Q: What are the factors from the nature of my work that can affect how much home loan I can borrow?
- Employment type
The type of employment you have can have an impact on how much home loan you can borrow. If you’re a full-time employee with a regular salary, you may be viewed as a more stable borrower and may be able to borrow more than someone who is self-employed or a casual worker.
If you’re self-employed, lenders may require you to provide additional documentation to verify your income, which can make it more challenging to get approved for a loan.
- Income level
Your income level will also play a role in determining how much home loan you can borrow. Generally, the higher your income, the more you’ll be able to borrow.
If you have a high income, you may be able to borrow more than someone with a lower income, even if you have the same employment type.
The industry you work in can also affect how much home loan you can borrow. If you work in an industry that is viewed as stable and secure, such as healthcare or education, you may be able to borrow more than someone who works in a more volatile industry, such as hospitality or retail.
Lenders will also take into account the demand for your skills and the likelihood of your income continuing in the future when assessing your loan application.
- Contract type
If you’re on a fixed-term contract or have a probationary period in your employment, this can also affect how much home loan you can borrow. Lenders may view your income as less stable, and you may be required to provide additional documentation to prove that your income is likely to continue.