Income Types
Assessable income
Home loan lenders have their own policies regarding different income status
Your type of income can affect your home loan application and/or interest rate offered
Different employment classifications have different risk profiles
- Low risk – PAYG employee
- Low to medium – Casual
- Medium – Sole trader
PAYG employees
PAYG employee with stable employment is the lowest risk
PAYG employees have regular wage payments, giving a degree of certainty to the home loan lender
Length of employment with a stable working history are also very important too
Overtime, commission and bonus’s can be considered by some lenders a fluctuating part of the income and considered extra income
Often the extra income will be reduced down or not considered at all
Casual employees
Different industries casual work is the norm
It’s the consistency of the wage the home loan lenders like to see
With casual work you must have been in your role for at least 6 months
If your wage fluctuates, the lender will be concerned about your ability to make the home loan repayments
Sole traders
Sole traders are considered self-employed
Especially if income is irregular, and they alone are responsible for their own business
Sole traders face stricter criteria when it comes to documentation they need to provide
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