Banks are becoming more open-minded about the income types they are considering, it has been claimed.
Mortgage broking franchise Smartline's managing director Chris Acret has said as more borrowers pursue alternative employment arranagements, banks are being more flexible with income.
“While overtime, bonuses and second jobs used to be regularly accepted by lenders, unfortunately this changed when the GFC hit,” Acret said.
“Those with casual or contract employment or who were self-employed also found it much more difficult to secure home financing as banks becoming very risk adverse.
“Thankfully, lenders are increasingly ‘normalising’ their lending criteria and while we haven’t yet returned to pre-GFC levels, it’s moving in the right direction,” he said.
Smartline says increasing numbers of Australians are pursuing contract or casual employment, are self-employed or work two or more jobs to earn their desired income.
Lenders are considering the income of a person working in temporary, casual or contract position after three months, particularly accountants, teachers, nurses or engineers.
Acret said the banks’ revised view on income types made sense in light of changing work practices.
“The full-time position that was guaranteed for life is slowly becoming less and less relevant as both employers and employees look for greater flexibility in the workplace and in their lives,” he said.
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