Emergency services personnel sacrifice a lot for the sake of others. Police officers, firefighters, and emergency medical workers often work long hours, doing shift work and plenty of overtime, in roles that could put their health and safety at risk.
It doesn’t seem fair that they should then be penalized when it comes to applying for a home loan, and yet, that is exactly what can happen. Because many lenders have strict criteria regarding their acceptance of overtime or shift loadings as part of an applicant’s income, some emergency services personnel have had a hard time obtaining a mortgage at a level that allows for the regular income that they receive.
Fortunately, there are some lenders out there who believe emergency services personnel should be rewarded for their hard work and sacrifice – the trick is knowing who these lenders are and what kind of information they’ll require to approve an application.
While some credit unions are specifically for those working in the emergency services (such as Police Bank, QBANK and Firefighters Mutual Bank), there are also other lenders on some brokers panels who are willing to extend unique benefits to emergency services personnel.
These benefits could include lower interest rates and reduced deposits needed – but mainly it is around making sure that the loan you have in place or are looking to secure reflects the income by being able to use your FULL allowances as part of the lenders assessment.
This is why it’s well worth speaking with an experienced mortgage broker if you work in the emergency services area – they can help you to approach the right lenders, with the right information, to ensure you get the loan that is right for you.
- Will lenders accept shift allowances and overtime as part of my income? It’s true that many lenders won’t accept the full amount of overtime, loading or shift allowances that you’d receive within an average year. Some lenders will only accept up to half of these allowances, which can have a significant impact on your application. But, fortunately, there are lenders who will accept 100% of additional earned income when they’re calculating how much you can afford to borrow.
- How difficult is it to prove the total value of my income? Lenders who are willing to accept overtime and shift allowances are usually quite reasonable when it comes to providing proof of additional income. While requirements may vary between lenders, most will accept your last group certificate, copies of your last few payslips and a letter from your employer confirming that you have been regularly receiving overtime, loading, shift allowances, etc for a specified time period.
- I’m a paramedic, but I receive income from a second job – will this additional income count? Emergency services personnel doing regular shift work will, at times, have some form of second income and there are lenders out there who understand this. These lenders will often accept 80% or even 100% of the income generated by a second job, but usually with the proviso that the second job is still in the same line of work. So, a paramedic who also works as a first aid instructor would be able to include the additional income in their mortgage application.