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Can I get Approval for my Home Loan Amidst this COVID-19 Crisis?

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  • Can I get Approval for my Home Loan Amidst this COVID-19 Crisis?

The quick answer to this question is Yes. Based on the data published by the federal government, more than 1 million people will be unemployed in the coming time. We are about to see such a time only because COVID-19 has affected the economy very badly. The effects of this virus are widespread, but here, we will talk about home loan borrowers in particular.

The people seeking home loans are concerned about it because the lenders are coming with strict rules for approving a home loan. The policies governing home loan approval have changed so much because whole new factors are now considered for it. Take a look at the new conditions to get a home loan approved.

Income types

The main deciding factor is the income type nowadays. Due to the dwindling situation of the economy, the lenders are quite worried about whether the borrowers will be able to repay the loan or not. All those whose income is not stable as per the laws of the lenders have a higher risk of getting their loans approved. Here are the types of incomes that are considered unstable income:

  • Bonus income
  • Casual income
  • Workers on probation
  • Overtime income
  • Commission income
  • Contract income

Any employee whose income type falls in one of the categories mentioned above can face problems in getting his/her loan approved.

Living expenses

Living expenses will also be considered in the approval process. They will check your living expenses in the last 3-6 months. Many people started purchasing new things as they feared the shortage of materials in the market. And if you are also the one who spent money in the same way that we are talking about, getting approval will be difficult for you.

Rental income

The rental market is completely unstable at this time. Anyone who is relying on income from rent should know, that this kind of income will not be considered income anymore.

JobKeeper payments

In case you are getting any financial aid from the government, such a source will not be considered as ongoing income. Mentioning JobKeeper payments as a source of your income is not good.

As the JobKeeper was provided to only those whose income fell by at least 30% due to COVID-19. Such a significant fall in your income is not going to help you in getting approval.

Important questions that you can expect from them

Lenders are looking for security in terms of your income. They are going to ask you a lot of questions. All these questions are to check the status of your income amidst this pandemic. Such questions help them a lot in knowing your repayment capabilities. Here are some of the most probable questions.

  • Have you got any message from your employer about reduced hours as an impact of COVID-19?
  • What’s your job status, and is it affected by COVID-19? If Yes, then how?
  • What are the impacts of COVID-19 on your business?
  • Have you lowered the rent income from any of your properties?
  • Are there any plans that you think would affect your financial situation?
  • What do you think about returning to your normal financial situation?

Employment check

The process to check your employment is done just a few days before the approval of your loan. It is done to check whether you are still doing your job as you described in the form. You are going to be in trouble if you fail in this employment check. Here are some questions that you can expect from it.

  • They may ask if you are still employed, and they can also call your employer.
  • You will also be required to fill out a form about it and produce the last payslip.

How can you get this approved?

Based on the things mentioned above, you must have known that your income is the thing that matters the most here. If you want to grab the safe spot, you should submit several documents for it. Take a look at the documents you should submit:

  • Submitting only payslips is not enough. You should submit your PAYG income summaries.
  • If you are self-employed, you need to submit even more documents about your income.
  • For those who rely on rent as their source of income, you need to provide at least three years of your rental income history.

The time involved in this process

This is one of the most important things to know when you are getting your loan approved. In most cases, this process can take up to 20 business days.


After considering all the factors mentioned above, if you think getting approval is almost impossible, you are wrong. This can be one of the greatest times to get a loan. Right now, you can find fixed-rate home loans at the lowest interest rates. The government has also given several incentives and financial aid for first-home buyers.

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