Anyone working in the education sector in Australia is likely aware that finding the right home loan can come with unique challenges. Some teachers may be employed on a casual basis, meaning their earnings drop significantly during each school holiday period.
Others will regularly receive overtime payments or a Higher Duties Allowance, which not all lenders will include when evaluating income. Fortunately, there is a range of lenders available who appreciate the special circumstances of those working in education.
These lenders are willing to think outside the box when it comes to accurately assessing a teacher’s income, even offering special incentives to those in the field of education. To make sure you get full access to all of these benefits, speak with a mortgage broker who has experience in helping those in education find the right home loan.
If you’re currently working as a teacher and you’re considering taking on a mortgage, you may be grappling with a few questions, such as:
- What if I’m working as a teacher on a casual basis? This has traditionally caused problems with some lenders because they view casual teachers as being effectively “unemployed” during the summer holidays. But the good news is, some lenders take a more reasonable view of casual teachers and these will generally approve applicants provided they’ve been in the same position for more than 3 months and can provide proof of stable income across this period.
- I also work as a tutor after hours – will lenders accept this additional income? If you’re a teacher and you have a second income, then this will generally be accepted so long as it is in the same line of work (so, working as a tutor is fine). Lenders will require proof that this income is continuous for at least the last 6-12 months, although if you’re self-employed they may want records going back 2 or even 3 years.
- I’m still working on probation – does this mean I won’t be eligible for a home loan? You may still be able to secure a home loan, even if you’re working on probation. This will partially depend on what your credit history looks like and whether or not you meet all of the other eligibility requirements for the loan. But these get approved every day!
- Will a lender accept my Higher Duties Allowance or regular overtime as income? Lenders are often willing to accept teacher overtime or Higher Duties Allowance, provided the applicant can prove that this is an ongoing part of their income. A letter from your employer, along with consecutive payslips demonstrating the added amounts, will often be considered sufficient proof.
You may find that over the summer period, you have some time to review your current home loan set-up.
Start 2020 the right way. Get your ducks lined up and make a move to improve your interest rate and or your set-up so that you can pay off your loan faster.