Working as a FIFO mobile plant operator comes with unique financial challenges that can make buying your first home feel like an uphill battle. While your income might be substantial, the irregular pay cycles and employment structure can create complications that traditional first time home buyer programs don't always account for.
Let's dive into the most common mistakes FIFO workers make during their first home loan application process and how you can avoid them.
Not Understanding Your Borrowing Capacity
Many FIFO workers overestimate or underestimate their borrowing capacity due to the nature of their income. Unlike salaried employees with consistent monthly pay, your earnings fluctuate based on rosters, overtime, and contract renewals.
Lenders assess FIFO income differently, often requiring:
• 12-24 months of consistent employment history
• Detailed bank statements showing regular deposits
• Confirmation of ongoing contracts or roster arrangements
• Evidence of your base salary versus allowances
The mistake here is assuming your peak earning months represent your borrowing capacity. Lenders typically average your income over time, which might be lower than you expect.
Choosing the Wrong Loan to Value Ratio (LVR)
First home buyers often rush to secure a property without considering the implications of their loan to value ratio. While you can borrow up to 95% of a property's value, this means paying lenders mortgage insurance (LMI), which can add thousands to your loan amount.
For FIFO workers, this becomes particularly important because:
• Your income variability might make higher LVR loans riskier
• LMI costs can be substantial on higher loan amounts
• A lower LVR gives you access to interest rate discounts
• Some lenders offer more favourable terms for borrowers with larger deposits
Failing to Shop Around for Interest Rates
One of the biggest mistakes is accepting the first interest rate offered. Whether you're considering a variable interest rate or fixed interest rate, different lenders view FIFO income differently. Some banks might see your employment as high-risk, while specialist lenders understand the FIFO industry and offer more competitive packages.
Home Finance & Mortgage Brokers can access Home Loan options from banks and lenders across Australia, giving you a broader range of choices than approaching banks directly.
Not Taking Advantage of First Time Home Buyer Schemes
Australia offers several first home owner grants (FHOG) and first time home buyer schemes that can significantly reduce your upfront costs. These benefits vary by state and include:
• Stamp duty concessions or exemptions
• Cash grants for eligible properties
• Shared equity schemes
• Deposit guarantee programs
Many FIFO workers miss out on these opportunities because they don't research what's available in their chosen location or assume they don't qualify due to their income level.
Inadequate Financial Documentation
The application process for FIFO workers requires more comprehensive documentation than standard applications. Common mistakes include:
• Providing incomplete bank statements
• Not explaining gaps in employment clearly
• Failing to document allowances and their consistency
• Missing evidence of upcoming contracts or roster confirmations
Lenders need to understand your financial situation thoroughly, so incomplete documentation can delay approval or result in rejection.
Ignoring Your Complete Financial Picture
Many first home buyers focus solely on the loan amount without considering ongoing costs. For FIFO workers, this oversight can be costly because:
• Property maintenance might be challenging during fly-out periods
• You might need property management services
• Travel time between home and work locations affects living costs
• Investment loan options might be more suitable for some FIFO situations
Not Getting Pre-Approved
Entering the property market without pre-approval puts you at a significant disadvantage. Getting pre-approved helps you:
• Understand your actual borrowing capacity
• Move quickly when you find the right property
• Negotiate from a position of strength
• Identify any documentation issues early
For FIFO workers, the streamlined application process that comes with pre-approval is particularly valuable because it reduces the time pressure during property settlement.
Overlooking Offset Account Benefits
Many first home buyers don't consider the long-term benefits of an offset account. For FIFO workers who often receive large lump sum payments, an offset account can:
• Reduce interest payments significantly
• Provide flexibility for irregular income patterns
• Help build equity faster
• Maintain access to funds for emergencies
The FIFO Advantage in Property Investment
Some FIFO workers make the mistake of not considering their first investment property alongside their home purchase. Your income level and employment structure might make investment loan options attractive, particularly if you're working in remote locations and don't need to live near major cities.
Access to banks and lenders nationwide means you can consider properties in different markets, potentially maximising your investment returns while securing your first Home Loan.
Avoiding these common mistakes requires expertise in both the property market and FIFO employment structures. Working with mortgage brokers who understand your industry can make the difference between a smooth purchase and a stressful experience.
Call one of our team or book an appointment at a time that works for you to discuss your specific situation and explore the home loan options available to FIFO mobile plant operators.
