Can't Qualify for Loans Because You Don't Have a Permanent Employment? Government Contractor Mortgage Is for You

In Australia, contractors are increasing. There are many people who are finding that contractual jobs can be a great way to earn money while making sure that they still enjoy the current lifestyle they have.

As a contractor, an individual will be able to enjoy choosing companies or organizations to work with. Some people can be very particular with people they work for or work with. Traditional full-time employees will have no say with the organizations they work for. Regardless of their personal feelings toward their bosses, they have to suck it up and continue to perform if they want to still have a job.

Contractors don't have to worry about this because they can choose their clients. This is just one of the perks of being a contractor. There are many others. One of the most attractive things about being a contractor is the potential to earn more.

Who does not want to make more money in just a few months than a full-time employee? There are individuals who work more than 10 hours each day in the office but still don't earn as much as they want. Contractors are far more fortunate in this sense.

Another thing that makes contracting projects great is there are different places to get work. The government is one. There are several industries that offer projects for contractors like mining, agriculture, IT, education, finance, health, transportation, and even public works.

But with all the advantages of working as a contractor, there will still be some disadvantages. The most common is the difficulty of getting approved for a home loan. Even though a lot of contractors earn a lot of money in their projects, it is not a guarantee that they can easily take out home loans. It's ironic because someone who has enough money to repay loans are the ones who are being refused to obtain a loan.

When it comes to taking out loans, lenders are very particular with approving loans. They have to make sure the people who are going to get money have the ability to repay the loan and, contrary to what most people think, having a lot of money in one's pockets is not going to make it easy. There are other things that will result to a loan approval.

Lenders will need to make sure that a borrower has the ability and resources to pay off the loan. That means a borrower has to prove that he has a stable employment. Lenders give utmost importance to having permanent employment because this will assure that someone will be have a continuous source of income. Since contractors are not employed permanently (they work on a project-basis) they will find it very difficult to convince lenders that they are worthy of getting a loan.

But this does not mean contractors will not have any chance of getting a home loan. The different types of contractors will be able to borrow money through a governmentcontractor mortgage. This is a mortgage product that contractors can take advantage of. This will allow people who are not permanently employed to have the opportunity to buy a house despite not meeting one of the most important requirements in taking out a loan.

If you are a sub contractor, freelancer, or self-employed and are scared of not getting approved for loans, then this is for you. There is no reason to be worried. You should learnmore about government contractor mortgage to finally get your own house. There are so many resources out there that will help you qualify for a contractor mortgage.

Freelancers Don’t Have Anything to Worry About with Buying Real Estate Because of Contractor Mortgages

Contractor mortgages are heaven’s answer to unconventional workers’ prayers.

Freelancers, or those with no permanent employment, are often looked down upon by others because, for them, freelancing is not a legitimate job.

There is a stigma to the term ‘freelancer.’ Someone who works freelance is viewed by a certain number of people as someone who cannot hold down a job, hence the instability of employment.

And because they are seen as unconventional employees who have unstable sources of income, they can be considered high-risk borrowers by financial institutions. This is why they are most likely to be denied of a mortgage application.

How does one get approved for a mortgage?

For an individual to get approved for a mortgage, several requirements need to be met.

A borrower has to, first and foremost, prove his ability to pay off the loan should he be lent some money. That means he must show proof of employment. It’s not enough that someone has a current job. It has to be long-term. Lenders don’t want to risk suffering any losses when a borrower defaults on a payment and the only reason that could happen is when the borrower loses his source of income.

This is why a solid working history is important. Lenders make sure that a borrower has a job that would provide income for the years to come since mortgages are paid off in a span of several years.

A borrower must also have a good credit score as that indicates how responsible he is with financial responsibilities. The higher score one has, the lower risk he poses to the lenders. This is why lenders approve loans easily to people with a good credit score.

Why are freelancers typically discriminated by lenders?

The reason most freelancers—writers, designers, virtual assistants, stylists, editors, etc.—are discriminated by financial institutions when it comes to mortgage application is they cannot meet the first requirement: having a stable source of income.

The very nature of freelancer is what poses a problem. People who work freelance are not bound to any company. They do not have long-term contracts. Most of them work on a project basis and don’t usually get to know if there is another project from that client.

Most freelancers won’t be able to tell if there are projects lined up for the following months.

Although a lot of freelancers earn a lot of money, the very nature of their job makes them not very good candidates for standard mortgages.

Now you could be freelancing for years and have saved up enough money to settle for a down payment but still not get approved for a loan. Don’t be surprised if this happens to you. Since you do not have a permanent employment, it’s highly possible that your requests get denied.

So what do you do?

Contractor mortgages are the answer to the problem

Contractor mortgages offer freelancers (and other unconventional workers) the opportunity to own a home. Today, freelancers are being considered by several lenders as possible candidates for mortgage applications because of the increasing number of people who are getting in this type of work.

These mortgages are similar to the standard ones individuals with permanent employment get. The only difference is these are geared towards making it easier for contractors to realize their dreams of becoming homeowners.

The process is really easy. All you need to do is look for mortgage brokers, both online and offline. These people are willing to help you find the best deals and get approved for contractor home loans. With their experience and expertise, it won’t be too long before you are signing papers as indication that you are a proud owner of a new house.