Australian credit has always been highly regulated by comparison to most other OECD nations. However a combination of recent consumer credit constraints and prudential constraints targeted at the over-heated Sydney and Melbourne markets has brought about very severe limits on non-resident lending.
While in terms of documentation it is still true that you are not being treated any differently to Aussie residents – the level of documentation required is much the same. However in terms of policy you are not being treated equally and in our opinion you are being unfairly disadvantaged due to over-zealous policy constraints that were originally intended to constrain foreign non-citizen buyers.
However there are still options but we need to have your supporting documents in order to complete an assessment of your options taking into account your ability to service the loan and fit within lender’s guidelines. We will provide you by email a detailed review and comparison with all interest rates and fees clearly stated.
Once you decide to proceed we will prepare the home loan application and provide this to you in order to sign off and only then will we submit the application and follow it through to settlement. While the process is the same as for resident applicants there are delays due to time zones and the need for some documents to be mailed/couriered. We strongly suggest that you allow 6 weeks for settlement and ensure that your contract of sale reflects this.
When it comes to policy or requirements no two lenders are the same and some do impose restrictions eg:
- some foreign currency incomes are not acceptable – this can be due to instability or taxation issues
- most lenders will use a 10% to 50% income buffer to allow for FX movements
- some countries are tax free or have no formal tax reporting, this can be problematic in proving your income unless you work for a multi-national
- many lenders will require an Australian resident with power of attorney and an Australian address for serving notices
- non Australian spouses will often be treated differently particularly if they do not have permanent residence status in Australia
- while your income may be tax free most lenders will use Australian ATO scales when calculating your servicing capacity