Andrew from Vista Financial Posted October 30, 2012 Share Posted October 30, 2012 Hello I thought that I would just give an update on the state of play with Mortgages, grants and the buying process currently as things to tend to change regularly. Mortgage Deposit / Loan to Value (LVR) requirements The minimum deposit requirements at the moment range from 5% – 10%, this means that the maximum loan to value (LVR) would be 90% - 95%. As an example if a lender required a 5% deposit on a $350,000 property the loan to value would be 95% i.e $17,500 deposit (therefore mortgage amount $332,500 / property price $350,000 = 95% LVR) Different conditions apply to Temporary Residents (see below) Lenders Mortgage Insurance If someone is borrowing over 80% LVR i.e they have a deposit of less than 20% then a Lenders Mortgage Insurance (LMI) premium is payable. This is a one off insurance premium that is designed to protect the lender in the event of a default by the borrower leading to the lender having to sell the property at a price less than the outstanding loan. The premium payable is tiered based upon the overall LVR and property price. As an example of the cost of LMI, a property price of $350,000 with an LVR of 90% i.e $315,000 mortgage would incur a Lenders Mortgage Insurance premium between $4,600 - $5,800 dependent upon the lender. This fee can be paid directly from your own funds or in many cases added to the mortgage, by adding to the mortgage this is known as capitalising the LMI. There are some lenders that are in a position to offer a reduced LMI premium under certain conditions, one being that certain Medical Professionals pay no LMI up to 90% (this could save thousands!!) Costs to Buy (Stamp duty etc) This varies from state to state and can in some cases be up to around 5% (the 5% relates to South Australia). Home Owner Grants and Concessions Again these vary from state to state: For ACT see here: http://www.revenue.act.gov.au/home_buyer_assistance/first_home_owner_grant For NT see here: http://www.nt.gov.au/ntt/revenue/home_assist/first_home.shtml For SA see here: http://www.revenuesa.sa.gov.au/fhog/index.html For TAS see here: http://www.sro.tas.gov.au/fhog For VIC see here: http://www.sro.vic.gov.au/SRO/sronav.nsf/childdocs/-6BF180369BCB3975CA2575A1004420CF-65A02CC2EEDDD527CA2575A1004420E8?open For WA see here: http://www.finance.wa.gov.au/cms/section.aspx?id=209 For QLD see here: http://www.osr.qld.gov.au/duties/transfer-duty/exemptions-and-concessions/home-transfer-duty-concession-rates.shtml For NSW see here: http://www.osr.nsw.gov.au/benefits/first_home/ Temporary Residents Temporary residents are allowed to buy property and are able to obtain mortgages to do so however there are usually some conditions. Foreign Investment Review Board (FIRB) approval - http://www.firb.gov.au/content/real_...esidential.asp It is a requirement to obtain FIRB approval prior to purchasing a property. If the property is to be used as your main residence then there are generally no issues with the type of property purchased i.e new or established. FIRB approval for temp residents buying a home is generally a formality but does have to be obtained. Mortgages restricted to 80% Generally temporary residents are restricted to borrowing a maximum of 80% LVR meaning a deposit of at least 20% is required. The reason behind this is due to the Lenders Mortgage Insurance companies classing temporary residents as non-residents and their reluctance or an inability to insure them. That said, it is possible in some cases for temporary residents to borrow over 80% but the case must be of strong merits. Hope this helps, Regards Andy Quote Link to comment Share on other sites More sharing options...
Guest The Pom Queen Posted November 5, 2012 Share Posted November 5, 2012 A great thread Andy, I have made this a sticky as it's something we get lots of questions about. Quote Link to comment Share on other sites More sharing options...
DebraWiddicombe Posted February 4, 2013 Share Posted February 4, 2013 Is it a requirement to obtain FIRB approval prior to purchasing a property if you are a British citizen with permanent residence? Quote Link to comment Share on other sites More sharing options...
AlburyAhoy Posted February 4, 2013 Share Posted February 4, 2013 We just got a 90% homeloan approved from Westpac as 457 temporary visa holders! Yahoo. We also got the good news a couple of days later that we got permanent residency! Double good news but they did grant us the loan as temporary visa holders. So they are worth looking at people! Great to deal with too Quote Link to comment Share on other sites More sharing options...
Andrew from Vista Financial Posted February 5, 2013 Author Share Posted February 5, 2013 Is it a requirement to obtain FIRB approval prior to purchasing a property if you are a British citizen with permanent residence? Hi Debra If you someone is a permanent resident of Australia then they do not require permission from FIRB to buy a residential property. Kind regards Andy Quote Link to comment Share on other sites More sharing options...
Andrew from Vista Financial Posted February 5, 2013 Author Share Posted February 5, 2013 We just got a 90% homeloan approved from Westpac as 457 temporary visa holders! Yahoo. We also got the good news a couple of days later that we got permanent residency! Double good news but they did grant us the loan as temporary visa holders. So they are worth looking at people! Great to deal with too Great news, there are a couple of lenders out there that will go above 80% in certain circumstances so long as the case is very strong. I have secured 95% for temporary residents in the past but 90% seems to be the maximum out there now. Congratulations on PR BTW!! Andy Quote Link to comment Share on other sites More sharing options...
pope6 Posted August 11, 2013 Share Posted August 11, 2013 Hi i just spoke to someone from Aussie Mortgages and he told me some lenders will accept equity in a UK house towards a deposit here. It seemed so unlikely that i didn't push him on which banks and thought I'd come home to do my own research. I can't find anything obvious about it on the net, so my question is will an Oz bank accept equity that is in a UK property as part of a deposit or in lieu of mortgage insurance. To be clear I'm not talking about me taking the money out via a UK bank (because as i haven't had a UK income for some time i think that would be difficult). Thanks in advance Quote Link to comment Share on other sites More sharing options...
Andrew from Vista Financial Posted August 12, 2013 Author Share Posted August 12, 2013 Hi I am not aware of any mainstream Australian Lender that will accept UK security for an Australian Mortgage. That's not to say it is not the case but personally I have not come across any that will and I have made inquiries into this in the past. Regards Andy Quote Link to comment Share on other sites More sharing options...
pope6 Posted August 12, 2013 Share Posted August 12, 2013 Hi I am not aware of any mainstream Australian Lender that will accept UK security for an Australian Mortgage. That's not to say it is not the case but personally I have not come across any that will and I have made inquiries into this in the past. Regards Andy Hi Andy Thanks for that. I'll let you know if i find anything more about it. Quote Link to comment Share on other sites More sharing options...
Eng32 Posted November 21, 2013 Share Posted November 21, 2013 Hi, do we need to have our mortgage deposit in Austraian bank account for 3 months before we can use it to apply for our mortgage?? This was mentioned to use a day age by a bank advisor but not sure as they've been a bit slow and rubbish so far. We already had half the deposit here but just transferred the rest a day ago. Help on this matter would be very appreciated :confused: Quote Link to comment Share on other sites More sharing options...
Andrew from Vista Financial Posted November 21, 2013 Author Share Posted November 21, 2013 Hi, do we need to have our mortgage deposit in Austraian bank account for 3 months before we can use it to apply for our mortgage?? This was mentioned to use a day age by a bank advisor but not sure as they've been a bit slow and rubbish so far. We already had half the deposit here but just transferred the rest a day ago. Help on this matter would be very appreciated :confused: Hi Not necessarily. If borrowing over a certain amount around 90% then generally genuine savings are required as part of the lenders mortgage insurance (LMI) policy. This policy is that 5% of the purchase amount should be held for a 3 month period (this may be any type of investment of equity in a property) or progressively saved over a 3 month period. With some lenders there may be exceptions to this for example if you have rented a property through a licensed property manager for a period of time etc. Which Bank are you referring to please? Regards Andy Quote Link to comment Share on other sites More sharing options...
Eng32 Posted November 21, 2013 Share Posted November 21, 2013 We have 14% deposit in total, of which half of that has been in our Aus account. Well be borrowing less than 90%. It was cuA who are questioning this, tbh they don't even know themselves, there trying to look into it. Quote Link to comment Share on other sites More sharing options...
Andrew from Vista Financial Posted November 21, 2013 Author Share Posted November 21, 2013 Thanks. Not sure about CUA as I do not have them on my panel however from what you have said there are definitely lenders out there that would be able to assist as some do not require genuine savings at 90% or less. Let me know if you need assistance. Regards Andy Quote Link to comment Share on other sites More sharing options...
Eng32 Posted November 21, 2013 Share Posted November 21, 2013 Thanks so much Andy, we'd very much appreciate your help if you can assist us in getting a mortgage. I'll Email you my details. Thanks again. Quote Link to comment Share on other sites More sharing options...
belaroy Posted January 20, 2014 Share Posted January 20, 2014 I recently enquired with Aussie home loans as to how much we can borrow. I earn $50k per year and my wife has just started her part time business and we were told her small earnings could not be used as she has not been in business for 2 years. We have about $115k deposit on a $370 k house and were told the best we could borrow was $84 K ??? Do the banks not take into account the size of your deposit ??? How the hell do people borrow the huge sums needed to buy a house here?? Quote Link to comment Share on other sites More sharing options...
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