457 visa

Any general questions you might have in regards to loans and finance.
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helenb
Posts: 2
Joined: Sun Oct 11, 2009 8:41 pm

457 visa

Post by helenb »

my son-in-law has a 457 Visa and is sponsored by his work they intend to apply for permanency when the 2 year restrictions are finished.

They have been told that they will need a deposit of $80,000 for a home loan of $400,000, they are so disappointed and my have to rent.

Can you tell me if the can get a home loan, and if they had a guarantor would that make a difference?.
How much equity would the guarantor need to have for them to have a home loan of $400,000?.

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Otto Dargan
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Re: 457 visa

Post by Otto Dargan »

Hi Helen,

In most cases your son would require around 24% of the purchase price to be able to buy a property. This is 20% as a deposit and 4% to cover costs such as stamp duty. He can borrow up to 80% of the property value with a mortgage.

There are some exceptions to this rule:

* If he is a medical professional (see full list of professions on our 457 visa page)
* If he is married or defacto with an Australian citizen
* If he has a guarantor that can provide additional security using a property or term deposit in Australia.
* For strong applicants we can consider a loan of up to 90% of the property value! Generally you must have excellent savings, have a good income, be 12 months in his job and a clear credit history.

If you would like to guarantee his home loan and have a property in Australia then this can likely be accomplished. If you do not own property in Australia then I would recommend that you borrow against a property you have overseas and lend this to your son as a deposit. In several years time he can refinance his loan and repay the loan to you.
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

helenb
Posts: 2
Joined: Sun Oct 11, 2009 8:41 pm

Re: 457 visa

Post by helenb »

Thanks Otto, this makes it a little clearer, one last question.... I have a home in Australia, how much equity do I need for them to borrow money for a home,
We have been told that no deposit would be required should he have a guarantor here in Australia but they would need sufficient equity to cover a mortgage of $400,000. `do you know how much it would need to be??.

They do have some deposit but 24% would be out of their reach!!

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Otto Dargan
Mortgage Specialist
Posts: 7730
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
Contact:

Re: 457 visa

Post by Otto Dargan »

Hi Helen,

As a general rule the amount of the guarantee plus your loan must be less than 80% of the value of your property. The math for this can be a little complex so if you like we can call you or your son in law to discuss this in detail.

So for example say your son in law wanted to buy a home for $500,000 and had $30,000 as a deposit.

104% of $500,000 = $520,000 (total cost of home + stamp duty etc)
Less $30,000 deposit = $490,000
Maximum loan for son in law $400,000 (80% of purchase price)
Amount of guarantee = $90,000 (Difference)

Your loan $400,000 + $90,000 guarantee = $490,000
Divide by 0.8 = $612,500

So the minimum value of your property would have to be $612,500. This is an example only, I'd recommend you discuss this with us in detail as it can be a little complex.

Not many lenders will allow someone on a 457 visa to take a guarantor mortgage, in particular if they are taking a 2nd mortgage for the guarantee. I know of at least one lender that can help with an excellent discount. We would need to see the full situation to work out which other lenders could help.
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

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