August 29, 2017
Many moons ago my family decided to immigrate to Australia from South Africa. Although my parents came to Australia with some job security it was a very steep learning curve in many areas of living. It would have made life a lot easier to be able to jump on the internet and learn some top tips on how things are done here, particularly in the banking industry in Australia.
For the past 15 years I have been in the privileged position of being able to assist clients with setting up their lives in their new home country by securing home loans for them, through my mortgage broking business, Mortgage Choice in Mudgeeraba on the Gold Coast in Queensland.
Once you hold a permanent residency visa you are able to purchase property in Australia without Foreign Investment Review Board approval. There are some common questions that come my way that I would like to share answers to.
How much deposit do I need?
There is not a straight answer here, as a deposit is only part of the criteria needed for a successful home loan application. Every lending institution has their own set of criteria. (Have a read of my blog on how to make your home loan sparkle to learn more.)
Nearly all banks will consider your application with a 20% deposit. Lots will have a look if you have 10% deposit and a few will have a look if you have 5%. Bear in mind that this is the minimum deposit for the loan but you still need funds to cover legal fees, lender fees, stamp duty and mortgage insurance, if applicable.
One point is that you will need some deposit. So if you are looking at buying a car and a home as you arrive in Australia it might be worth looking at your funds and possibly dividing these to have some for a home loan deposit and some for a car loan deposit.
I can recall several clients who have landed in Australia – purchased two cars along with some big ticket home appliances for cash and then struggled to put together enough for a home loan deposit as they are still waiting on the sale of their property back in South Africa.
Will the bank consider lump sum payments into a bank account?
Your savings for your home loan deposit need to come from genuine savings or the sale of a property. Gifts will not be considered as genuine savings for the minimum deposit for your particular lender.
What do I need from my employer in order to apply for a loan?
Again there is no one answer fits all. Most lenders will consider your application on two payslips and a contract of employment. If you have remained in your same profession then your previous role will be considered as well.
Can I apply for the first home owners grant even if I have owned property abroad?
Short answer is yes. The First Home Owner Grant applies if you buy a newly built dwelling or engage a builder to build your home and you have never owner and occupied property in Australia before.
There are stamp duty concessions for first home buyers buying established homes, but to be eligible for these you can’t have owner property anywhere in the world before.
Do I need to use a mortgage broker to obtain a home loan in Australia?
No is the simple answer. You are able to approach any lending institution and ask for a home loan directly or through a mortgage broker. However approximately 50% of all home loans in Australia were written by mortgage brokers in 2016.
The broker channel is an efficient way for lenders to obtain loans without the salary and branch costs associate with writing those loans.
The benefit to you of using a mortgage broker over dealing directly with banks and lenders is that the broker can compare many products for you and discuss all the features so that you are able to make an informed decision. The mortgage broker will also negotiate on your behalf and follow up all the paperwork with the lender, solicitor and real estate agent.
Here is a short video on how the Mortgage Choice model works – and how it is at no cost to you.
As an experienced mortgage broker I will chat to you about your unique situation and the factors important to you, such as a redraw facility to allow for some flexibility in your home loan.
Congratulations on your decision to move to Australia.
If you have any questions in regards to home loans, car loans or business loans please don’t hesitate contact me on 5559 2563 or email on firstname.lastname@example.org. Our office is situated just 5 minutes from Robina Town Centre in Bell Central in Mudgeeraba.