It depends on the lender. Income received from foster care is part of the government-provided Centrelink benefits. Banks and other lenders consider these benefits as non-traditional income, making the process of securing a loan more challenging and complex.
Finding a lender
If you are considering applying for a home loan using foster care income, you should know a few things.
1. Loans that use foster care income or other Centrelink benefits are processed the same way home loan applications using traditional income are processed.
2.Often, lenders who accept foster care income require more significant deposits.
3.Lenders who accept foster care income may have a more detailed application with stricter loan terms, including the interest rate and length.
4.In addition, because of the high risk associated with this income type, lenders may require an additional income source because you will only receive foster care income for as long as you are fostering. If you stop fostering for any reason, the lender wants to make sure they get their money back.
5.You will need to supply the standard loan documentation when applying. These documents include payslips, financial and bank statements, tax returns and identity verification.
6.Lenders may also assess your credit history. Rejected loan applications can affect both your credit score and credit history.
Finding a lender that accepts fostercare income on loan applications can take time. Trying to find a lender that fits your financial situation can be just as challenging. Each lender has specific requirements, including additional income from employment or investments, loan interest rates, fees and desired LVR, and this information may not be easily accessed when comparing lenders. Working with a broker is essential during this process. Mortgage Street is a non-bank lender. Our team of brokers can help you secure a home loan using foster care income in less time and with better terms than you could through a bank or other traditional lender.