Before your property purchase, you will need to be familiar with the lending facilities available in Australia. Below is a general overview of the facts about obtaining finance for your Australian purchase.
The mortgage market is well developed in Australia and foreign purchasers can obtain repayment or endowment mortgages to purchase their property. These mortgages cover up to 80% of the valuation or purchase price (whichever is lower) and are available for a period of between 5 and 30 years, up to a maximum age of 70. Loans are available at a minimum level of £50,000 (at 80% of the valuation). Currency can be in Australian Dollars, Sterling or US Dollars.
Non-status/self-certification mortgage facilities are not available in Australia, therefore all loans need to be supported by a minimum of proof of income.
If you are employed, you will need to produce your last three months pay slips, P60/employers reference and your last 6 months personal bank statements.
If you are self-employed you will need copies of your Audited Accounts together with your last 12 months business, and 6 months personal bank statements.
Each lender has a slightly different approach in assessing the personal income of applicants and establishing the maximum loan to be made available.
Australian lenders only take into account approximately 70% of any proposed rental income that you could earn on your property when assessing your mortgage application. Your loan will be based on your personal (or joint) 'gross' pay and for you to be considered by the lenders in Australia, your total outgoings must not exceed 35% of your gross monthly income. For example, if your total gross monthly income is £2,000, your total outgoings must not exceed £700: In order to be considered, you must have £1,300 per month available for personal spending.
Interest Only Mortgages are widely available in Australia and are on offer for 5 or even 10 year periods.
Commercial Mortgages also allow investors the option to choose between fixed or variable rates of interest, each with the option of interest-only repayments. This facility may also be combined with a line of credit to enable instant access to equity within your property.
If you have property in your own country and would like to borrow against this in an equity release plan, we can introduce you to independent financial advisors who can help you raise the necessary finance.
When considering a buying property in Australia, you are well advised to get expert mortgage advice from a mortgage broker.
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