What do I need to be aware of before borrowing as an expat:
How much can I borrow?
Qualifying criteria as an expat has become dynamic, meaning that each bank has its own individual policy of what they like and don’t like to do. It is no longer as simple as it is back home where you can walk in to any bank branch and ask for a loan.
We will work through this process with you to work out your maximum borrowing capacity with each lender. This can sometimes be a case of trade-off between the interest rates you’ll receive vs the loan amount you can borrow with that lender. We’ll analyse each of these options for you and talk through them in easy to understand language by breaking down the banks jargon.
What are some of the restrictions we need to be aware of?
As each bank has its own lending criteria, each bank will have its own restrictions and nuances. For example, Lender A may only lend up to 70% on a strictly principal and interest repayment basis, while another lender may offer up to 80% and offer their full suite of products but shade your overseas income to a greater extent.
Our job is to do all of this analysis for you and find the best option that helps you achieve your goals.
Some important points to note are:
- Most banks will cap borrowing for Expats at 70% - 80% of the property value;
- Most lenders will apply a shading and/or Australian tax rates to your income which may limit your borrowing power
- Being a self-employed overseas borrower is tough, however we do have a couple of options on our panel of lenders
- We can still get interest rate discounts from lenders for overseas borrowers
- We can still provide finance for house and land packages
What will they require?
Generally lenders will require the following from you when assessing your application:
- Your last 3 payslips.
- The last 3 months bank account statements showing your salary being credited.
- Your current employment contract.
- Copy of your Employment Pass / Working Visa.
- Copy of your Passport and Australian Drivers Licence (if available).
- Bank statement showing the cash you have available to settle the remaining balance of your purchase
- Full copy of your contract of sale.
- 6 months statement of your existing loan(s) (if you are refinancing).
For Self employed borrowers, please reach out to us to discuss the terms and documentation requirements.
What settlement period should I negotiate?
If you have not completed a pre-approval or completed your ID checks then we recommend a settlement period of no less than 60 days to ensure you have enough time to get your documentation in order.
If you have pre-approval complete then you can negotiate much more freely, and we can often settle easily within 30 days.
Can I borrow with my foreign spouse?
Some banks will allow you to purchase with an overseas citizen/spouse, however they will not accept their income for the assessment of your loan. This can affect your borrowing power as you’ll need to account for their expenses and any liabilities they currently have. We can discuss these scenarios with you in more detail dependant to your individual situation.
Who can witness my documents?
This can vary a bit depending on the location of your property or the lender. For most lenders, you’ll need to have your ID certified at the Australian High Commission. There can often be extended wait times to get appointments so it is important to plan ahead.
The High commission will charge a fee for this service. The fees for these services can be found on the relevant High Commission’s website.
Otherwise, often an Australian lawyer living overseas or a Notary Public are also acceptable.
Do I need a Power of Attorney?
Some lenders have a requirement that an expat borrower must hold a registered Australian power of attorney. Whilst not necessary, by having one you open up more lender options to consider for your loan application.
They can also be helpful when signing and executing affairs back home. We recommend getting legal advice in the preparation of your POA.
How do I make my loan repayments?
Australian lenders will require that your loan repayments come from an Australian Bank account. This can either be with the lender you choose, or from your existing bank accounts back home.
We will review these options with you during the application process.
What is the cost of your services?
We do not charge any fees to you, our client, for our services.
We are a licensed and accredited Australian Mortgage broker, and we receive income from the bank we recommend to you based on the successful settlement of your loan.
We will outline all commissions we receive as part of our recommendation process, including how each lender remunerates us, and any other information you may like to request.
At Aussie Expat Home Loans, we do our recommendations based on having in-depth research and knowledge of the expat lending policies for each of the lenders on our panel. We make our recommendations based on what lender will do the best deal for you, not on the amount of commission we receive.
In practice, each lenders’ commission payments are very similar and we can promise to you that our recommendations are not influenced by the amount of commission we receive.
Our core values are centred around being honest and up-front with our advice, and ensuring we are a connector in the expat community. Therefore, ensuring you have a great experience with us and keeping our reputation in the community are the most important drivers of our business.
