How to get an Expat Home Loan?
If you’re an Australian citizen living and working overseas, it is has gotten relatively more difficult to get a home loan to buy property in Australia. The interest rates and fees for expat home loans are generally the same as those any Australian living here could access, but specific terms and conditions can apply to these types of loans, so it’s important to compare your options before submitting an application.
Factors such as fluctuating exchange rates, foreign tax rates, and any foreign debts you have is taken into account when assessing your loan application. One of the main issues to consider when you apply for an expat home loan is that you will be earning income in a foreign currency. A lender will need to assess your income and earnings capacity before approving your loan application, but each lender has its own approach to foreign income. Most Australian lenders will only accept a certain percentage of your foreign income, so they can be protected against factors such as fluctuating exchange rates.
There may also be a restriction on the currency you are being paid in. Some of the commonly accepted currencies for foreign income when applying for an Australian expat home loan include: US Dollars, Euro, British Pound Sterling, New Zealand Dollars, Canadian Dollars, Hong Kong Dollars, Singapore Dollars, Japanese Yen and Chinese Yuan.
Other currencies may be considered but restrictions such as a lower LVR or the type of property to be used as security may apply. Assuming an accepted currency, most lenders will accept 70%-80% of the foreign income to cover exchange rate movements.
What other evidence and documentation is needed?
You’ll need to prove your income to be approved for an expat loan. Lenders typically will ask for 3 consecutive payslips, 3-6 months bank statements showing income deposited to a bank account, payslips, tax returns and an employment letter or contract. The easier it is for them to verify your income, the easier it is for the loan to be approved. They may ask that the funds to be used for the deposit and fees be transferred to an Australian bank account for the application. Lenders will also ask for copies of your passport and visa to show that you are allowed to live and work overseas.
What if My Partner is a Foreign Citizen?
If only your earnings are being used to service the loan then there shouldn’t be any issues. Lenders will refuse to accept any income from a foreign resident so in this case, your Partner’s income will be ignored.
Once the loan has been approved, signing the loan contracts and mortgages will need to be done in a certain way. Depending on the Lender, this can be done by way of a Registered and Enduring Power of Attorney, or documents can be couriered overseas but will need to be witnessed at an Australian Consulate or Embassy.
Obtaining an Expat loan doesn’t have to be hard and we can guide you so your loan application will run as smoothly as possible.