince your employer to make the home loan repayments and come up with a win-win situation for both parties.

Hi there, I finally started work at my new job.  I’ve lived with my parents for the longest time, but now I want a place of my own.  Is it possible for me to get a loan?

Yes, it possible.  Generally banks and lenders would like you to have spent at least half a year at a job before they decide to grant you a loan.  This is expected because banks calculate risk, and it is more risky for them to be granting loans to people who have not spent too much time at their jobs.  This is because there is a high possibility of not keeping their jobs, and ending up not making the loan repayments.  When you are unable to make repayments then the banks will lose money, and then have to look for ways and means to recoup their losses.

However, if you desperately want a new home, and cannot wait for six months, or twelve months in order to get a loan, there is still a way of getting a home loan.  The trick is to find the right lender.  There are lenders out there who look at those holders of a new job differently.  In fact, there are some lenders who are willing to grant a loan even if you have spent just one day on the job.  Others may require a shorter period of one month or three months, at least you do not need to wait for the full six months.

The home loan experts have access to these lenders who are open to granting loans to new job holders.  They understand the situation of those who have just started working, and their need for access to quality loans.  With their help, it is highly likely that you will be able to get a home loan, even if you have just started a new job.

People work hard to earn their keep, in fact some work as much as 16 hours daily or work 36 hours before taking a break.  This is usually due to overtime, and lack of personnel to do their jobs.  Overtime for those in the health sector, law enforcement, and the emergency department, find it to be very common and is part of their daily life.  This means that they earn a lot more than their basic salary because of the overtime that they get.  The problem is that when they apply for home loans, often their overtime income is either not at all recognized or only partially recognized.  For these workers it is not fair to recognize only a portion of their overtime income, but the overtime income should be credited 100%.

However, this is not how some banks and lenders think.  These lending institutions think that overtime is not regular income and should not be credited and added to the income earned in a possible loan application.  This is because if overtime is recognized they will be taking undue risk in something that they cannot be sure of.

Thankfully, not all banks and lenders refuse to recognise overtime income.  There are several lenders out there who are willing to recognise your overtime income as long as it is regular enough.  There are likewise some classes of employment wherein overtime income is immediately recognised.

It is just and fair to include the money earned from overtime to be added to the facts in the loan application.  The same work, or often harder work is done during overtime, and people are more fatigued and tired doing overtime work as it is beyond their usual work hours.  To deny them their right to get a loan would be the height of injustice.

For more information on overtime income and how to get 100% of your overtime recognised it would be best to consult the experts on home loans.  They can provide you with the proper information on how to get your overtime income recognised entirely, and hence, enable access to bigger and better loans.

Nearly all people need to work and earn, join the rat race, it is a continuous process of needing to fuel the need to survive.  For those who are fresh graduates, and are looking for a new job, they tend to seek the help of agencies to provide them with good, high earning employment, which may be on a project basis at first, then develop into a regular job.  However, for those who rely on agencies to find their jobs, these types and forms of jobs are often temporary.  Although they can be considered to be only temporary earnings, they turn out to be generally beneficial, and projects are abundant.  This is especially true for mining, IT and healthcare jobs, which are in constant demand.

When these temp or agency workers try to apply for a loan, the story may be different from those who are regularly employed.  Those who are regularly employed with a stable job and constant income have it easy, and often get the best loans available as long as they provide the correct documentation and they keep their credit scores in check.

Temp or agency workers on the other hand are a different story.  Banks and lenders often see these types of workers as too risky to grant a home loan to.  Because of the possibility that they lose their income flow after a certain project, they are not the best candidates for home loans.  This does not mean that it is impossible for them to have a loan approved.  There are a handful of lenders out there that are willing to grant a home loan to temp or agency workers.

For more information on loans for temp or agency workers it would be best to consult the experts on home loans.  They can direct you to the lenders who are most likely to grant your home loan and can advise you as to what particular requirements to prepare in order to get the loan approved.

Every person has a specialization and has a skill that he or she is good in.  These personal skills are usually the reason why they get hired in the first place.  The job may be a menial job, a job at a company, self-employment, project based jobs, seasonal jobs, and a lot of other options.  Different jobs of course mean different modes of payment.  For most employees, payslips are common and these provide the necessary information on how much income is received, any previous loans made, the status of the loans and similarly related items.

Payslips are often required by banks and lenders in order to approve different types of loans.  In order to avoid risk, they need a basis for granting their loan products, and the easiest way to assess these loan products is by requesting for payslips from those who receive them.  A problem then arises when those who are employed do not receive payslips.  Where there are no payslips to present, it becomes difficult to get approval for the loan as banks have no basis whatsoever for granting the loan.

However there are ways to prove that you indeed receive income and that you are employed.  The most common way is through an employment letter from your employer.  You may also choose to provide tax certificates or group certificates as proof of income.  For those who have property holdings, it is also possible to present the property’s assessment value you can also likewise present salary credits.

The more documents you can present, even without the existence of payslips, the more likely that your loan will be granted.

For more information on how to get a home loan without the use of payslips, it would be best to consult the experts on home loans.  They can provide you with the necessary information and advice, as to which documents may be acceptable to a particular lender or bank in order to enable you to have your no payslips home loan approved as soon as possible.

Individuals who are self-employed or who own their own business have the same dreams and aspirations as those who work at a company and are paid a regular monthly income.  In fact, they usually dream even bigger as they had the confidence to take as big a risk as setting up their own business.  However, when it comes to loans, those who are self-employed often have a hard time getting a loan in the first place.  With all the documentary requirements that banks and lenders ask for before a loan can even be processed, they may find it hard to comply with all the documents asked for, and this would result in their not applying for a loan at all.

The problem is that those who are self-employed especially if their business is new, have little to no documents to present as proof of income, and this proof of earnings is what banks and lenders give priority to.

This does not mean that those who are self employed can no longer get a home loan.  There are ways and means for these business owners to get a loan without having to comply with all the documentary requirements.  This is by applying for loans which do not require any Business Activity Statements (BAS) whatsoever.

The banks however do require an Australian Business Number or ABN and certain criteria such as being GST registered, and the requirement of having a good credit history, and you must have a business or job for at least one day.  This specific requirements are good for loans of up to 60% of the property value.

In order to get loans at higher amounts like 80% or even higher the requirements will necessarily differ.

For more information on how to get a home loan with No BAS it would be best to consult the experts on home loans.  They can give advice and help you apply for home loans which do not require you to submit any Business Activity Statements.  Hence, you no longer need to worry about where to look and find documents that you cannot provide, and rest assured that you have a good chance of having your home loan approved.