Thursday, May 26

Everything You Should Know About Aussies Expat Home Loans

Home Loans

It’s a dream of almost every Australian to live and work overseas, but that also comes with some concerns like safely purchasing a real estate property in Australia. The steps involved aren’t that hectic because you can find brokers to help you with everything. However, the challenge arises when you apply for Aussies expat home loans to finance your ambition. 

Several banks and private lenders offer mortgage loans to an Australian expat; all you need is to find the right one. This ensures you don’t opt for high interest and monthly installments for home loans. Furthermore, it comes with tricky terms and conditions that you don’t read and understand, and they may land you in trouble. Below is everything you should know about Aussies expat home loans.

Currencies

Perhaps you wonder what causes the difference between loans issued to Australian residents and Aussie expat home loans. One of the differences is currency because not all lenders will accept all foreign currencies. Despite the varying policies, many lenders will get Great Britain Pounds Sterling (£), Singapore Dollar, Hong Kong Dollar, United States Dollar ($), Euro (€), United Arab Emirates Dirham, Japanese Yen (¥), the New Zealand Dollar, Swiss Franc, and Canadian Dollar as a foreign income. Additionally, some other currencies may be accepted, but it means you can borrow at a lower loan to valuation ratios (LVR)

LMI and LVR

Aussies expat home loans offered up to 90% LVR, but in such scenarios, the borrower must pay for Lenders Mortgage Insurance (LMI), an extra expense you may not be comfortable with. But if you meet specific criteria, you can get an 85% LVR loan without paying LMI. If you live and work in Australia and work as an accountant, lawyer, or doctor, you can get up to a 90% LVR mortgage loan without paying LMI. 

With Aussies expat home loans, things are different because they don’t offer such. But when you work with a professional income broker, they may help you get an affordable mortgage loan, especially if you live in Hong Kong, the USA, Singapore, or the UK. 

Interest Rates

Unfortunately, some lenders don’t provide discounted Aussies expat home loans, making it challenging for them to get affordable home loans. Luckily, you can always compare interest rates on significant mortgage loans, which allow you to scan around for loan offers that suit your financial condition. 

Conversely, you can always work with experts in a foreign mortgage loan as they can help you scale down to the most affordable loan with affordable interest rates. If you can’t provide proof of income, you may not be eligible for a loan, or you can end up paying higher interest rates.  

Currency Fluctuations and Tax Implications 

Australia is known to be among the countries with the highest tax rates, and many landers often access borrowers’ income based on the Australian tax rate. It, therefore, means that you’ll have reduced borrowing power. The fluctuation in currency value may force many lenders to accept only 60-90% of your income. A lending firm won’t consider your negative gearing tax benefits when assessing serviceability.

Documents required for Aussies expat home loans

The first document you’ll need to provide is proof of income for you to qualify for Aussies expat home loans. A bank statement of not less than six months is also required during the loan application. Employment letters, the last two payslips, and employment checks are also crucial for the process. Lastly, VISA and passport indicate that you have the authorization to live and work abroad. 

Conclusion

Sometimes, knowing where to start can be challenging, but we believe HSBC, UBank, Westpac, IBM, St. George, homeloans.com.au could be among the best lenders to offer affordable Aussies expat home loans. However, we encourage Aussies expats to research all the possible factors that may lower their borrowing capacity or increase the interest rate.