Expat and foreign home loans are created for Australian citizen and permanent residents, who are currently living overseas, to secure and purchase a property in Australia, even while working outside the country. Refinancing an existing loan is also possible through an expat lending. Although most banks do not offer such mortgage loans for expatriates, there are many lenders that understand and provide financial solutions for Aussies working and living abroad.
There are qualifications and necessary documents required to secure expat and foreign home loans. Asking the right questions will help you understand how such mortgage loans work. Here are some of the essential question you may have in mind and need to ask prior to applying for an expat foreign home loan.
Are you an Australian citizen or permanent residence holder living overseas?
Australian residents and permanent residence holder living and working abroad are qualified to apply for an expat foreign home loan. Foreigners with permanent residence status living or working abroad are also qualified for a mortgage loan. Both Australian citizens and permanent residence holders can avail up to 90% of the property value through an expat foreign home loan.
Are you an Australian citizen living in New Zealand?
Australian expats living in New Zealand can also avail of a home loan even while working out of the country. Expats or PR holders living and working in New Zealand are also qualified with a home loan equivalent to as much as 90% of the property value. Some lenders may also implement tax rates of New Zealand, while others may stick to the tax rates implemented in Australia.
Are you married to a foreign citizen?
Being married to a foreign citizen may or may not help you with your application for an expat mortgage loan. Your wife or husband’s income may not be included as a detail in your mortgage application if they do not have a permanent resident status.
Although some lenders may include your spouse’s income in your loan application if your foreign partner has a visa and living in Australia, if you are married or have children together or if they have families and relatives in Australia.
How much is your income?
Your income also plays a big role in your mortgage application. The higher your income is, the more you become capable of returning a loan or being granted a high mortgage amount. Proving your income is another aspect to keep in mind.
Documents will be required to prove your income. Lenders will require you to provide employment contracts, letters from your employer, bank statements, pay slips and tax returns. Self-employed individuals are required with a different set of financial documents.
Are self-employed individuals qualified?
Self-employed Aussies living abroad may also apply for an expat mortgage loan. Financial documents that will prove your source of income, as well as tax returns, are some of the basic documents lenders will ask from you. If your tax returns are unavailable, you may need to hire an accountant to verify that these documents are indeed unavailable.
Is your current currency acceptable?
Banks and lenders prefer a set of currencies for mortgage loan applications. However, if your current currency is not on a list, you may still be qualified for an expat mortgage loan but will be required to pay for a higher amount of deposit. Some of the main currencies preferred for expat home loan payments are:
- US Dollar
- Canadian Dollar
- Japanese Yen
- Singaporean Dollar
- Swiss Franc
- Danish Kroner
How much deposit do you need?
Most banks and lenders will require a 20% deposit for your home loan. However, you may be required to pay for a smaller or bigger percentage, depending on your financial situation and the assessment of the bank or lender on your application. Earning with a currency not included in the preferred currency list of the lender may require you a higher than 20% LV. Better credit standing and other factors may require you for a lesser deposit.
How much interest rate will you pay for an expat foreign home loan?
Interest rates differ from lender to lender. It can go as low as 3.5% or as high as almost 5%. It all depends on the type of mortgage loan you apply for (variable or fixed) as well as how long you intend to pay for the loan.
Do I need to visit the Australian Embassy?
Some lenders will require you to appear in the Australian Embassy to sign a formal loan letter. Most lenders do not recognize Power of Attorneys, so you’ll have to attend to this personally.
Do I need the Foreign Investment Review Board approval?
You do not need the government’s approval or any approval from the Foreign Investment Review Board to apply or to acquire an expat home loan.
How much surcharge on stamp duty will I have to pay?
Paying for a surcharge on stamp duty depends on which state you intend to purchase a property. Check with your state revenue authority to determine if you are exempted from paying surcharge stamp duties.
How can a loan specialist help?
A loan specialist like Intellichoice Finance makes your loan application easier. Our loan experts will connect you with lenders and banks that suits your financial capacities, prior to our preliminary assessment. Documentations and other requirements that can be furnished by our loan specialist for you will cut your work in half.
Speak to our property and home loan advisors on 1300 55 10 45 or visit our contact page for more information.