It’s not easy being a contract worker. There’s the uncertainty of guaranteed employment, the long gaps between one job and the next and, on top of all this, your home loan options are far more complicated.
This is no fringe issue: A significant number of Australians are independent contractors. According to the most recent Forms of Employment Survey carried out by the Australian Bureau of Statistics, of the 11.6 million employed persons in the country, a full 9 per cent – or just under one million – are contractors. That’s nearly a million Australians who could have trouble securing a home loan when consulting the average lender.
Mortgageport, however, understands the trials and tribulations the average contract worker faces in securing a mortgage – that’s why we tailor our services to their unique needs and considerations.
What issues do contract workers face when getting a mortgage?
The nature of contract work means that certain lenders are more careful when it comes to dealing with such employees.
“A lot of contract workers go from job to job and have short term contracts,” Mortgageport Managing Director Glen Spratt said in a recent interview.
“All lenders like to see someone with a nice, steady job. But contract workers are often a bit of a hired gun, going and doing things for a certain period of time, and sometimes they’ll have gaps between their contracts.”
For example, while any given contract can last for anything from six months to three years, the next contract might not come along for another month or so. This makes it harder for a contract worker to convince a lender that they’ll be able to keep up with their monthly repayments.
“It can cause some lenders to get a little bit worried about whether or not their contract will be extended,” continued Mr Spratt.
As a result, contract workers’ mortgage applications tend to be treated more like those for self-employed home loans.
How contract workers can help themselves
There are a number of things contract workers can do to make securing a home loan easier. Most importantly, a contract worker needs confidence that she or he can generate work going forward.
“It’s a long-term commitment, a home loan. Just because they get one big paying contract, they need to look past that and find out where would they be once that contract finishes,” explained Mr Spratt.
In addition to this, they should make a back-up plan in case this contract doesn’t get renewed.
At the same time, contractors need to remember that part of the reason for their contracts are their potentially higher skills, longer hours, larger pay and other advantages – so make the most of this income while you can, to either pay off debts, save or both.
And, of course, choosing the right mortgage manager is key.
Mortgageport can help secure home loans for contract workers
Other brokers prefer the assembly line approach to mortgages. They want to get through a seemingly endless line of home loan transactions that are quick and easy to do – but when a more complex job comes along, it clogs up the machinery and everything grinds to a halt.
At Mortgageport, our home loan experts are used to dealing with more complex transactions, so we don’t need to take this approach. Not only that, but we care about our customers, and reject the call centre mentality that diminishes a sense of continuity for customers.
Finally, we can do the whole process over the phone or by email, so even if you’re contracted somewhere remote – such as a regional mining community – we can help you out.
So if you’re a contract worker, get off the assembly line and come be treated like an individual at Mortgageport.