If you are an Australian expat, borrowing to purchase a property home can be a challenge. Several obstacles can complicate the process, and it’s important to know what they are before you decide to investigate your options to borrow and purchase property in Australia.
Foreign income can be assessed differently.
One of the challenges lenders face is accurately assessing income earned overseas. Fluctuations in currencies, different tax systems, and employment standards can impact borrowing capacity. From the banks’ point of view, it is all about assessing risk, and banks may apply significant discounts to foreign income to reduce their risk.
Currency exchange rates and fluctuations can create uncertainty.
Currency fluctuations can affect the value of income and savings expats may have in foreign currencies. From a lender’s perspective, these changes can influence the ability to service a loan and add some degree of financial uncertainty to the borrowing process.
Expats tend to have stricter lending criteria.
Most Australian banks have stricter lending criteria for expatriates than residents. This can include higher deposit requirements, a more comprehensive income verification process, and more evidence to ensure income stability and reliability. This is where a mortgage broker with expertise in expat lending can provide some value for borrowers. They can provide the right guidance to ensure an expat looking to borrow has the right documentation to improve their chances of getting a loan approved.
Not all lenders offer home loans to expatriates.
Not all Australian financial institutions offer expatriates home loans, limiting the options for competitive interest rates and loan terms. This can make securing a favourable loan more difficult, requiring expatriates to conduct thorough research or enlist the help of a mortgage broker specialising in expatriate services.
Accessing a credit history can be challenging if you’ve been overseas for many years.
A borrower’s credit history is important for securing a loan, but this can be a challenge if you’ve lived overseas for an extended period. Finding a lender willing to offer favourable loan terms can be difficult without a recent Australian credit history.
While purchasing property in Australia as an expatriate can be challenging, careful planning and getting the right advice from an expat lending specialist can help overcome these obstacles, help borrowers navigate the complexities of the process, and achieve a successful property purchase.