Is the American greenback accepted?

Any general questions you might have in regards to loans and finance.
Marek
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Joined: Tue Apr 09, 2019 6:05 pm

Is the American greenback accepted?

Postby Marek » Tue Apr 09, 2019 6:08 pm

Hi, I hold citizenship of two countries namely, The United States and Australia. Currently, I’m in California working as an IT engineer earning $110,000 USD not counting any bonuses. I can provide the last six month’s pay stubs. I’m interested in purchasing a 3 bedroom property in the Gold Coast currently listed at $1.4 million AUD. I’m trying to figure out how much deposit will I need and whether or not the American greenback is accepted?

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Otto Dargan
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Re: Is the American greenback accepted?

Postby Otto Dargan » Tue Apr 09, 2019 6:55 pm

Hello Marek. Welcome to the forums.

Australian expats (dual citizen or not) will typically need a 10% deposit plus extra funds to cover property purchasing costs including stamp duty, legal fees, mortgage set up costs and Lenders Mortgage Insurance (LMI) also known as PMI (Private Mortgage Insurance) in the US.

You can use our property purchasing costs calculator to get an estimate.

The United States Dollar (USD) is among the most common currencies we deal with so, there’s a good chance that we will be able to help you get approved for an expat home loan.


Australian lenders are very strict with people borrowing over $1 million, so it’s best to discuss your situation with an experienced mortgage broker before you apply.

Give us a call on 1300 889 743 (+61 2 9194 1700 from outside of Australia) or fill in our free assessment form so we can help you get approved for an Australian expat home loan.

Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

Marek
Posts: 3
Joined: Tue Apr 09, 2019 6:05 pm

Re: Is the American greenback accepted?

Postby Marek » Tue Apr 09, 2019 7:47 pm

The downpayment is not an issue. The thing I’m concerned about is how Australian lenders will calculate my borrowing power. I’ve heard some lenders will use no more than 60% of my foreign income and others have said 90%. Can you help me understand how much I’ll be able to borrow?

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Otto Dargan
Mortgage Specialist
Posts: 7338
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
Contact:

Re: Is the American greenback accepted?

Postby Otto Dargan » Wed Apr 10, 2019 11:51 am

Hi Marek,

Due to exchange rate fluctuations, foreign tax rates, negative gearing benefits and repayments on foreign debts, calculating your borrowing power can get quite complicated.

Most Australian lenders will use:
  • Somewhere between 60% and 90% of your actual income.
  • Australian tax rates even if you’re living in a country without tax.
  • No negative gearing benefits.
  • Loaded repayments on your foreign loans. Lenders here basically apply a higher interest rate to your foreign debt as a buffer to make sure if your overseas rates were to rise you would still be able to afford the repayments.

We can help you maximise your borrowing power by applying with the right lender from our panel of almost 40 lenders.

Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

Marek
Posts: 3
Joined: Tue Apr 09, 2019 6:05 pm

Re: Is the American greenback accepted?

Postby Marek » Wed Apr 10, 2019 2:01 pm

What exchange rate do lenders use? I’m assuming the current market rates.

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Otto Dargan
Mortgage Specialist
Posts: 7338
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
Contact:

Re: Is the American greenback accepted?

Postby Otto Dargan » Wed Apr 10, 2019 6:57 pm

Hi Marek,

When converting your foreign currency (USD) into Australian dollars, most lenders will use their own exchange rate, which is far more conservative than the current market rate for your currency. This can have a big impact on your borrowing power.

Our specialist mortgage brokers can negotiate with lenders directly on what method of foreign exchange they use.
You can also use our borrowing power calculator to get a tentative estimate.

Give us a call on 1300 889 743 ( (+611 2 9194 1700 from outside of Australia) or fill in our free assessment form so we can help you maximise your borrowing power for an Australian expat home loan.

Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts


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