Ask the expert: How to buy a house in Australia as an expat

Ask the expert: How to buy a house in Australia as an expat

It was really important to us to be able to buy our own home in Australia. Wed been home-owners for many years in the UK, and moving into a rental when we arrived in Brisbane was a strange feeling.

When we arrived, I had no idea about the Australian mortgage market. We didnt know how easy it would be for foreigners buying property in Australia, even though we were permanent residents. I didnt know whether wed be able to get a mortgage easily, especially as Matt was working on temporary contracts and I was self-employed. We had no idea how much we might be able to borrow or what sort of house we might be able to afford or what amount of deposit we needed. We figured wed rent for a year to figure out which suburb we liked best and hope everything worked itself out by the time our contract was coming up for renewal.

About six months into our rental contract we were introduced to mortgage broker Anish Prasad, from i Lend Finance Solutions, by a friend (check him out on my Resources page). He came over to our house one evening and talked us through all of our options. We realised we could afford to buy sooner than we expected and he answered all of our questions and addressed all of our concerns.

You can now get a $100 visa gift card as a thank you if you use Anish Prasad as your mortgage broker. Terms and conditions apply read this post for all of the information.

We started looking for a house straight away and quickly found our dream home. 30 days later we moved in and broke the lease on our rental. Buying a house here is SO much easier than in the UK. Providing you get the right help and advice.

I decided to partner with Anish for this website as I knew his advice could really help my readers. We partner on an affiliate basis which means the site receives a commission if you go on to use his services via our initial referral inquiry form at no extra cost to you. And actually, by going through our referral form you also get a $100 giftcard back so you make money in the process too!

Find out about the gift card deal here or send him a message via the link on this page (his listing is towards the end of the page).

How to get a mortgage when youve just arrived in Australia

I asked Anish to write a guest post about getting an expat mortgage. I asked him to answer all of those niggling questions Id had about how much deposit you need here and what fees to budget for. If theres anything weve missed off just drop Anish a line through the contact form on my Resources page as hell be happy to help. It doesnt matter if youre still based abroad and want some advice to help you plan for the future, or youre here living in Australia already hes happy to chat to you whatever stage youre at. (If you are looking for more info on buying a house in Australia check out this blog post about the steps involved and this post about the costs involved in buying a house.

I highly recommend speaking to Anish if you are looking to buy a house in Australia. Contact him via the link on my Resources page now.

Ill hand over to Anish now

Buying a home in Australia as a migrant

Buying a home is everyone’s dream no matter where they are located. But what does it mean for someone to buy a home in Australia if they’ve migrated here from another country? Do mortgages and home loans differ for permanent residents? In this post, we’ve put together a few frequently asked questions for expat mortgages that we’ve come across as mortgage brokers at i Lend Finance Solutions.

Can migrants get a mortgage in Australia?

Certainly, however, the amount you can borrow depends on your residency and visa status with the Australian Department of Immigration and Citizenship.

It may be necessary to apply to the Foreign Investment Review Board (FIRB) for permission to buy real estate; they make decisions based on each individual circumstance.

(Karen here just chipping in we came on a 189 permanent residency visa and bought an average-priced family home. We were able to buy without any issues just as if we were Australian citizens but if youre concerned about your eligibility because of your visa type then have a chat to Anish to see what your options are).

When it comes to the mortgage or home loan itself, while the assessment criteria can vary significantly among lenders, there are some general things that help your loan application:

• Serviceability – your ability to repay the proposed debt based on your current income, living expenses and the repayments of any other current debts.
• Security – the value and saleability of the property that you are giving to the bank as security for your loan. In most cases, this is the property that you are buying.
• Credit history – Australian lenders cannot access your overseas credit history (with few exceptions) however, note that most lenders who approve migrant loans will use other criteria to determine their credit risk, assessing them on their financial situation, visa, assets, and overall ability to pay off the loan.

How much can you borrow?

Generally speaking:
• 90-95% of the property value – permanent residents and people on spousal visas
• Medical professionals – special loan packages are available on a case-by-case basis.

>> Claim your $100 visa gift card from Anish Prasad by organising your mortgage of over $200k through him. Read this post for all the details.

What impacts your mortgage application?

• If you are married to a foreign citizen then some lenders will not accept your application.
• Any negative or bad credit history that you have obtained in Australia would be assessed by the Australian banks.
• Employment – the stability of your employment, the industry that you work in and your history of work in that industry, both in Australia and overseas.
• Visa status – the type of visa that you are on, the conditions of your visa, and the implications this has on your ability to remain in Australia and repay your loan.
• Asset position – your assets and liabilities are assessed and compared to your level of income and age
• Deposit – the amount of savings you have and whether it has been saved up over a 3 month period so that it satisfies the bank’s genuine savings policy

Tip: Did you know that in Australia, mortgage brokers don’t charge any fees for most loans? Instead, they receive a commission or fee from lenders, and there is a wide variety of options – options that we know all about and can help source for you what suits your unique requirements and lifestyle.

Are there any grants available for migrants in Australia?

For migrants who have been granted permanent residency, Australia has something called a First Home Owners Grant (FHOG). This grants you up to $20,000 towards buying or building a new home. They do, however, vary from state to state.

Are borrowing options different for permanent residents in Australia and temporary 457 visa holders?

Not everybody on a 457 visa is eligible. The lending policy is complicated and varies from lender to lender. Many temporary residents are advised that 80% is the max. amount they are able to borrow, meaning a 20% deposit plus costs is required. It is true that this is the general rule, however, there are exceptions to this policy when; The Subclass 457 visa holder is purchasing jointly with an Australian citizen, NZ citizen or permanent resident. In this scenario a loan to value ratio of 95% is available, or the Subclass 457 visa holder is a professional applicant with a salary in excess of $80,000 and with a minimum of 1 year left remaining on their visa. 457 Visa holders do not qualify for the First Home Owners Grant (FHOG) and other government benefits unless buying jointly with an Australian citizen or permanent resident.

How much deposit people should aim to have saved before buying a property in Australia and how does this differ with investment properties in Australia?

Most residents in Australia looking for a home loan will need to provide a 5-10% deposit and have enough funds to pay for stamp duty and other expenses. This deposit must usually be in the form of genuine savings, or it may not be accepted by lenders. You may receive a First Home Buyers stamp duty concession for your principal place of residence. If you have a 20% deposit, you can avoid paying mortgage insurance. There is no stamp duty concession when purchasing property as an investment. In order to qualify for a mortgage, you need to be working and have a clear credit history.

A couple of notes on down payments:
• If you have a larger deposit or already own real estate in Australia then you may not be required to prove any genuine savings.
• If your parents own a property in Australia then you may qualify for a guarantor loan which means that you don’t need a deposit at all.

Interest rates are currently sitting around the 4% mark for both fixed and variable.

What fees do new migrants need to be aware of on top of the house purchase price?

Make sure to factor in additional costs when making an offer:

• When buying property in Australia its necessary to pay Stamp Duty on the purchase price. Expats who are first time buyers most often the case may be exempt, but different rules apply in each state so they should consult their state government website.

• Other fees that will be incurred over the course of the purchasing process are:
the lender application fee and lenders mortgage insurance
a mortgage registration fee which goes to the government
a land transfer fee
the legal fees that the solicitor will charge
the cost of the conveyancing
checks on the structure and pest situation.

• Once the sale has gone through the buyer also needs to pay for home insurance.

If you’ve migrated here to Australia and are ready to take the next step and purchase a new home or property, let us at i Lend Finance Solutions help you get approved. As everyones circumstances are different, we can help you to pull all the pieces together to give you an overall picture of your application.

Thanks for the insight into buying your first home in Australia, Anish.

If youd like to contact Anish to ask any questions about buying property in Australia, drop him a line through the contact form on my Trusted Experts page and hell help you navigate the crazy, strange and exciting world that is buying a home in Australia. You dont need to be in Australia yet to take advantage of his advice and you dont need to be based in Brisbane to use his services he can do everything remotely. Speaking from personal experience, I can safely say he made our own home buying a really smooth and easy experience. Send Anish an email via the link on this page.

Got any more questions about home buying? Check out these other articles on my blog here and here which should answer a few of your questions. If you need to move your money abroad, check out this post on transferring large amounts of money to Australia.

>> Claim your $100 visa gift card from Anish Prasad by organising your mortgage of over $200k through him. Read this post for all the details.