PAYG IT Contractor - Home loan

Bigteether · Sep 09, 2020 1:01 pm

Hi,

Looking for some advice regarding my scenario of loan. I am an IT contractor with NSW Government (full time not permanent) and have been working in Sydney from June 2018.

I am on PAYG by a staffing company and work for the NSW Government. I always had rolling contracts of 6 months and some times 3 months, whenever the contract is extended. My current contract ends on Dec-2020. I am sure my contracts will get extended on end of december but will get extended contract only by end of december.

I recently found a House and Land package for 800k and would like to move forward with loan at LVR 90% so that I don't liquidate my savings and provide less deposit. I also have CBA pre-approval valid for next 6 months. the builder might provide the signed contract of Building and Land by October 1st week.

Will my loan be approved if I apply on october 1st week. I am bit worried will the contract end date spoil my chances. No debts or other loans, clean credit, annual taxable sal from contracting is 200k+. Looking for your feedback

becjarrettdalton · Sep 09, 2020 1:26 pm

Hi Bigteether,

This is challenging at the moment as appetite for contractors is not as good as it was pre-COVID, however all is not necessarily lost. The biggest hurdle as you have anticipated is the contract expiring less than 3 months after the approval date.

Can you - seek an early extension to the contract?
Are you contracted directly or through an agency? Direct contracts - where they pay your tax and super especially - are being treated more favourably than via an agency.

If you pay your own tax and super you will likely be treated as self employed as well and additional criteria may come into it.

Short answer, it isn't impossible but it will be challenging. CBA is probably your best home for this at the moment - my other choice pre-covid would be ING (but they don't do construction and presently not doing casual contracts so thats two crosses) and perhaps Adelaide Bank.

Also - the more deposit you have the easier it is done, and you could possibly draw down on equity in future if you did need your savings back.

Good luck!

Bigteether · Sep 09, 2020 2:15 pm

Thanks Rebecca, early extension of contract is impossible as it is government. I contracted through Randstad with PAYG. Definitely will not fall into self employed. Have been contracting with the same NSW government team for the last 2 yrs with rolling contracts with full time work and no breaks. Will try it out thanks and appreciate your time to provide feedback.