Home Loans and Part-Time Employment

A part-time job won’t preclude you from getting a home loan. You’ll just need to meet some specific criteria. Find out how lenders look at people working part-time and what you can do to improve your chances of getting a loan.

| | 3 minute read

You Can Access Home Loan Products While Working Part-Time

Major lenders tend to view those working part-time as risky borrowers. This means it’s often difficult to get home loan products while working part-time. Even if you have good reasons for working part-time, many lenders will be wary.

The Major Issues

Most lenders will want to see that you have held the part-time job for a long time. Many will also need to know more if you work part-time alongside a full-time role.

Generally, most lenders favour those in full-time work. After all, this type of work is what is most familiar to bank employees themselves. A full-time role shows commitment to the job and more stability.

Still, there are some lenders that understand the reasons for people working part-time. They will examine your lifestyle and respect your decisions. It’s through such lenders that you have a greater chance of securing a home loan.

Do Lenders Accept All Your Part-Time Income?

Most lenders only consider half of the borrower’s income from a part-time role. You also need to have worked in the role for at least 12 months. Combined, these are the big issues facing borrowers who work in part-time jobs.

As such, it becomes more difficult to prove that your income is high enough to meet the repayments on a home loan. This limits the home loan products you have access to.

There are some lenders who will accept the full income from your part-time job. These are few and far between but you must find them to access larger home loans.

The issue is less problematic if you earn a large amount from the part-time role. High income, even from a part-time job, opens doors to bigger loans.

What Do Lenders Need?

For a lender to consider you for a home loan on a part-time job, you will need to provide some documents. Most want at least two recent payslips and proof that you have worked in the role for a minimum length of time. Some have stricter criteria. It all depends on the lender. You will generally find that major banks have tougher criteria than specialist lenders.

Does Increasing Your Hours Help?

Getting more hours from your employer can help you find a larger home loan. You might have to consider moving into full-time employment if the loans available to you don’t meet your needs.

Even then, lenders need to see commitment to the new role. Most will want you to wait for another six months. This gives the lender time to determine that your new income is stable.

In rare cases, a lender may accept increased hours within one or two months. Again, you must provide proof of your new hours via a payslip.

This means that increasing your hours could help you secure your loan. This will require some patience on your part.

What Should You Do?

Please note that the information in this article is general in nature. Before making any decisions, you should talk to an expert. They can help you understand your current situation and the home loans you can access. With the help of an expert, you can make the right choice for your situation.

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Alexi Neocleous

With over 20 years experience, Alexi has written extensively a wide cross section of financial topics. These topics range from financial planning, mortgages, property commentary and all points in between.

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