Can I get a loan to invest in Australian property?

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Chekhov
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Joined: Mon Jul 15, 2013 5:49 pm

Can I get a loan to invest in Australian property?

Post by Chekhov »

Good evening.. I am looking to invest in some Australian properties.

I am living in England so I was wondering if it is possible for a foreigner like me to get a loan to buy real estate there? And what are the conditions, etc.?

Thanks in advance

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Otto Dargan
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Re: Can I get a loan to invest in Australian property?

Post by Otto Dargan »

Hi Chekhov,

Yes you can apply for a non resident home loan to buy a property in Australia. Most of our foreign investors come from the US, Singapore, Mexico, Netherlands and the UK.

You will be allowed to borrow up to 80% of the property value in most cases or only 75% if you cannot provide evidence of your income or if there is trouble verifying your documents..

You will also need to get FIRB approval.
The FIRB (Foreign Investment Review Board) is a governmental body which reviews purchase applications made by all foreigners for property in Australia.

The FIRB will also place certain restrictions on your purchase as follows:
  • You can only buy a new property
  • You can only buy vacant land to build a new property on it
  • You are not allowed to live in your property since you do not have a visa, however you can rent it out to your child for him or her to live in
Cheers,
Otto
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

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Chekhov
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Joined: Mon Jul 15, 2013 5:49 pm

Re: Can I get a loan to invest in Australian property?

Post by Chekhov »

Okay so I can’t buy a property which someone has already lived in and I don’t get a visa or anything by buying property. What if I want to apply for a citizenship? Will this help? And how do I apply for an FIRB approval?

I don’t get these restrictions though………..

Could you please also tell me more about the buying process since I am not familiar with the Australian system.

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Otto Dargan
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Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
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Re: Can I get a loan to invest in Australian property?

Post by Otto Dargan »

Chekhov,

We do not know if buying or owning a property in Australia will affect your application to be a resident of Australia.

For FIRB approval, you can apply for it on the official FIRB website. This should take you about two weeks.

The reason why the government reviews all foreign purchase applications and restricts them is to ensure that any investment is for the good of the country. This moves the economy positively and prevents a sudden increase in real estate prices.

Regarding the buying process in Australia:
Organise your property investment team
You need a conveyancer or a solicitor to handle all the legal work. This person should have a license to practice in the same state that you are buying a house in.

It is also recommended that you hire a mortgage broker because they will be able to offer a better range of loan products than a bank. It is also not certain if the bank you want to apply at caters to non residents, however a specialist mortgage broker will be able to find you the right lender for you.

You also might need an accountant to handle your financials and help you save on tax. If your intention is to start a company in Australia then you definitely need an accountant.

Lastly you can also procure the services of a buyer’s agent. This is someone who can visit the property you want and negotiate the prices for you so that you will not have to come to Australia yourself.

Apply for the loan
If you have contacted a mortgage broker then you just need to send them your details and documents such as bank statements, pay slips, tax returns and identification.

If you haven’t already found a property you can also get a pre-approval from the lender which will make the entire process faster and make it easier to negotiate with the seller. This is also the time to apply for FIRB approval if you have not already done this.

Speaking of negotiating with the seller, make sure you look at the purchase contract before signing it. If you have a conveyancer, ask them to verify that the contract. There should be a clause in the contract which states that the purchase is “subject to FIRB approval”. A buyer’s agent will also be able to ensure that you are not being charged an unfair amount for the property.

You can then forward the contract of sale to the broker or the bank and the FIRB. You will usually need to put up a 10% deposit. By this time you will probably receive the loan contract from the bank.

Once you have been approved for your home loan and you have signed the loan contract, Then you can forward a copy of the contract of sale to the FIRB.

The actual settlement can be handled by your conveyancer and they should be able to handle all the remaining paperwork as well as the transfer of the property titles.

If you need more help with your home loan then please give us a call on +61 2 8668 4038. You can also send us an online enquiry if that is more convenient for you.

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

aurora
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Joined: Mon Jul 15, 2013 1:06 pm

Re: Can I get a loan to invest in Australian property?

Post by aurora »

Otto I am a foreigner living in Australia who wants to buy a house here. My wife is Australian so will the same restrictions be placed on me?

Will my nationality also be a problem? (I am from Nepal)

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Chekhov
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Re: Can I get a loan to invest in Australian property?

Post by Chekhov »

Great stuff! Thank you very much for the simple explanation! I’m glad I asked you all these questions before going through with this :)

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Otto Dargan
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Re: Can I get a loan to invest in Australian property?

Post by Otto Dargan »

aurora wrote:Otto I am a foreigner living in Australia who wants to buy a house here. My wife is Australian so will the same restrictions be placed on me?

Will my nationality also be a problem? (I am from Nepal)
Hi aurora,

If you are here on a temporary visa and your spouse is an Australian citizen and both of you are applying for a home loan as joint tenants then you will not need FIRB approval for your purchase. You are also free to buy an existing property and can rent it out if you wish to.

Buying with an Australian spouse is also good for you since the lenders will consider less riskier and you will also be able to borrow more.

As far as we know, your nationality will also be an issue for this.

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

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

Re: Can I get a loan to invest in Australian property?

Post by Otto Dargan »

Chekhov wrote:Great stuff! Thank you very much for the simple explanation! I’m glad I asked you all these questions before going through with this :)
You are very welcome Chekhov, all the best with your purchase and feel free to post here again if you have any more confusions.

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

aurora
Posts: 52
Joined: Mon Jul 15, 2013 1:06 pm

Re: Can I get a loan to invest in Australian property?

Post by aurora »

Dhanyabad for the info and have a good day. I will talk to my wife and let you know what we plan to do.

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