A Guide to Financing Property in Australia
For many years, Aussie expats living abroad could get a mortgage on Australian property quite easily. But, due to tightening credit policies and lending policy changes over the past few years, that’s no longer the case. However, that’s not to say that you can’t invest in property at home while living abroad.
If you want to take out a mortgage in Australia as an expat, here’s everything you need to know.
3 Things You Need to Know to Finance a Property in Australia
The game has changed and it’s important that you know the rules. The following three points should bring you up to speed.
Lenders and Expat Policies
First things first, you need to do your research. There are plenty of lenders that won’t offer mortgages to expats at all. Of those that do, some policies are better than others. In addition, some Australian lenders regularly revise their policies based on their desire for expat finance. Keep that in mind if your decision-making process is a long one.
It’s a tricky landscape to navigate, particularly if you don’t know what’s out there. So, you should consider working with a specialist broker that understands expat mortgages inside and out.
As an expat taking out an Australian mortgage, be aware that you may have to pay a higher deposit. While most Australian lenders will allow buyers to borrow up to 80% of the property value, it’s different for expats.
The likelihood is that you’ll only be able to borrow up to 70% of the property’s value. However, lenders consider mortgages for expats on a case by case basis. So, your new country of residence, its currency, and your visa status may affect your ability to borrow even that much.
Using a mortgage broker can give you an advantage as they understand the market, and eligibility criteria across multiple lenders. With their expertise, you may be able to borrow 80% depending on your circumstances.
You generally won’t be eligible for Lender’s Mortgage Insurance (LMI), which would otherwise allow you to borrow more. However, a couple of lenders do offer LMI, so make sure to ask your broker if this is one of your requirements.
No matter who you are and where you live, lenders always need to know that you’re capable of repaying your loan. Still, the process tends to be more rigorous when it comes to expats. So, expect to have your income, credit score, expenses, and more scrutinised when you apply for a mortgage.
It’s important to note that serviceability is measured differently by different lenders. Therefore, if you aren’t considered serviceable with one, you might be with another. Here again, it’s useful to have a knowledgeable broker onside. They should have an idea about which lenders you have the best chance with.
How Expats Can Finance Property in Australia
Although it’s harder than it once was for expats to finance property in Australia, it is by no means impossible. All you have to do to make the process easier for yourself is work with the experts in the field.
At Odin Mortgage, we know how lenders operate. So, we can give you a real insight into the loan options and interest rates that will best suit you. We’re also available seven days a week, which means you’ll never be in the dark about an approval. In these ways and many more, working with Odin Mortgage can take the confusion out of financing property.