Self Emp + Overseas

Any general questions you might have in regards to loans and finance.
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SelfOverseas
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Self Emp + Overseas

Post by SelfOverseas »

Is it possible to get a low doc for my case

- a permanent resident, relocating back to Au
- now overseas, will be onshore on time of application
- no ABN as located overseas
- a contractor with an overseas company for more than 2 years, the company is willing to give a confirmation that the contract will be prolonged for several years
- an overseas income which can be confirmed is 85 000 USD gross, can be confirmed by a bank statement from an overseas bank for the last year( not in English, but can be translated in Australia ), a letter from the company in English ( the company has a USA office ), taxes on overseas income were paid overseas ( more than 183 days overseas, no property in Australia - non resident for tax purposes in Australia by ATO rules )
- an Australian income for Oct. 2008-2009 is 55 000 AUD ( have a PAYG for 8 months ) and for 2009-2010 is 11 000 AUD ( w/o PAYG ), taxes on Australian income were paid to ATO
- FHB , 2 dependents
- no current debts, no bad credit history ( actually no any credit history in Australia )
- a property price is 250 000 , a deposit 150 000 or more
- this is not an investment property, will be used as a primary residence

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Otto Dargan
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Re: Self Emp + Overseas

Post by Otto Dargan »

Yes we can assist in your situation, although it is more difficult than usual.

Basically this is how it would work:

- As a permanent resident of Australia temporarily living overseas you are allowed to borrow up to 95% of the value of the property.
- You should apply for an Australian ABN as soon as possible. You can apply for an ABN at http://www.abr.gov.au/
- Your contract / proof of income is the main issue. There are many factors to consider before we can be sure of which lender is the best choice. We would need to see:
- A copy of your current contract.
- A copy of your new contract confirming you will be working for them from Australia.
- A copy of your last two years tax returns both in Australia and overseas.
- A copy of any invoices issued by you to the company you work for.

In addition to this, which country are you living in at the moment? Our tracking system indicates that you are in Moscow, is this correct?

Please note that if you cannot provide a new contract confirming the work will continue in Australia then you can't buy a property as a home. However you can buy it as an investment property. This is because if you are buying it as a home then you would be leaving your job, therefore would have no income, therefore the bank will decline the loan! If you buy an investment property you can always change your mind and move into the property later on. Depending on which state you are buying in you may also be able to claim the grant later on.
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Otto Dargan
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Re: Self Emp + Overseas

Post by Otto Dargan »

By the way you can apply for a limited income evidence (similar to low doc) product which has lower income evidence requirements, although the rate would be higher. A low doc would be limited by not having an Australian ABN for at least 6 months. There are a few lenders that can get around this requirement however they are more expensive.
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SelfOverseas
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Re: Self Emp + Overseas

Post by SelfOverseas »

Otto Dargan wrote: If you buy an investment property you can always change your mind and move into the property later on. Depending on which state you are buying in you may also be able to claim the grant later on.
This option looks better.
What are the requirements? What will be a rate? What are chance to get an approval?

Your tracking system was correct - I am writing from Moscow ( I am living in a property which is owned by my family so I don't pay a rent ) and I am a Russian citizen and a permanent resident of Australia( lived in Australia Oct 2008-Aug 2009 ).

LVR will be 40% or less ( I am borrowing less than AU$100,000 ).

I can show US$85,000 p.a. gross ( US$78,000 p.a. net ) - to confirm I can provide
- a contract( Sep 2009 - Jan 2012, there are appendices with a payment schedule which is updated for each 6 months )
- a letter from the company which confirms payments
- a letter from the company which confirms that the contract will be prolonged after Jan 2012
- an overseas bank statements( must be translated from Russian, a bank is a branch of an Austrian bank )
- invoices
- an assessment from a Russian Taxation Office ( but I think this won't be a much help as covers Sep 2009-Dec 2009, the next assessment for Jan 2010 - Dec 2010 will be on April 2011 ).

If required I can provide an Australian PAYG for Nov 2008-Jun 2009 ( AU$55,000 ) and tax return assessment from ATO for 2009-2010 ( AU$11,000 I paid as non resident for tax purposes ), I can't find a tax return assessment for 2008-2009( as I know I can require a copy by post, not sure ATO will send a copy to Russia ).

The Company is registered on BVI and has a USA office in California( the head of the office knows about me ), the Company was established in 1998. The company can confirm that I was a contractor and then a permanent employee from Oct 2002 to Oct 2008, the income can be confirmed( letters from a company accountant or owner and an assessment from Russian Taxation Office both for March 2005 - Oct 2008 ) and varies AU$30,000 to AU$70,000 gross ( depending on AUD exchange rate and time of employment ).
Otto Dargan wrote: Depending on which state you are buying in you may also be able to claim the grant later on.
The property will be in Regional NSW.
Correct me if I am wrong - if I move in a property for 6 continuous months during a 12 months after purchasing I can claim FHOG even if the property was declared as an investment ( Will the property be registered as an investment by a council? )
Otto Dargan wrote: By the way you can apply for a limited income evidence (similar to low doc) product which has lower income evidence requirements, although the rate would be higher. A low doc would be limited by not having an Australian ABN for at least 6 months. There are a few lenders that can get around this requirement however they are more expensive.
Would you clarify a little on this? What are chances?

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Otto Dargan
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Re: Self Emp + Overseas

Post by Otto Dargan »

In reply to your questions:

- Your contract appears acceptable. There are some issues such as translation etc however they are relatively minor. We have lenders that can accept your income.
- PR of Australia living overseas is acceptable.
- You can claim the FHOG in NSW up to 12 months after settlement, providing you move into the property within the first 12 months and remain in it for at least 6 months. Note that you may or may not receive the stamp duty exemption. As an investment property you would not receive this, as a home you would.
- I don't believe it would be necessary to apply for a low doc loan. We can get you a full doc loan as you can provide several types of documents as proof of your income & a long history in the same line of work.

Thanks
Otto Dargan
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SelfOverseas
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Re: Self Emp + Overseas

Post by SelfOverseas »

Otto Dargan wrote:In reply to your questions:

- Your contract appears acceptable. There are some issues such as translation etc however they are relatively minor. We have lenders that can accept your income.
The contract is on both English and Russian.
Otto Dargan wrote: - You can claim the FHOG in NSW up to 12 months after settlement, providing you move into the property within the first 12 months and remain in it for at least 6 months. Note that you may or may not receive the stamp duty exemption. As an investment property you would not receive this, as a home you would.
If I move in in the property in 2 months after settlement can I claim it as a primary residence and do not pay a stamp duty?
Otto Dargan wrote: - I don't believe it would be necessary to apply for a low doc loan. We can get you a full doc loan as you can provide several types of documents as proof of your income & a long history in the same line of work.
Sounds good. What is the difference in rates? Can I apply for both simultaneously?

Thanks for your answers

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Otto Dargan
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Re: Self Emp + Overseas

Post by Otto Dargan »

You pay stamp duty at the time the property settles. So if you move in two months later it is too late! You can apply for a refund however it is up to the NSW OSR & it is on a case by case basis. I do not know what your chances are.

The interest rates for an investment loan for someone in your situation range from 6.60% to 6.85%. For the low doc option they range from 6.95% to 7.80%. I would strongly recommend that you do not apply for both at the same time as this will almost certainly result in two declines. This is because it will damage your credit score.
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SelfOverseas
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Re: Self Emp + Overseas

Post by SelfOverseas »

Otto Dargan wrote:You pay stamp duty at the time the property settles. So if you move in two months later it is too late!
The last question to clarify on stamp duty.

Does OSR care about nature of a loan? Is a property registered as an investment property?
If I claim a property as a home and connect utilities on the time of settlement ( so no tenants, not advertised as a rental property, won't claim negative gearing ).

Thanks.
Last edited by SelfOverseas on Tue Oct 12, 2010 3:12 pm, edited 1 time in total.

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Otto Dargan
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Re: Self Emp + Overseas

Post by Otto Dargan »

The stamp duty exemption is claimed at settlement. If the loan is an investment loan and the lender sees a stamp duty exemption then they may withdraw the approval, leaving you unable to settle the purchase!

The OSR doesn't care about the loan, negative gearing / income tax implications etc.
Otto Dargan
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SelfOverseas
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Joined: Tue Oct 12, 2010 10:26 am

Re: Self Emp + Overseas

Post by SelfOverseas »

Otto Dargan wrote:The stamp duty exemption is claimed at settlement. If the loan is an investment loan and the lender sees a stamp duty exemption then they may withdraw the approval, leaving you unable to settle the purchase!

The OSR doesn't care about the loan, negative gearing / income tax implications etc.
Thanks, this means I should add AU$7,000 to the budget

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