Second Job Mortgage
With the rising cost of living, many people now have to take on more than one job to meet their financial obligations. This extra cash may help toward household expenses, car repayments or even mortgage repayments.
However, some banks only accept the income you earn from your regular job and do not take into account other sources. How can you ensure that the banks accept your second job income so that you get the loan you need? Read on to find out how.
What do the banks think?
The type of work you undertake and the length of your employment are important factors that the banks take into consideration when assessing your ability to service the loan.
If you have only been working in your second job for a few months, most lenders will not include that income. This is because your second job may not truly reflect your earnings and the banks do not want to lend you more than you can really afford. If your second job was suddenly terminated, you would no longer be able to rely on that income source to pay back your debts.
Will the banks accept my second job income?
Most banks have very strict lending criteria and as a result tend not to include second job income in a serviceability assessment. Exceptions apply where you have been working in that role for a minimum of 12 months. However, not all of your income will be accepted. Most banks will only include 50% of your income from your second job. Where you are working more than two jobs the banks may request your tax returns in order to establish your average annual income.
If you will meet this lending criteria, speak to one of our mortgage brokers on 1300 886 115 or enquire online so we can find the right bank for you!
What if I want 100% of my income accepted?
Although it may be difficult, it is possible! We know of lenders that will accept 100% of your second job income even if you have only been in that job for three months! Even if it has only been for a day some lenders may still accept your income! However you must be able to prove that you have stable finances and a good credit rating.
How much can I borrow?
Most people will only qualify to borrow 80% of the property value however this is very much based on your individual circumstances. Speak to our mortgage brokers to see whether you may be able to borrow up to 95% LVR!
Is a deposit necessary?
A deposit demonstrates to the bank that you are a good saver and have the ability to make prompt loan repayments. However the banks understand that you may have other financial obligations to meet! So as long as you have the income to support a loan, a large amount of savings aren’t necessary!
Is employment stability important?
If your second job is part-time or casual this may hamper your efforts to secure a mortgage. Despite your belief that you may be able to meet your mortgage repayments, most lenders like to see employment stability and a long working history in the same job. However, earning additional money should make you a lower risk, not a higher risk! There are some lenders that will include this income.
Why get a second job?
Most people obtain a second job in order relieve financial pressure, save money for a holiday or finish off home improvement projects. There are many positives to getting a second job. These include:
- Converting a hobby into a paying job. Many people earn money from markets, online work, event planning, fitness work and other hobbies.
- Expand your regular earnings to help alleviate debt
- Build up more skills and receive greater job satisfaction
- Maintain a busy lifestyle
There may be other factors involved, but generally, the need for additional money is the main reason that people get a second job. A second job may include being a temporary employee, or an agency worker.
What types of second jobs are there?
According to the Australian Bureau of Statistics (ABS), people commonly take on additional jobs in the:
However second jobs are not restricted to these areas. People commonly find second jobs across a wide variety of industries.
Contact our mortgage brokers today!
Securing an employment mortgage does not have to be a stressful process! Leave your loan in the hands of people who deal with this everyday. This way you can ensure that your loan application is submitted with the right lender, maximising your chances of approval. Enquire online or call 1300 886 115 to find out how we can help you.
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