NZ citizen bends tight lending rules; got a home loan in Australia
When Timothy and Michelle need to pack up and migrate from New Zealand to Australia, they had no idea that Michelle’s foreign NZ income would see their home loan application declined.
Bank policy isn’t always black and white.
Timothy gets a job
After working for a number of years as a pilot, Timothy fell in love with Australia and so did his accountant wife Michelle and their three children.
Luckily for Timothy, he was offered a full time job in Brisbane in December 2015 and will start work immediately.
Timothy breaks the news to his wife, who is so excited, immediately starts looking for houses in Brisbane.
Timothy and Michelle were both on great incomes and the firm that Michelle worked for also had an office in Australia.
She knew she wouldn’t have any trouble in getting the same job on the same pay in the Australian office.
Both Michelle and Timothy were certain they would be pre-approved for the amount they wanted to borrow.
Their application is knocked back!
After applying with one of the major banks in Australia, Timothy and Michelle’s home loan application was declined. The bank wouldn’t accept Michelle’s NZ income because they considered it to be foreign currency.
Even other mortgage brokers said they couldn’t help them.
The standard foreign currency policy, states that the currency that the borrowers earns an income in must match the currency of the mortgage.
Because Timothy has already started working, Timothy’s Australian income was accepted because he was able to provide his two most recent Australian payslips along with his most recent NZ group certificate (tax return).
Unfortunately, the couple also needed Michelle’s income to service the loan. Serviceability is the term for when bank’s assess a borrower’s ability to repay a home loan by looking at the overall financial situation of the applicants.
On paper, Michelle hadn’t earn any Australian income at all because she couldn’t provide any payslips.
This is despite the fact that she had her role had been confirmed in Australia by her employers.
Timothy’s income alone just wasn’t enough to borrow the amount they wanted to borrow.
With the start of the school year just around the corner, the couple needed to get pre-approved, settle their new home and their children enrolled in just over 8 weeks time!
A clever solution
The couple spoke to an expert
Home Loan Experts is a specialist in foreign income mortgages and we receive many applications from New Zealand citizens looking to migrate across the ditch and settle Down Under.
Kishore Bhatu has particular expertise in this space and Timothy and Michelle sought out his help from speaking with a friend who was in a similar situation.
After hearing their story, Kishore was almost certain he could get the couple approved for a home loan if he could just find the right lender and explain the situation to a decision maker in the credit team.
One payslip was all that they needed
Kishore was able to explain that even though Michelle was still working in NZ at the time, she had a signed a contract to start work in January, doing the same accounting work on the same pay scale.
The bank considered this and advised Kishore that if Michelle was able to provide one payslip showing her wage in Australia, they would approve the couple’s loan.
They were approved for a great home loan
With a pre-approval under their belt, Timothy and Michelle found a beautiful 4-bedroom home in Fortitude Valley and put down their deposit in the first week of January.
By this time Michelle had started working in her role so she was able to provide Kishore with a payslip and their home loan was unconditionally approved.
If you’re a New Zealand citizen getting paid in NZ dollars, it would be classed as foreign income and you would limited to borrow up to 60% of the property value.
However, since she was married to an Australian citizen, the couple were able to borrow up to 90% of the property value.
Best of all, they didn’t need Foreign Investment Review Board (FIRB) approval and weren’t restricted to just buying an investment property because of Michelle’s NZ citizenship.
A happy ending
Common sense prevails
Michelle and her family have been happily living in their home since January 2016 and they were able to get their children enrolled in school on time.
What Kishore was able to achieve by asking the right questions to his clients, collecting the right evidence and presenting to the key decision makers in the banks is something our mortgage brokers do on a daily basis.
We get tough loans approved and we stand by that motto!
We’re often able to get the best results for foreign citizens because we understand credit policy and we have the experience to know when policy can bent by using a lender that uses common sense.
Are you thinking about buying property in Australia?
Discover how relationships with a number of major banks and lenders can help you qualify for a mortgage in Australia.
Call 1300 889 743 or +61 2 9194 1700 (if you’re calling from outside of Australia) today. Alternatively, complete our free assessment form to explain your situation in full.