What is the process of buying a home for my daughter?

Any general questions you might have in regards to loans and finance.
Clarissa E
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Joined: Fri Jul 26, 2019 7:04 pm

What is the process of buying a home for my daughter?

Postby Clarissa E » Fri Jul 26, 2019 7:06 pm

Hi there, Clarissa here. I am a Singaporean citizen. My daughter is currently studying at the University of Melbourne on a subclass 500 student visa. She has a desire to stay in Australia for a while and I was looking into buying a home for her in Melbourne currently listed at $631,000. I work as a Regional HR Director for a multinational company and earn around SGD 15,000 monthly.
What is the process of buying a home for my daughter?

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Otto Dargan
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Re: What is the process of buying a home for my daughter?

Postby Otto Dargan » Fri Jul 26, 2019 7:49 pm

Hello Clarissa. Welcome to the forums.

Thank you for reaching out to us.

Applying for a non-resident mortgage in Australia is quite a tedious process as there are many things you’ll need to take care of like:

  • Getting a team of professionals like conveyancer, mortgage brokers and if required an accountant and buyers agent.
  • Then, getting your loan pre-approved as this would help you get better investments.
  • The actual process of applying for a home loan can be a tough process for non-residents due to the complex lending criteria. However, if you can ensure that all the required loan documents are in place like your payslips, tax returns, etc, the process is simplified.
  • You are legally required to get Foreign Investment Review Board (FIRB) approval to buy property in Australia. This usually takes up to 2 weeks from the time of application. You apply for this when you have found your property.
  • If you already have a property in mind, it is a good idea to value your property.
  • Be sure to negotiate your property price and request the vendor for a cooling-off period so you put a holding deposit and sign the contract.
  • Once you have found your property, sign the contract of sale (make sure it has the clause “subject to FIRB approval”) and forward it to your mortgage broker for formal approval. Do not commit to buy the property until the mortgage is formally approved.
  • Once the loan is formally approved and you have exchanged your contract, you will need to put down a deposit (which is usually 10% of property value)
  • Once the contract is exchanged, forward the signed copy for FIRB approval. If your daughter is the appointed Power of Authority, she can sign the contract on your behalf.
  • Then, the settlement happens, where the property changes hands and your loan is advanced.

However, you do not have to worry. We are here to help.

We are experts at obtaining competitive home loans for non-residents. Please complete our free assessment form or call us on 1300 889 743, or +61 2 9194 1700 if you’re outside Australia.

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

Clarissa E
Posts: 3
Joined: Fri Jul 26, 2019 7:04 pm

Re: What is the process of buying a home for my daughter?

Postby Clarissa E » Fri Jul 26, 2019 7:50 pm

That is a long process, but it will all be worth it for my daughter. Considering that I am abroad, are there any limitations on how much I can borrow?

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Otto Dargan
Mortgage Specialist
Posts: 7600
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
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Re: What is the process of buying a home for my daughter?

Postby Otto Dargan » Fri Jul 26, 2019 8:07 pm

Hi Clarissa,

We have to look into if your income is an acceptable currency and Singapore Dollars is an acceptable currency.
  • You can borrow up to 70% of property value for a new property, but interest rates can go up to 8% p.a.
  • You can borrow up to 55% at interest rates below 5% p.a. if you have a high net worth and earn primary currency.
Since you are not borrowing over 80% of property value, then you save some money by not paying for Lenders Mortgage Insurance LMI.

The interest rates vary depending on where you are applying for your loan from and your primary currency. You can even go for interest-only loans (for a maximum of 5 years).

The lenders will complete a serviceability assessment to calculate how large of a loan you can repay. Our best lenders will actually use 100% of your foreign income if you are in a strong financial position.


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

Clarissa E
Posts: 3
Joined: Fri Jul 26, 2019 7:04 pm

Re: What is the process of buying a home for my daughter?

Postby Clarissa E » Fri Jul 26, 2019 8:09 pm

Are the extra costs for applying for a loan going to be extremely high?

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Otto Dargan
Mortgage Specialist
Posts: 7600
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
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Re: What is the process of buying a home for my daughter?

Postby Otto Dargan » Fri Jul 26, 2019 8:26 pm

There are various other expenses associated with purchasing a property.

  • Legal fees often start from $800 to $2,000.
  • Loan establishment fees: Usually cost from $0 to $895 depending on the lender. For foreign citizens, this may be up to 4% of the loan amount.
  • Stamp duty: State government taxes which are often the largest associated expense. Please refer to our stamp duty calculator.
  • Additional stamp duty: Please see the foreign citizen stamp duty page for more information about changes made to stamp duty and land tax for foreign buyers. These changes aren’t always reflected accurately by our calculator due to regular changes to state government policy.
  • FIRB approval fees: Varies depending on the value of your property and if you are a temporary resident or foreign investor with no Australian visa.
  • Property inspection fees: Costs can be upwards of $800 in total for a building, pest and strata inspection.
  • Buyers agents fee: The fee varies depending on the nature of the services provided but they’re generally up to 2% of the purchase price (a buyers agent is optional).
  • Other minor costs: Building insurance, council rates, water rates and adjustments can be up to 0.5% of the property value in total.

We are experts at obtaining the cheapest home loans for non-residents Please complete our free assessment form or call us on 1300 889 743, or +61 2 9194 1700 if you’re outside Australia.

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


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