How To Overcome Serviceability Challenges As A Casual Worker
Dilleen Property Group 2023
Are you on a casual wage, eager to step into the property market but struggling with serviceability? You're not alone. Casual income can be a double-edged sword, offering flexibility while also causing challenges when it comes to securing a property loan. In this blog post, we'll explore strategies to enhance your serviceability as a casual worker and increase your chances of making your property investment dream a reality.
Understanding the Nature of Casual Income
Casual income is a vital part of the global workforce, providing flexibility for both employees and employers. However, its dynamic nature has also put it under the lender's microscope. The uncertainty surrounding casual work, especially highlighted during the pandemic, has made lenders cautious. Casual workers often face reduced serviceability due to their lack of traditional benefits such as annual leave and sick leave.
2. The Six-Month Rule
A common guideline among lenders is the six-month rule. To enhance your serviceability, aim to be in the same role for a minimum of six months. This period demonstrates a level of stability that lenders find reassuring. Some lenders may cut your total income down to 80% as a buffer to account for the absence of benefits such as annual leave and sick leave. However, there are also lenders that are willing to go up to 100% depending on how long you’ve been in the industry and the strength of your application.
3. Rules for Contractors
If you're a contractor, you'll find the process similar to that of a casual worker. The six-month rule still applies, emphasising the importance of demonstrating a stable income stream. By aligning yourself with this rule, you're positioning yourself favourably to address serviceability concerns and gain a stronger foothold in the property market.
Conclusion:
In conclusion, casual income, despite its challenges, doesn't have to be a barrier to your property investment aspirations. By understanding the criteria lenders assess and by strategically planning your approach, you can enhance your serviceability and start your own investment journey. Each financial journey is unique, and with the right guidance and determination, you can walk towards securing your future in the property market. If you’re looking for experts to have a look at your finances for you, you can speak to our broker Justin Picker here. Furthermore, if you’re looking to build your own property portfolio or need help starting your property investing journey, feel free to contact us here to learn more about our services and investment strategy.
Disclaimer: This is not intended as legal, financial, or investment advice and should not be construed or relied on as such. Before making any commitment of a legal or financial nature, you should seek advice from a qualified and registered legal practitioner or financial or investment adviser.
