WHAT IS THE GIG ECONOMY?
A gig, by definition, is a temporary job. The gig economy is characterized by people working as independent contractors or freelancers or in short-term contracts, possibly for more than one employer.
It’s a shift from the traditional trend of the employer-employee relationship towards one defined by independent workers and self-management. Think on-demand, small bites of work; think Upwork, Fiverr, Uber, Etsy, Airbnb, and TaskRabbit.
It’s where we see workers trading the security and benefits of being an employee for the flexibility of being self-employed or working on demand. These days, where there are labour shortages in many industries, gig workers are finding it easier than ever to pick up work. A recent Statistics Canada report highlights a particular uptick in digital platform employment, which connects customers and service providers through a digital platform.
What is a Gig Worker?
A gig worker can be anyone at any age. It might be someone supplementing another job or working part-time. It could be an entrepreneur who enjoys the flexibility of self-employment. Perhaps it’s someone doing what they need to do to provide for their family.
Gig workers also blur the lines of traditional roles. Students and stay-at-home moms are dipping their toes into gig economy jobs, earning on the side because they don’t have to commit to full-time jobs. They can drop off their kids at school and pick up some fares as a driver with a ride-share service like Uber.
HOW DOES GIG WORK AFFECT MORTGAGE ELIGIBILITY?
Most mortgage lenders want to see a history of consistent income with a likelihood of the same in the future. Consistent employment is the best way to demonstrate that, especially when applying for a mortgage. Good credit scores and a clean credit history can also be important, but showing a consistent and steady income is one of the most significant factors in securing a mortgage.
Gig work doesn’t provide a single, steady paycheque from the same employer, which most A lenders prefer when evaluating a mortgage deal. That doesn’t mean a gig worker can’t qualify for a mortgage. Using a mortgage broker and looking at alternative lenders are great options for people with less traditional sources of income.
Published by Bridgewater Bank