Many people believe that low income earners – and those who rely on government benefits – are not eligible for home loans. But that’s not always the case. If your household income is supported by Family Tax Benefits (FTB) from Centrelink, the good news is, there are still lenders who will consider this type of home loan application.
The key to success is working with a mortgage broker who understands which lenders to approach. Read on to find out what you need to know about using non-standard income to access home loan lending.
Family Tax Benefits (FTB)
Family Tax Benefits (FTB) is a fortnightly or annual government benefit payment designed to help Australian families who earn a low annual household income, to cover basic living costs for themselves and their children.
Those eligible can claim FTB Part A - a payment received for each child – and/or FTB Part B – a payment that helps single parents and families with one main income. The amount received is dependent on income, number of children, and age of children.
For information about eligibility criteria and payment amounts, refer to the Services Australia website.
At Mortgage Express, our mortgage brokers work with a number of lenders that will consider different sources of income when evaluating home loan applications. However, in order for lenders to accept FTB as an additional source of income, applicants will still need to meet standard lending requirements when it comes to income, assets, credit history and overall ability to repay a mortgage.
In addition to this, lenders will consider the age of your children and how much longer you’re likely to receive FTB payments. This is especially relevant if your children are over the age of 11.
“Most lenders will have limitations on the age of children when it comes to Family tax benefits income. I find ANZ has a very generous policy in this space. The amount you receive is directly related to your income and sometimes that can be an unreliable source. However, very often it gets you over the line,” says Jay Jayasuriya, Mortgage Express mortgage broker.
Just like standard home loan applications, the amount you may be eligible to borrow and the interest rate you will be charged will be determined by your overall income, which will include the payments you receive from Centrelink. If FTB is your sole source of income – for example, if you’re a single parent with children – Family Tax Benefits may not be enough income to meet lenders’ serviceability criteria.
“Generally my go-to where clients are reliant on Family A & B is ANZ as they will allow the use of Family Tax A & B as long as they are still in receipt of the payments. Bluestone will also allow for children of all ages. Bank West will consider for children under age 15 while most lenders want to see the payments will be ongoing for a further 5 years,” says Doug Owens, Finance Broker.
When it comes to including non-standard income – like FTB – in your home loan application, it’s vital you get the right advice, as there are only a few lenders that accept Family Tax Benefits as a source of income when assessing home loan applications.
Mortgage Express mortgage brokers are experienced at working with a range of lenders and can help you find a financial solution if you receive government benefits as part of your household income. Contact us today to find out if you could qualify for a home loan with non-standard income sources.
While all care has been taken in the preparation of this publication, no warranty is given as to the accuracy of the information and no responsibility is taken by Finservice Pty Ltd (Mortgage Express) for any errors or omissions. This publication does not constitute personalised financial advice. It may not be relevant to individual circumstances. Nothing in this publication is, or should be taken as, an offer, invitation, or recommendation to buy, sell, or retain any investment in or make any deposit with any person. You should seek professional advice before taking any action in relation to the matters dealt within this publication. A Disclosure Statement is available on request and free of charge.
Finservice Pty Ltd (Mortgage Express) is authorised as a corporate credit representative (Corporate Credit Representative Number 397386) to engage in credit activities on behalf of BLSSA Pty Ltd (Australian Credit Licence number 391237) ACN 123 600 000 | Full member of MFAA | Member of Australian Financial Complaints Authority (AFCA) | Member of Choice Aggregation Services.