Applying for an expat home loan to buy property while living overseas can be a complicated process, and it is not something an inexperienced buyer should try to accomplish alone.
The rules can vary according to the country where you now reside, and, in some cases, lenders limit the currencies and countries they will accept. Additionally, lending policies for Australian expats can be difficult to understand, and guidance from an expert is necessary. There are also cases where lenders are reluctant to work with expat borrowers, adding increased frustration to a tricky situation.
When applying for an expat home loan as an Australian expat, getting assistance from an experienced expat mortgage broker is in your best interest. Preferably one who knows facilitating offshore or expatriate loans as this can lead to a substantially better outcome. By working with Quantum Finance, you can have peace of mind from knowing your expat mortgage broker is an experienced professional capable of apprising you of all the necessary details about expats purchasing a property.
Simply put, an expat home loan is a mortgage product for an overseas Australian citizen. Expat mortgage loans can be taken to purchase property in Australia or for a property purchase in the country of residence.
Contrary to what some say, expat mortgages are not limited to Commonwealth Bank expat home loans, and private funding sources are perfectly acceptable.
A deposit is necessary for expat home loans in Australia. Typically, you will need a deposit of 10% and the funds to cover additional expenses such as,
Your deposit for the expat mortgage loan must be from genuine savings. Although various lenders may have different specifications, genuine savings usually includes,
There are a number of ways income can be proven for expat mortgages.
Not all lenders are eager to make loans to expat borrowers who are self-employed. Some factors that influence how easily you will be able to get a loan include the country where you live and the currency in which you receive your pay.
Your expat mortgage experience will be easier if you can submit:
A deposit is necessary for expat loans in Australia. Typically, you will need a deposit of 10% and the funds to cover additional expenses such as,
Lenders will calculate a person's borrowing power based on the following conditions:
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:
Extra things to consider:
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.
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:
To see how much you need for these extra costs, let's have an example:
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:
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:
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.
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:
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:
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:
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.