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Expat looking to purchase an investment property | Give me the low down

Posted: Mon Jun 03, 2019 5:28 pm
by Warnie
Hi, I’m an Aussie working in Hong Kong for the last six years as an in-house programmer and trainer. I earn roughly $600,000 HKD which is roughly $100,000 AUD. I’m looking at purchasing a unit on the south coast, the contract price is $730,000. I can contribute 10%-15% deposit, and cover stamp duty, and other associated costs. First off, do banks lend 90% of the property value to expats?
As this will be my first big investment, give me a low down of what I should look out for?

Re: Expat looking to purchase an investment property | Give me the low down

Posted: Mon Jun 03, 2019 5:49 pm
by Otto Dargan
Hello Warnie. Welcome to the forums.

Australian living overseas typically need 10% of the deposit plus additional costs to complete the purchase of the property. You can use our property purchase costs calculator to get an estimate of the additional costs involved as well as the stamp duty.

When borrowing as an expat living overseas, you’ll need to consider:
  • Currency: Hong Kong Dollars (HKD) is one of the preferred currencies of Australian lenders.
  • Income shading: Most lenders will use 60% to 90% of your actual income
  • Taxation: Australian tax rates even if you’re paying minimal or no tax at all.
Give us a call on 1300 889 743 or fill in our free assessment form to find out if you qualify for an expat home loan.

Cheers,

Re: Expat looking to purchase an investment property | Give me the low down

Posted: Mon Jun 03, 2019 6:17 pm
by Warnie
Okay. Can you tell me how much of my foreign PAYG income as well as the dividend income from shares (Hong Kong Stock Exchange) will be considered? What’s the maximum I can borrow?

Re: Expat looking to purchase an investment property | Give me the low down

Posted: Mon Jun 03, 2019 7:41 pm
by Otto Dargan
Hi Warnie,

Exchange rate fluctuations, foreign tax rates, negative gearing benefits and repayments on foreign debts can mean calculating your borrowing power can get complicated and will vary between lenders.
Most lenders will use:
  • 60% to 90% of your actual income will be considered when assessing your borrowing power.
  • Australian tax rates even if you’re living in a country with minimal or no tax.
  • No negative gearing benefits (some lenders allow negative gearing benefits for expats).
  • Loaded repayments on your foreign loans.
If your payslips or foreign tax returns are in English those can be used to verify your PAYG income. You’ll also need to provide three month’s bank statements to show your salary being deposited in your bank account.

Most lenders will accept 50% to 100% of share and/or dividend income as long as it can be evidenced via 2 years tax returns and the shares that earned the income are not being cashed out as funds to complete.

You can use our borrowing power calculator to get an estimate.

Cheers,

Re: Expat looking to purchase an investment property | Give me the low down

Posted: Mon Jun 03, 2019 8:30 pm
by Warnie
Who can I use as a witness for the mortgage documents?

Re: Expat looking to purchase an investment property | Give me the low down

Posted: Mon Jun 03, 2019 8:49 pm
by Otto Dargan
Hi Warnie,

If you’re overseas, it’s quite handy if you have a Power Of Attorney (POA) that can sign documents on your behalf. Some lenders require you to have a POA that meets their requirements. While other lenders do not accept a POA. You’ll need to courier documents overseas and have them witnessed at the Australian consulate in that case. It’s a good idea to ask your mortgage broker what the lender’s requirements are before you decide on a lender.

We specialise in Australian expat home loans.

Speak with one of our specialist mortgage brokers by giving us a call on 1300 889 743 or by filling in our free assessment form to find out if you qualify for an Australian expat mortgage.

Cheers,