Home Loan on Centrelink Benefits
How to get a home loan on Centrelink Benefits
Can you apply for a home loan on Centrelink Benefits as income? What are the chances of approval? Some people think there is no chance of getting a home loan on Centrelink as the only income. While each financial circumstance is unique, in Australia, getting a home loan on Centrelink is actually possible. Read on to find out how to buy a house as a Centrelink beneficiary.
Read also our article on: 6 ways to Boos your approval of getting a home loan >
What is a Centrelink home loan? How does it work?
A Centrelink home loan per se is non-existent. It is like any home loan that pledges Centrelink benefits as part of a borrower’s income. The lender may approve the loan based on certain conditions. The key is to present a primary source of income with Centrelink benefits as supplemental income. If you apply with a partner who has a steady income, the joint application boosts your chances of getting a home loan.
Centrelink benefits that are acceptable as supplementary income
A Centrelink home loan can be restrictive. Not all Centrelink benefits are acceptable as part of income, but certain types of government benefits may get approval:
Family Tax Benefits
Family Tax Benefits (FTB) Part A and B are acceptable to most lenders with certain conditions. FTBs of Home loan applicants with children over 11 years old do not meet the requirements. Also, get ready with your most recent Centrelink statement. You must scan or photocopy all pages, including the blank ones.
Child Support Income / Maintenance
Most lenders will consider child support or child maintenance as part of income. You should divulge pertinent information like a court order, a channel of payments (i.e., paid thru the Child Support Agency), and regular child support payments for the last six months.
Prepare documents like a letter from the Child Support Agency (CSA), a letter from the solicitor, bank statements showing credits to your bank account, and a copy of the Family Law Courts Order.
Pensions of Veterans and Widows
The pensions of Veterans and widows may be acceptable as an additional source of income. You must provide the latest copy of a statement from The Department of Veterans Affairs showing your name and pension payments. Secure bank statements showing credits to your bank account from a government entity.
Disability pension is a legitimate source of income but may require an additional source to support the ability to pay.
Other government benefits
Age Pension, Carer’s Allowance, and Foster Care Allowances may be acceptable only as supplementary income
Single Parents on Centrelink
Single parents on Centrelink may secure a home loan, but there must be proof of a stable job providing a steady source of income.
Self-employed on Centrelink
Self-employed individuals receiving Centrelink payments may get home loan approval, but it is easier for employed individuals in a traditional employment setup.
Credit score matters when applying for a Centrelink home loan. Lenders look at a high credit score as an indicator of repayment capability. You can improve your credit rating by lowering existing credit card limits and paying off debts.
Documents to prepare for a Centrelink home loan
- Bank Statements
Bank statements tell a story. Lenders would like to look at your current financial situation via bank statements. A high average daily balance is an indicator of financial stability.
- Proof of Identity
Only government-issued identification cards are proof of borrower identity and legitimacy.
- Payslips / Income Tax Return
Payslips are valid proof of a legitimate job. Lenders would like to check if the borrower is a regular employee. The latest Income Tax Return must be available for self-employed individuals or entrepreneurs.
- Centrelink Statements
Centrelink statements show how much you earn from government benefits. Lenders can gauge your additional source of income from these statements.
Get the latest news about Centrelink home loans. Talk to your mortgage broker about how to get approval for a home loan >, or check out more options at Makes Cents today.