Buy Property in Australia from Overseas Series Part 2: Important Info About Financing Your Property

(Read Part 1 of the Buy Property in Australia from Overseas series)

Unless you have all of the cash needed to purchase Australian property, you will need to finance your property through an Australian bank or lender. With a number of different Australian lenders available to overseas buyers, you should work with an experienced mortgage broker who can help you find the best loan agreement terms from a reputable bank. Even with professionals on your side, it’s always best to understand the basic process of financing your overseas property before speaking to a broker and applying for a loan.


Get Approval From the FIRB


The Foreign Investment Review Board is not responsible for handling the financing of your property, but you won’t even be able to get financing if you don’t have approval from this government entity first. You can easily apply online or through email or fax, and most foreign property buyers find that the approval process isn’t hard it’s just a waiting game from application to approval.


Speak with a Mortgage Broker


While it is possible to secure lending on your own, it’s much easier to do with an experienced mortgage broker. An Australian broker will be familiar with the local lending institutions, and he or she may even be able to get you a deal you couldn’t land without their help. A broker will also ensure that you have all of the necessary paperwork needed, and will help facilitate the application process.


Reasons Loans Are Delayed or Denied


In a perfect world, every person who applies for a real estate loan gets approved. But with an ever changing economy and lending institutions needing to safeguard themselves from bad loans, borrowers sometimes find themselves with a loan denial. Understanding what could cause a loan denial or delay is the best way to avoid rejection.


Lending institutions may deny a loan if you’ve recently changed jobs or haven’t had a steady income in the last few months. While most property buyers understand the need for a consistent cash flow in order to apply for a loan, something as simple as a career change can interrupt that flow temporarily and cause a lender to question the loan application. The type of property you’re buying could affect your loan. If you’re looking to buy commercial property that could be hard to resell should the bank need to foreclose, you may be denied.


Also, if you have bad credit or little credit history it can affect your loan application. In order to help ensure your loan approval, make sure that your application shows the lender that you are capable of repaying the mortgage per the term agreements by having a solid work history, a good credit report, and decent amount of money to put down on the property.


Needed Documents and Paperwork


Once you begin working with a broker or a lender, you will need to provide certain documents. Each lender will be different, but you may need to provide a copy of your passport or national registration identity card with the application. You will also need three to six months worth of copies of your pay slips. An income tax return document will also need to be provided, and if you’re self-employed you may need to provide two to three years’ worth of tax returns. The lender will request your credit report and any other financial information directly from the institutions.


The next post in the series will discuss why mortgage pre-approval is important for overseas buyers.



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