Oz mortgage

[OmegaOz]

Hi

wondering if I could get some advice......I am an Australian citizen (by descent) living in UK with my wife, who is also British. In the next couple of years we are looking to make the move to Oz (applying for a partner visa for my wife). At the moment we rent in the uk, as we do not have enough of a deposit to buy. I started thinking about this and came up with a hypothetical situation, and I would be interested in any comments about why it might not work, or anything I haven't considered.

So.... before leaving for Oz in a couple of years, we take out a personal loan, say for £25k, which wouldn't be a problem as we have excellent credit rating. We would then use this as a deposit to buy a property in Australia, say for $490k. Taking advantage of the higher earnings in Australia (and not factoring in big changes to exchange rate etc.) a very rough figure I have calculated would be $46k a year needed to pay the mortgage payments and to pay the minimum monthly amount towards the uk loan. Even if we both only got average paying jobs, this would seem an easily achievable amount, with plenty left over for living expenses etc.

I have seen threads about overseas debt not being enforceable, but aside from it  being fraud to take out the uk loan without paying it back, I would want a clean conscience as well as a nice property!

So.....would this work? Would an Oz bank give someone a mortgage with a UK debt for about the same size as the deposit?! Do they ask about overseas debt? They aren't silly and would surely know you had taken this loan to get a deposit?

Any comments would be much appreciated, thanks

[Ken]

Oz banks are a lot sillier than you give them credit for. If you don't tell them about UK debts they don't know and they don't want to know. They also won't look favourably on UK assets or UK income, but if you get a job in Australia (don't be self-employed they hate that) they'll give you a mortgage on the strength of 3 months of payslips. They won't even ask for evidence of where the money came from if you've just emigrated (although if you've got it in cash rather than an Australian bank deposit that might raise some suspicions so better the loan than knocking over a post office!).

 

PS Overseas debts are enforceable - it's just a matter of whether or not the lender makes the effort.

Edited April 19, 2017 by Ken
Added PS

[OmegaOz]

So, my plan should work, I would just need to secure a job first and wait a few months so I had proof of earnings. I suppose this would also give me time to build up a bit of an Oz credit rating too. When you hear about people emigrating to Oz and buying a house straight away, how is this possible if they don't have an Oz credit rating?

[Ken]

16 minutes ago, OmegaOz said:

So, my plan should work, I would just need to secure a job first and wait a few months so I had proof of earnings. I suppose this would also give me time to build up a bit of an Oz credit rating too. When you hear about people emigrating to Oz and buying a house straight away, how is this possible if they don't have an Oz credit rating?

Oz credit ratings don't work like UK credit ratings. If you've never had any Oz finance then you've never made a late payment, have never defaulted, and have never made an excessive number of applications for credit (which is a warning to be careful when using a broker as they can ruin your credit history by applying to multiple lenders) so at the moment you have a perfect Oz credit rating. It can only go downhill from there.

The exception seems to be post-pay mobile phone contracts which can be difficult to obtain without actual Oz history so everyone starts out with a pre-pay phone.

[Slean Wolfhead]

On 4/20/2017 at 7:49 PM, Ken said:

The exception seems to be post-pay mobile phone contracts which can be difficult to obtain without actual Oz history so everyone starts out with a pre-pay phone.

 

yes, i remember having trouble with this.  The missus was working and earning the dough with her proof of earnings, while i setup the home, utility bills, registrations and didn't work for 3 months. 

We went to get mobile contracts and she was refused but i got one, despite no job or income.  Turns out, they're looking for a credit history and proof of actually paying for something, rather than the actual credit rating.

It's a good tip for new immigrants, make sure you spread the first accounts you setup across both names and each put at least one in your own name so you enter the system quickly. Helps you lift off.