Expat foreign owner loans are loans offered to many Australians who are living overseas (Australian expats) due to many reasons like work opportunities or marriage. They tend to live overseas longer than expected but would still want to retain their roots and invest in a property in their homeland, Australia.
If you’re an Australian citizen living overseas and trying to secure a home in Australia, the process will be different compared to a standard home loan. There are many banks and lending institutions that offer expat loans. This loan also has higher interest rates compared to regular home loans.
Important: Australian expats (who are citizens of Australia or enjoying dual citizenship) will NOT need to get an approval from the Foreign Investment Review Board (FIRB).
How To Secure A Home In Australia via Expat Foreign Owner Loans
Some banks and other lending facilities find it risky to offer home loans to Australians living abroad. But there are also banks who are willing to extend credit to Australian expats. Here are steps you can take for you to acquire a loan to purchase the home of your dreams.
1. Assess if you are able to avail an expat loan. Take note that expat lending entails higher interest rates, so it is best to compare banks and lending institutions that provide the best rate. Below are factors that can affect expat foreign owner loans.
- Australian citizen living abroad
- Australian permanent residents living abroad
- Australian living in New Zealand
- Australian married to a foreign citizen
- Tax rate of the country you reside in
- Source of income – are you self-employed?
- Foreign business income
- The currency of your income
- Borrowing power
- Power of attorney
2. Speak with an experienced mortgage broker specifically around expat loans. It is more beneficial to work with a mortgage broker considering the daunting process and documentation needed to pursue an expat home loan. Mortgage Brokers have wide access to a multitude of banks and lenders that offer various loan types including expat loans3. Get your documents ready. Documentation will depend on your situation. The bottom line is that banks and lenders would like to see proof of your ability to make repayments once the loan is granted. Be ready with the following:
- Proof of income. Pay slips or foreign tax returns for employed. Special considerations are given to self-employed individuals living overseas however this could be a difficult process.
- Valid work visa. This document is part of the verification process. This document will not be needed if you have dual citizenship in the country of present residence.
- Other documents include a copy of your passport, your credit history, your current debt obligations.
- Power of Attorney. In some cases, you might need to get power of attorney for your trusted relative or friend who can do some favors on your behalf.
4. Get a Pre-approval for your loan. Pre-approval is an issued letter from the lender stating that you meet their requirements for an expat foreign owner loan. The letter will also state the amount or percentage you are able to borrow.Getting a pre-approval gives peace of mind where you can actually make a loan regardless if living in a foreign country. Pre-approval also speeds up the whole process of purchasing your desired property in Australia.