Australian Expat Home Loans

Lenders will calculate a person's borrowing power based on the following conditions:

• For those working in a country that does not charge income tax, the lender may use Australian tax rates.
• For expats with foreign loans, repayments may be considered in determining the borrowing power.
• You're allowed to borrow up to 80% of the value of the property.
• However, you need to be an Australian citizen or a permanent resident living in New Zealand or overseas. Your actual income will also be assessed.

Meanwhile, if you don't fit the mentioned conditions, you can still borrow up to 80% of the property value. There are some aspects, however, including the following, which all have an effect on the amount you are allowed to borrow:

• The country where you currently live in
• How much you're earning and in which currency
• The status of your visa

Extra things to consider:

• The exchange rate will also affect how much you will get once you have been approved.
• If the country you're in is not in the preferred list of the lender, that currency may not be accepted.
• It' is important to learn how the exchange rate will be imposed
• There are no negative gearing benefits for expat borrowers.

It can be difficult to find attractive interest rates if you live overseas;however Quantum Finance Australia understands expat home loans & what good rates look like in the current market.

Let's not forget about tax rates, either. 

• Many lenders make it simple by using Australian tax rates instead of the rates of the country where you work.
• Unfortunately, tax rates in Australia are among the highest in the world. That means you could get less than what you need because the taxes will be deducted from the amount you will borrow.
• It will not matter if you are in Singapore or Hong Kong that has very low taxes. Even if you are in the UAE, where taxes are not required, you will still have to pay Australian tax rates.

If deemed an advantageous; Quantum Finance Australia may endeavour to  find a lender that uses foreign tax rates if it is what you wish for. However, we require that you provide as much income proof as you can. That way, we can provide you with a lender that will use foreign tax rates based on the withheld taxes from your payslips.

You should know about the following possible expenses:

• Deposit: You may be asked to provide a 20% deposit. The deposit should typically be in the form of genuine savings, such as savings accumulated over the last three months or more. If you provide a big deposit or you are a real estate owner in Australia, your deposit can be the equity on your existing property. An exception is if your parents have a property in the country, and they can act as your guarantor for the home loan. In this instance, you may not need to provide a deposit.
• Leaders Mortgage Insurance: If you are an Australian living overseas; you are not eligible for Lender Mortgage Insurance (LMI).
• Others: You will also have to pay for stamp duty, mortgage set up costs, legal fees, and other property purchasing costs.

To see how much you need for these extra costs, let's have an example:

• The property that you wish to buy is valued at $500,000. You are allowed to borrow 80% of that value.
• You will then have to provide $100,000, which is for the deposit.
• For this amount, the stamp duty is $20,000 and the transfer fee is around $268.20.
• You still have to add mortgage registration, which is $178.20, along with legal and other fees. The figures here will depend on the lender.

As an Australian expat, you're earning an income from a different currency. Therefore, you should first know if the lender accepts whether that currency is accepted.

Most of the time, the following currencies are accepted by lenders:

• US dollar
• Hong Kong dollar
• Canadian dollar
• Singapore dollar
• New Zealand dollar
• Great Britain pound sterling
• Euro
• Swiss franc
• Japanese yen

If you earn from any of the above currencies, your application has a better chance of getting approved. Many lenders also accept Chinese renminbi (yuan); however, stricter conditions apply. For example, some lenders will limit the amount you can borrow to below 80% loan to value ratio (LVR).

Other currencies with the same restrictions and requirements include:

• Bahrain dinar
• Fijian dollar
• Indian rupee
• Kuwaiti dinar
• Malaysian ringgit
• Norwegian krone
• Oman rial
• Philippine peso
• Saudi Arabian riyal
• South Korean won
• Thai baht
• Vietnamese dong

Please note that the currencies listed above are not exhaustive. If yours is not listed, it's still highly possible that lenders will accept your application as an Australian expat.

You will need to provide foreign tax returns or payslips. If they are in English, these documents can readily be accepted as proof of income. If they are in a foreign language, the lender may have to seek translation services. Your application can take longer than usual.

• You will most likely be asked to give your bank statements for the past three months, which should show your salary is deposited into your account.
•  You will also have to own a valid work visa for the verification process.
• If you're a dual citizen or you have proof that you can work in the country you're in, you may no longer have to provide a work visa.

Some expats earn in more than one currency. If you are among them, you should pick the more dominant or preferred currency, which is one of those we have listed above. That way, you have an even more significant chance of getting approved.

Remember, however, that the exchange rates are different. These rates apply when you borrow money to buy a house, which can affect the amount that you can actually receive.

Unfortunately, not many lenders accept applications from self-employed individuals. There are some options available, but those with an employer have more flexible choices. That's because lenders view PAYG income overseas as something more manageable to evaluate than self-employed ones.

If there is a suitable lender, you may be able to borrow up to 80% of the property value. However, you should meet all the requirements, including the following documents:

• Tax returns for the business and the owner for at least two years
• Six months' worth of bank statements
• Income verification letter signed by an accountant

If you're an Australian citizen overseas and married to or in a civil union with a foreign citizen, your application will be assessed differently:

• Some lenders may take you and your partner as Australian citizens.
• Some will consider you both as investors from another country.
• Other lenders pick the one with the higher income as the principal borrower and nationality.

If you're the main earner, your partner's income will usually be ignored. Most of the time, the Australian citizen's income is assessed. However, if you believe that you will benefit more if your partner's income is considered over yours, you can turn to a broker to help you out. Here at Quantum Finance, we can help you find a suitable lender for your case. We do have specific requirements, and you can have the upper-hand if you meet them all, such as:

• Your partner holds a valid Australian visa.
• Your partner lives in Australia, particularly when you send out the application.
• The other person has relatives in Australia.
• You two are legally married or in a de facto relationship for more than two years.
• You have children together.

Please note that you may have to pay foreign citizen stamp duty when you get a home loan with a non-Australian citizen.

The short answer to the question is "yes." It is necessary to have your ID certified by going to the Australian consulate or embassy in your current country. Some lenders will accept a Power of Attorney, which gives a trusted person, such as a family member, to sign the required lending documents on your behalf if you're overseas.

Some lenders need you to have a POA as part of their requirements, while others may not accept the document. In the event that the lender does not allow a POA, it may be such an inconvenience. You will have to send the documents from your country. Also, you should attend the Australian consulate to have a legal witness.

If you're borrowing with your significant other, only one of you needs to go to the embassy. However, you should bring your partner's passport with you.