Refinancing Apartments: A Guide for Australian Expats Living Overseas
Investing in an apartment as an Australian expat living overseas can offer opportunities in the Australian property market. However, navigating the refinancing process can be complex when you’re living overseas.
Deciding whether to refinance requires careful consideration of factors like interest rates, finances, and future plans.
This guide outlines the advantages and disadvantages of refinancing apartments, along with tips to secure the best deal as an expat.
Why Might You Want to Refinance an Apartment?
There are a number of reasons why you might want to consider refinancing your mortgage. Here are a few of the most common reasons:
- Lower your interest rate: Refinancing into a lower rate mortgage can save money long-term.
- Consolidate debt: Consolidating high-interest debts into your apartment loan can simplify finances.
- Modify loan term: Refinancing enables changing loan type, duration, or repayment structure.
- Move to a better lender: Given not many lenders accept apartments as security, you might be stuck with a lender that’s not leading the market. But now that the apartment is complete, your options also open up and there is a potential to refinance to a better bank.
Get a free Australian mortgage assessment today.
How Does Refinancing Work?
Refinancing an apartment works in a similar way to refinancing any other property types. However, there may be some specific considerations and requirements that apply to properties. Here’s a general overview of how refinancing apartments typically works:
- Completion of Construction: Before you can refinance apartments, the construction of the property needs to be completed. This means that the building must have received its occupancy certificate or equivalent documentation indicating that it meets all the necessary regulations and is ready for habitation.
- Loan Application: You’ll need to go through the loan application process, which typically includes providing financial information, such as income details, employment history, and any other assets or liabilities you may have. The lender will evaluate your application based on their criteria and assess your ability to repay the loan. Speak to an expert who can guide you on your available options.
- Valuation of the Property: Once the application is lodged, the lender will do a valuation of the apartment. A professional valuer will assess the property’s market value based on factors such as its location, size, condition, and comparable sales in the area. The valuation will determine the property’s worth and its potential for securing a loan.
- Loan Approval and Terms: If your loan application is approved, the lender will provide you with an offer outlining the terms and conditions of the refinancing. This includes the loan amount, interest rate, repayment schedule, and any associated fees or charges. It’s important to carefully review and understand these terms before accepting the offer.
- Settlement and Repayment: Once you accept the refinancing offer, the lender will work with you to finalise the settlement process. This may involve paying off the existing loan on the property (if applicable) and establishing the new loan. The lender will provide you with the necessary funds to pay off the previous loan, and you’ll begin making repayments according to the agreed-upon schedule.
Our team can guide you throughout the entire process so that you don’t have to face the hassle.
What Documents Will I Require as an Australian Expat Living Overseas?
As an overseas expat, you may require specific documents when applying for various purposes, such as employment, housing, or financial matters. The exact documents you’ll need can depend on your destination country, the purpose of your application, and the specific requirements of the institution or organisation you’re dealing with.
However, here are some common documents that overseas expats often need:
- Passport: Ensure it’s valid and has sufficient validity.
- Bank statements and income documents: Show financial stability and ability to make payments.
- Existing mortgage statements: Lenders may request for mortgage statements from your current bank.
How to Find the Best Deal on a Refinance
If you are considering refinancing your apartment, there are a few things you can do to find the best deal. Here are a few tips:
- Research on the best lenders in the market for you.
- Consult with a specialised mortgage broker who can help you compare and complete a cost or benefit analysis.
- Compare all costs, not just interest rates.
- Act quickly if rates are low – they can rise fast.
Speak with an Expert Mortgage Broker
Refinancing an apartment can provide potential savings, but requires careful research. Consult an expat mortgage broker to make the best choice based on your situation and goals.
Get in touch with our specialist mortgage brokers today to discuss your refinancing options and get valuable guidance.
Get a free Australian mortgage assessment today.
Frequently asked questions
I'm an Australian citizen living overseas. Can I refinance the mortgage on my apartment?
Yes, you can. However, refinancing options for Australian expats living overseas vary depending on the lender and their policies. Some lenders specialise in expat mortgages and may offer refinancing solutions.
It’s advisable to consult with mortgage brokers who have expertise in expat finance to explore suitable refinancing options for your situation.
How can I get pre-approved for a refinance loan as an expat?
Contact lenders specialising in expat lending and provide information on your income, employment, assets, debts, and property valuation. This will allow them to assess your eligibility.
Can I refinance an apartment loan before the construction is completed?
Generally, refinancing is done after the construction is complete and the property has received its occupancy certificate. However, it’s best to consult with lenders or a mortgage broker to understand any specific requirements or options for refinancing during the construction phase.
What are the key benefits of refinancing an apartment?
The main benefits are potential interest rate savings, debt consolidation, increasing loan terms to increase cash flow, modifying loan terms, and tapping home equity if property value has increased.
Will the value of my apartment affect my refinancing options?
Yes, the value of your apartment plays a significant role in refinancing. A higher valuation may provide you with better loan terms, such as lower interest rates or higher borrowing capacity. Getting a professional valuation done after construction completion is crucial to determine the property’s worth for refinancing purposes.
What documents do I need to provide when applying for a refinance loan as an expat?
Typical documents include passport, bank statements showing regular income deposits, proof of address, tax returns or financial statements, and your original purchase contract. Additional documents may be required by specific lenders.
How can I determine if it makes financial sense for me to refinance my apartment?
Look at current market interest rates and compare to your existing rate – if there is a savings of 0.5% or more, it may be worthwhile. Also factor in closing costs and calculate the breakeven point where savings surpass costs. A specialised mortgage broker can help you in comparing these costs.
What closing costs are typically involved in refinancing an apartment?
Closing costs may include loan application and origination fees, appraisal fees, legal and title fees, and stamp duty. Fees may vary, but often it ranges from $500 to $1,500.
Should I use a mortgage broker or go directly to a bank when trying to refinance my apartment?
Using a broker can help you find better rates and terms across multiple lenders. They’ll also help you in comparing the costs of moving and they will be continuously liaising with the bank on your behalf to get the refinance settled which will save you your valuable time. It’s worth noting that using a broker incurs no cost to you.
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