Can Gig Workers Qualify for a House Loan?
Introduction
According to research by Upwork, 20% of Americans are considering moving into freelancing and 73% have cited the reason to work remotely and flexibly as the reason why. The gig industry has risen tremendously due to COVID-19, it is expected to be worth $347 billion dollar with the rise of apps like uber eats, menu log, amazon flex, air tasker, Upwork
Why Work In The Gig Economy?
The gig economy can offer individuals flexibility and convenience. It also allows them to work when and how often they want and to balance work with personal commitments such as study, family responsibilities or hobbies.
So how does the bank treat this income?
As a freelancer, you would have to register as a sole trader with a valid ABN. This classifies your work as a self-employed person. In general for self-employed, the bank requires you to be trading under your ABN for a minimum of 24 months showing consistent income be GST registered if you are earning more than $75,000 p/year.
However, if you have a minimum of 20% deposit, some lenders will be able to help you in getting a home loan with a minimum of 12 months of active trading with an ABN. The bank would also require a minimum of two years of your tax return and notice of assessment to show evidence of consistent income
How much can I borrow?
Your borrowing power will depend on your overall income and living expenses, how many dependents you have, or any current liabilities such as credit card, personal loan, car loan, etc. Every liability will affect the amount that you are able to borrow over a span of time.
Speak to us
If you would like to find out more about whether you qualify for a home loan, speak to us at 0433 068 970.
