How JobKeeper could affect your loan application

The Australian government initiative 'JobKeeper' was a saving grace to so many Australians in an incredibly difficult time. The payments came to a close in March this year, and despite undeniable benefit the subsidy yielded, there have been some repercussions for those wanting to borrow money this year.

At the forefront of this is the fact that many banks have made their eligibility criteria for home loans and refinancing more strict, and are not paying for attention to the details of each applicant applying for a loan. Unfortunately, some banks are not accepting Job Keeper payments as 'income', meaning that those who have relied on the payments for the last year will not have 2020/2021 financials to show to banks.

Here are some things to consider if you've been on JobKeeper and now want a loan:

  • Are you now working regular hours and receiving regular income?

  • Can you ask your employer for a letter explaining the reasons behind the fluctuations in your income?

  • Will your bank statements confirm you've been receiving a salary?

If you've answered no to any of the above, its going to be difficult to get a loan with some major banks. However, there's still good news:

You can go to alternative banks and non-bank lenders

Other banks however are accepting Job Keeper payments as income and trying to make their application process as flexible as possible for Australians who've been hit hard by the pandemic. A mortgage broker will be the best person to direct you to banks more likely to accept your application, and to get you in touch with non-bank lenders who offer more niche loan products to suit a variety of borrowers.

Key Takeaways

So, will it be more difficult to get a loan if you've been on JobKeeper? Probably. But it depends on your individual circumstances. Having a larger deposit always goes down well with banks, but ultimately their going to want solid and verifiable financial history. If you want to know your options, get in touch with us today.