You’re one of many Aussie expats earning a crust abroad. Sure, your lifestyle comes with some perks, not to mention being able to explore the world! But, it’s likely that you see the sum of your endeavours as a justifiable sacrifice in securing your financial future. That’s why you’re focussed on securing a loan to buy some real estate back home. It’s all a part of your plan in putting down roots and getting your money to work for itself. But getting Australian expat home loans can be daunting.
Read on to discover six things Australian expats should do to secure a home loan.
Like with most things in life, it’s crucial not to jump in headfirst – especially when you don’t know your depth. Before you explore home loan requirements and compare loans, let’s take a minute to debunk a couple of common myths. Then, you should feel much more confident about going ahead with your home loan journey.
The perception that there is a crackdown on expat lending is mostly misleading and is based on generalisations. While it’s true that most lenders have toughened the criteria for foreign investors of Australian property, Australian expats do not fall into this category.
Also, you won’t need to obtain approval from the Foreign Investment Review Board. This is applicable to foreign investors and temporary residents only. It doesn’t refer to Australian expat home loans where you just want to buy a house back home.
Whilst there’s good news for those Aussie expats seeking a home loan, it’s still important to be realistic about all factors that come with the territory. You will be subject to certain conditions in all instances where you earn money in a foreign currency.
For example, the fluctuating nature of foreign currency exchange rates means that most lenders will want to manage this risk. In assessing your application, they will usually take just a percentage of your entire overseas income into consideration. They’ll also factor in foreign tax rates and any foreign debts and liabilities.
Keep in mind that each loan provider will have their own approach to assessing foreign income. So, it’s important to do your research and shop around.
There are some common parameters in expat loans. These statistics can help you to know what to expect when seeking out a home loan:
Also, you’ll find that some types of foreign incomes are more readily welcomed than others. When it comes to Australian expat home loans, the following forms of foreign currency are commonly accepted:
You will need certain forms of documentation to proceed with an expat home loan. It’s advisable that you keep the following information in an accessible location and maintain its validity, where possible:
With an expat home loan, the amount you can borrow and the conditions of your loan contract will differ – depending on the individual lender involved. This makes having access to a wide variety of banks and non-bank lenders so important in finding the most suitable loan for your personal situation.
For example, some lenders will use the tax rate of the country that you reside in as an expat (rather than Australian tax rates). This may improve your borrowing power. Look past the obvious options, like the major banks, to get the most competitive rate.
We’ve left this til last, but this is probably the most important of all the things that Australian expats should do to secure a home loan. All points so far lead to one logical conclusion: the benefits of using a good broker cannot be underestimated.
A broker can help you to access specialist lenders that are expat-friendly. It’s reassuring to know that you can have a rewarding relationship with a finance specialist, even when you are located off-shore. They can facilitate the entire process of securing an Australian expat home loan. So, you can rest easy knowing that not a single set in the process will be missed.
Stapleton Finance is your expat finance specialist in Australia. We’d love to help your money work for you here in Australia while you’re living and working abroad.
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