When living and working in Australia on a non-resident visa (perhaps a 457 Visa), it’s likely that you would prefer to buy your own home to benefit from the investment potential of one of the most vibrant property markets in the world. You may have visited a few banks already to check out mortgage possibilities. If so, it’s probable that you’ve been turned away with the advice that you need a deposit of 20% or more. Don’t despair! The mortgage market in Australia is huge; it just takes a little bit of navigating to find your way around it, and this is where using a mortgage broker specialising in helping buyers on non-resident visas comes into its own. 5 reasons to use a mortgage broker specialist It’s understandable that non-permanent residents will be treated differently to natural Australians when it comes to borrowing hundreds of thousands of dollars. So there are different rules for 457 visa holders, and each… Read More
If you are not a first home buyer or live in a state like Victoria or South Australia where government stamp duty amounts to 4-5%, then just having the 5% deposit that some banks require is not going to be enough to get you into your next property. For example, if you are purchasing a property in Victoria for $400,000 as a first home buyer and have saved $20,000 as your 5% deposit, the figures look like this; 5% deposit: $20,000 Stamp duty: $14,307 Misc costs for legals etc: $2000 Total funds required: $36,307 Less First Home Owners Grant: -$7,000 Total own cash required: $29,307 If you have saved up the $20,000 then you are still some $9,000 short on being able to buy your first home in victoria. This article briefly explains a couple of options for this scenario. Option 1: $20,000 Extra on Settlement MAP has options where lenders will provide/fund an extra $20,000 on settlement to assist… Read More
Temporary residents in Australia on 457 visas are, as of today, able to borrow up to 90% LVR with only a 10% deposit plus costs. After the withdrawal of this product during the GFC, it is now back in full force. Providing the 457 visa holder has 12 months in current job and has saved up a good portion of the deposit, then it is very likely they will qualify for a 90% 457 visa mortgage. Foreign citizens without permanent residency (‘PR’) have to date required a 20% deposit unless purchasing with an Australia citizen or permanent resident. This is a great step forward recognising that there are many professional temporary residents out there who can easily afford the repayments on a mortgage but do not quite have the required 10% deposit. More information on 457 visa home loans here.
Lenders Mortgage Insurance: What is it and why did they decline my non-resident home loan? This article explains what Lenders Mortgage Insurance (‘LMI’) is. The article then provides information on when a home loan can be approved greater than 80% LVR (ie, with LMI approval). What is Lenders Mortgage Insurance? Lenders mortgage insurance is insurance that protects the bank in the event of buyer default. The easiest way to explain it is to compare it to a person insuring their car. In the event of an accident or theft the insurance company will pay out the car owner to either fix the car or buy a new car. LMI is similar in that it pays out the bank should the borrower default on the mortgage and the bank makes a loss. Are all home loans mortgage insured? No. As a generally rule only loans that are greater than 80% LVR (‘Loan to Value Ratio) are mortgage insured. A borrower with… Read More
Many banks and lenders will simply refuse to lend to applicants that do not hold a permanent resident visa or Australian citizenship. For many lenders it is simply too risky to lend to an applicant without permanent residency as most are worried about what happens if the temporary resident visa is not extended. Is a home loan in Australia possible if I do not hold permanent residency PR? Yes! Whilst many lenders will not lend to you there are a good number that will at normal standard interest rates. Thats right, you will not be paying more because you do not hold permanent residency. The key to getting approved is simply applying with the right bank and that is where MAP can help. How much deposit will I require? As a generaly rule, applicants for home loans that do not have a permanent resident visa will require a 20% deposit. There is an exception to this if the applicant without… Read More
The Federal Government has announced changes to foreign investment rules for residential housing which basically takes things back to where they were pre 2008. That is, many of the exceptions to the requirement to make an FIRB application have now been removed so that even Temporary Residents seeking a home loan and purchasing property in Australia to live in (which was an exception) will fall within the regime and an FIRB application will need to be made. This does not apply to those temporary residents on a spouse or defacto spouse visa purchasing with an Australian Citizen as joint tenants. Information on spousal visa home loans here. Temporary residents that are looking to move into the property though should not be concerned. Whilst it is an extra hurdle with a few extra forms to complete, the approval should just be a technicality. The fact is that the government does not generally oppose such purchases as their policy is more to prevent… Read More