Probation Home Loan

Happy Couple who bought property using a probation loan

Probation Home Loans are available with several financial institutions in Australia. Being on probation at a new job does not mean you cannot get a home loan – this is where Mortgage Providers can help you find a Probation Home Loan to meet your needs whilst still offering the most competitive rates and fees.

What is a Probation Home Loan?

A Probation Home Loan or mortgage is a facility allowing you to take out a loan during your probationary period in a new job or career. In most cases, people on probation are unaware that they are under a grace period with their employer. This period is otherwise known in the workforce as the probationary period and generally lasts anywhere between 3 to 12 months depending on the employer or field of employment.

A Probation Home Loan is not a different product which lenders offer, but rather a policy exception which lenders allow. This means that you will get a normal type of loan, but is viewed flexibly by the assessor due to your new employment position.

Minimum employment term for a Probation Home Loan?

It is possible to apply for a home loan even if you are only one day employment into your probationary period. Some lenders will approve your loan even if you have not started your new job, provided you have a valid work agreement or employment offer in place, especially when your employment offer is from a large, well known company.

Maximum LVR for Probation Home Loan?

The maximum LVR one can apply for with a Probation Home Loan is 95% LVR + LMI on top. Hence it is possible to borrow up to 97% LVR inclusive of Lenders Mortgage Insurance. Therefore you can have your loan approved with lenders mortgage insurance. This high LVR borrowing comes only from a very small number of lenders.

Lenders for Probation Home Loan?

Different lenders having different lending policies and not all lenders will approve a Probation Home Loan. There are approximately 2-3 probation home loan lenders in Australia. Further, at high LVR’s, lenders have to get your loan mortgage insured. Whilst a couple of lenders will lend up to 97% LVR, most will stop at 80% – 85% LVR. Using a probation home, we can even have your LMI Waived at 85% LVR or get you a 85% LVR  loan with NO LMI.

Higher interest rate for a Probation Home Loan?

The interest rate for a Probation Home Loan is the same as a normal type of loan and there is generally no additional cost for a Probation Home Loan.

Genuine Savings for Probation Home Loan?

You will not require genuine savings for a probation home loan.

Short term employment and Probation Home Loan

If you have just started a job then straight out of University you have short term employment history. Chances are you will most likely be employed under a probation period with your first employer. We can still help you even if you have 1 day employment or a valid work contract.

Disadvantages of applying for a Probation Home Loan?

The main disadvantage of applying for a Probation Home Loan is that not all lenders will accept your application whilst you are on probation, therefore your pool of lenders is reduced. Further, in the event of short term employment this can lead you to a fail credit score, and minimize  your ability to obtain credit. If the case,  then we will need a lender to one that does not any credit score, which reduces your lending options.

At Mortgage Providers we know which lenders will approve your Probation Home Loan whilst still offering the most competitive home loan rates and fees – so contact us today!