Can I Get a Home Loan with Commission Income in Australia?

Understanding Commission Income and Home Loans

In Australia, commission income can vary significantly, which makes lenders cautious. They often view it as less stable compared to a fixed salary. However, this doesn’t mean getting a home loan is out of reach. Lenders will assess your commission income alongside other criteria to determine your borrowing capacity.

Lenders typically require a track record of commission income to consider it as part of your application. This usually means providing two years of tax returns or other financial statements to demonstrate consistency. Each lender has different policies, so some may accept a shorter history, but generally, the more evidence you can provide, the better.

Tips for Securing a Home Loan with Commission Income

Prove Consistency and Stability

Providing evidence of consistent commission income is crucial. Lenders want to see that your income is stable and reliable. Ensure your tax returns clearly detail your commission income and consider keeping detailed records that highlight your earnings patterns.

Strengthen Your Application with Other Income

If you have other forms of income, such as a secondary job or investments, include these in your application. Diversifying your income sources can help offset any perceived risks associated with commission earnings.

Improve Your Credit Score

A good credit score can significantly improve your borrowing power. Make sure your credit file is accurate and up-to-date. Pay off outstanding debts and avoid taking on new credit commitments before applying for a home loan.

Save a Larger Deposit

A larger deposit can help alleviate lender concerns about irregular income. If you can save more than the standard 20% deposit, it can demonstrate financial discipline and reduce the lender's perceived risk.

Consider a Specialist Lender

Some lenders specialise in home loans for people with non-standard income types, including commission. These lenders may offer more flexible criteria and understand the nuances of commission-based earnings.

Common Mistakes to Avoid

• Overestimating Borrowing Capacity: Don’t assume lenders will use your highest income months. They often average your income over a period.
• Not Providing Sufficient Documentation: Lack of detailed income documentation can lead to application delays or rejections.
• Ignoring Credit Health: Failing to check and manage your credit score before applying can be detrimental.

How Esteb and Co Can Help

At Esteb and Co, we understand the challenges faced by commission-based earners. Our experienced mortgage brokers are adept at navigating these complexities. We work closely with a range of lenders, including those who specialise in non-standard income types, ensuring you have access to the best possible loan options.

We assist you in gathering the necessary documentation, improving your application’s strength, and providing tailored advice to enhance your borrowing capacity. With Esteb and Co, you’re not just getting a mortgage broker; you’re gaining a partner committed to your homeownership journey.