100% No Deposit Non Resident Guarantor Home Loans
Despite what you may have already been told or heard, non-resident guarantor home loans up to 105% are available to non residents. This means that for an eligible non-resident borrower with an eligible guarantor, a home loan for 100% of the purchase price and enough to cover the costs like stamp duty is available. This means no deposit from the borrowers would be required.
This page provides information for when a non resident can get a home loan to buy a home in Australia with no deposit of their own.
What is a Guarantor Home Loan?
A guarantor home loan is where borrowers use the assistance of a relative (generally parents) to arrange a home loan for their purchase. The parents will go guarantor for generally 20% of the purchase price and will either use their home or provide cash security (term deposit) to secure/guarantee this 20% deposit.
What is a Non-Resident?
For the purposes of this home loan article, a non resident borrower is either a;
- Foreign citizen living in Australia on a temporary resident visa (ie 457 working visa or spouse visa), or
- 2) Australian citizens living and working overseas (Australian expats).
To be an eligible borrower the non-resident needs to demonstrate;
a) Good credit history ideally free from credit defaults however defaults can be accepted providing paid,
b) Good employment history ideally out of any probation period. Probation can be considered on a case by case basis but would generally require some previous experience in a similar position,
c) Positive asset position (assets greater than liabilities),
d) Income sufficient to afford the repayments, and
e) That the property being purchased and the guarantor’s property is a regular residential house or unit.
Providing these can be demonstrated the next step is to determine whether the guarantor is acceptable to the bank.
To be an Eligible Guarantor the Guarantor Must;
- Be immediately family such as parents or siblings. Guarantors that are cousins or friends are not acceptable,
- Own property in Australia and have sufficient equity in that property,
- Have clean credit history.
The Myth: Why do most brokers and banks advise a non-resident cannot get a home loan using a guarantor?
Most banks simply do not like lending to non residents as they are seen as too risky. The banks are concerned about issues such as;
- Temporary resident visa runs out and they have to move back to their home country forcing a sale of the property,
- World economy and its impact on Australian expats working abroad, i.e. the banks know what is happening in Australia’s economy but are not as aware about the economies of countries overseas and their issues like unemployment levels.
MAP specialise in home loans for non residents so are in the best position to advice of all lending options that are available.
No Deposit Home Loan for Non Residents
A no deposit guarantor home loan for non-residents allows non-resident borrowers to purchase a property in Australia with no deposit using the equity in a guarantor’s property. If you do have some deposit then you can still use this to purchase the property if you like and therefore get a smaller loan. The option is there though for non-resident borrowers to purchase property without a deposit.
What to do next?
If you are a temporary resident then more information generally is available on temporary resident home loans here. For Australian citizens overseas there is further information on expat home loans here.
If you are a non resident seeking a home loan in Australia then simply give MAP a call or enquire online for a quick free no obligation consult where we will;
- Advise you of your borrowing options,
- Work out a loan structure that suits you taking into account your budget and objectives,
- Complete a debt elimination plan showing you ways to pay your home loan off sooner.
We offer a free service so contact us today to see how we can help you.