Jump to content
Andrew from Vista Financial

Mortgages/Grants/Buying Property update

Recommended Posts

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


Financial Adviser (FPA Member AFP ®) Specialising in UK Expat Advice and Pension Transfers / AR-322874 /AFSL-234951

SMSF Accredited Adviser / UK SIPP Authorised Adviser 

Director  - Vista Financial Services – www.vistafs.com.au 08 8381 7177

 

Please note that my advice is general advice only and professional financial advice should be sought for your own personal situation.

Share this post


Link to post
Share on other sites

A great thread Andy, I have made this a sticky as it's something we get lots of questions about.


If you are depressed you are living in the past. If you are anxious you are living in the future. If you are at peace you are living in the present.

Share this post


Link to post
Share on other sites

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 :)


14/03/2012 App for RSMS Cert, 10/04/2012 Received ack letter from Immi for 857 app, 22/05/2012 Letter from Immi looking for further doc, 26/06/2012 Offer of RSMS Skilled Health Waiver from Immi due to failing medical, 13/07/2012 Sent Skilled Health Waiver documentation

Share this post


Link to post
Share on other sites
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


Financial Adviser (FPA Member AFP ®) Specialising in UK Expat Advice and Pension Transfers / AR-322874 /AFSL-234951

SMSF Accredited Adviser / UK SIPP Authorised Adviser 

Director  - Vista Financial Services – www.vistafs.com.au 08 8381 7177

 

Please note that my advice is general advice only and professional financial advice should be sought for your own personal situation.

Share this post


Link to post
Share on other sites
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


Financial Adviser (FPA Member AFP ®) Specialising in UK Expat Advice and Pension Transfers / AR-322874 /AFSL-234951

SMSF Accredited Adviser / UK SIPP Authorised Adviser 

Director  - Vista Financial Services – www.vistafs.com.au 08 8381 7177

 

Please note that my advice is general advice only and professional financial advice should be sought for your own personal situation.

Share this post


Link to post
Share on other sites

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

Share this post


Link to post
Share on other sites

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


Financial Adviser (FPA Member AFP ®) Specialising in UK Expat Advice and Pension Transfers / AR-322874 /AFSL-234951

SMSF Accredited Adviser / UK SIPP Authorised Adviser 

Director  - Vista Financial Services – www.vistafs.com.au 08 8381 7177

 

Please note that my advice is general advice only and professional financial advice should be sought for your own personal situation.

Share this post


Link to post
Share on other sites
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.

Share this post


Link to post
Share on other sites

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:


175- 23rd April 2011 -VisaGranted-21/11/2011........ Landed in Queensland June 2012. Let the fun begin........:ssign17:

Share this post


Link to post
Share on other sites
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


Financial Adviser (FPA Member AFP ®) Specialising in UK Expat Advice and Pension Transfers / AR-322874 /AFSL-234951

SMSF Accredited Adviser / UK SIPP Authorised Adviser 

Director  - Vista Financial Services – www.vistafs.com.au 08 8381 7177

 

Please note that my advice is general advice only and professional financial advice should be sought for your own personal situation.

Share this post


Link to post
Share on other sites

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.


175- 23rd April 2011 -VisaGranted-21/11/2011........ Landed in Queensland June 2012. Let the fun begin........:ssign17:

Share this post


Link to post
Share on other sites

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


Financial Adviser (FPA Member AFP ®) Specialising in UK Expat Advice and Pension Transfers / AR-322874 /AFSL-234951

SMSF Accredited Adviser / UK SIPP Authorised Adviser 

Director  - Vista Financial Services – www.vistafs.com.au 08 8381 7177

 

Please note that my advice is general advice only and professional financial advice should be sought for your own personal situation.

Share this post


Link to post
Share on other sites

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.


175- 23rd April 2011 -VisaGranted-21/11/2011........ Landed in Queensland June 2012. Let the fun begin........:ssign17:

Share this post


Link to post
Share on other sites

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??


made the move, living the dream, happy families and happy days ....

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

×