Consider overseas earning in homeloan applications?
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Heaps of them, depending on the currency being earned.
Most lenders have some policies around foreign incomes so if you're in a strong financial position you can have a lot of choices. There can be some limitations however.
Verification of income can be tricky for some countries. In Australia you usually don't need more than a payslip or two. Depending on the country and currency you're being paid in, you may need additional documentation such as employment letters, bank statements verifying deposits, employment contracts and tax returns.
The best advice I've got here is to have your income deposited into a bank account which issues genuine looking statements.
The bigger the deposit the better. Again it can depend on the currency of the income, but you can usually rely on being able to borrow 80% of the property value or contrat price. A few lenders will only allow you to borrow 60% to 70%. ANZ and CBA will lend up to 90% or even 95%, but there are limitations (especially for 95%; I don't think I'd even bother trying in most cases). Whilst these two lenders may be more generous for LVR, they have limitations in other areas.
Affordability may be determined differently. Some lenders have different policies for determining how much you can borrow. They can treat income and debt differently to Australian residents. This will potentially effect how much you can borrow.
Things take a bit more time. Don't agree to 30 day or 45 day settlements. Many things can be done over the phone or by email, but some things have to be done via regular mail and this takes time. You can also expect to be required to visit a consulate to get various documents certified, which can be a serious time waster. Transfering money for deposits can be tricky. Minimum timeframes to settlement should be 60 days, 90 days is preferred and 120 days is ideal.
Even if you're in Australia but have an overseas income source, many of the items above may still apply. Foreign income is certainly not the end of the world, but it does create some additional challenges which you need to be aware of.
Verification of income can be tricky for some countries. In Australia you usually don't need more than a payslip or two. Depending on the country and currency you're being paid in, you may need additional documentation such as employment letters, bank statements verifying deposits, employment contracts and tax returns.
The best advice I've got here is to have your income deposited into a bank account which issues genuine looking statements.
The bigger the deposit the better. Again it can depend on the currency of the income, but you can usually rely on being able to borrow 80% of the property value or contrat price. A few lenders will only allow you to borrow 60% to 70%. ANZ and CBA will lend up to 90% or even 95%, but there are limitations (especially for 95%; I don't think I'd even bother trying in most cases). Whilst these two lenders may be more generous for LVR, they have limitations in other areas.
Affordability may be determined differently. Some lenders have different policies for determining how much you can borrow. They can treat income and debt differently to Australian residents. This will potentially effect how much you can borrow.
Things take a bit more time. Don't agree to 30 day or 45 day settlements. Many things can be done over the phone or by email, but some things have to be done via regular mail and this takes time. You can also expect to be required to visit a consulate to get various documents certified, which can be a serious time waster. Transfering money for deposits can be tricky. Minimum timeframes to settlement should be 60 days, 90 days is preferred and 120 days is ideal.
Even if you're in Australia but have an overseas income source, many of the items above may still apply. Foreign income is certainly not the end of the world, but it does create some additional challenges which you need to be aware of.
PT Bear - thanks for the information above. You mention that a 95% LVR is very difficult - for yourself and any other brokers out there, typically what is the maximum achievable LVR for an investment loan for an expat (buying Australian property)? Do banks consider I/O investment loans to expats and do these types of loans incur a significantly higher premium in terms of interest rates?
Thanks in advance,
Thanks in advance,
95% loans are not hard if the application is decent. You need to go with the right lender. 95% becomes hard when the application lacks strength in several areas, which could include rent dependency for the application to service, multiple credit hits, poor credit history, employment, etc. 95% loans are easier now that they were say 1 year ago.
Regards
Shahin
Regards
Shahin
Shahin what's the policy with using overseas income? Im an aussie resident living working in Singapore and want to purchase a property in Sydney this year.
Depends on the lender. For example Westpac will take the gross amount of your pay and apply aussie tax rates whereas ANZ will take the net pay. This comes in handy for countries that have a lower tax policy or even no tax applied than australia. Documentation requires will also differ in that Westpac will require far greater documents such as employment letters, etc whereas ANZ will take a payslip so long as it is not a simple payslip (i.e it shows all the necessary information).
Regards
Shahin
Regards
Shahin
Easy peasey. How much do you need?
Being an expat in Singapore will be easy. Different banks have different policies. Some of which are harder than others.
CBA takes the exchange rate on the day and discounts it by 20% (of your net salary). However, they also apply the standard 'living costs' even though as expats our meals/accommodation is regularly paid for by the company.
Banks also prefer seeing your salary paid into an Australian account.
Being an expat in Singapore shouldnt cause you too many issues (if you have the right broker).
Blacky
CBA takes the exchange rate on the day and discounts it by 20% (of your net salary). However, they also apply the standard 'living costs' even though as expats our meals/accommodation is regularly paid for by the company.
Banks also prefer seeing your salary paid into an Australian account.
Being an expat in Singapore shouldnt cause you too many issues (if you have the right broker).
Blacky
