You can work for the same builder every week, receive regular payments and still have a home-loan application that looks nothing like an employee's. If you invoice through your own business, the amount arriving in the account may need to cover materials, insurance, vehicle costs and other expenses before it supports the household.
For a subcontractor, the first useful step is to explain how the work is arranged and what the income represents. The right lending route follows from that, rather than from the word 'contractor' on its own.
A contract does not tell the whole story
A fixed-term employee and a business owner supplying services under a subcontract can both describe themselves as contractors. Their evidence can be quite different. Government guidance also makes clear that an ABN alone does not decide whether someone is legally an employee or contractor. Get advice if that status is unclear; a home-loan application should describe the actual arrangement.
For a lending discussion, explain who pays you, whether tax is withheld, who meets the operating costs and which entity receives the money. If you have a contract, include the payment terms and end date. If work is assigned job by job, show the history rather than describing an uncommitted pipeline as guaranteed income.
NAB's guidance on irregular income emphasises consistency and continuation, and notes the value of contracts or longer-term client agreements for self-employed applicants. That is useful preparation, not a guarantee that the face value of a contract becomes accepted annual income.
Start with full-doc options when the records support them
If your business has completed tax returns and financial records, have a full-doc assessment considered before assuming you need specialist finance. The lender needs to distinguish business receipts from earnings and account for the debts that remain payable.
A subcontractor with significant materials or labour costs can have the same turnover as a consultant with few operating expenses and a very different amount left over. Explain the economics of your work. Do not use a transfer to your personal account as another income stream if it is simply a drawing from the same business earnings.
Where the conventional document route does not fit, an alt-doc option may be worth investigating. Pepper Money's Alt Doc route, for example, describes a financial-position declaration with supporting records such as business bank statements, BAS or its accountant letter. Separate business-history and eligibility requirements still apply.
The trade-off needs a quote. Compare any extra rate or fees with the benefit of a workable evidence route. Alt doc should solve a real problem, rather than add cost to an application that could qualify another way.
Explain what happens between jobs
A strong month is encouraging, but the household still needs to pay the mortgage when a project finishes or an invoice is late. Prepare a simple history of the work, receipts and gaps. Explain an unusual interruption rather than leaving the assessor to infer that it happens every year.
Keep future work separate from work already contracted, and contracted work separate from money received. Those distinctions make the discussion clearer and your own budget more useful. They do not require a lengthy business plan.
Turn the evidence into a lender decision
Before applying, bring the current contract or work arrangement, recent business records, available tax returns, registration dates and existing debt commitments. Ask which assessment route is proposed and what income the lender would need to establish.
If the issue is a recently started business, read our short-ABN guide. If the issue is income that changes through the year, our variable-income guide covers that separately.
Flexdoc can assess your subcontracting arrangement and available evidence. The immediate goal is to establish the right income route, then compare suitable home loans on cost and features.
General information only. Your circumstances have not been assessed. Lending criteria, terms, fees and approval apply. Seek appropriate tax and legal advice.