Stormfox

Hi all,

A couple of 'what if' questions really. We are currently going through the VISA process and I'm thinking a little ahead of the game really...

How easy is it to purchase a house in Oz?

We have quite a big deposit to put down ~£100k but I'm not sure how credit would work in Oz? Is it a good idea to bring a credit history folder over with us by our UK banks to support a mortgage application?

We would plan to rent for 6-8 months first before buying, so assume that would help in building up an credit file in Oz.

We currently have a house worth ~£350k in the UK, is the credit process similar in Oz?

How have other people managed the whole process of house buying?

Any info or guidance would be fantastic. Many thanks!

SoCalDon

My wife and I have just purchased a house and acreage in Queensland and, for us, getting financing was a pain in the arse. My income comes from a foreign (UK) pension and the banks don't like that in the slightest. Sal's income is partly from a government pension and they wouldn't consider that either.

We ended up buying the property using the equity of our current house so the bigger the deposit you have, the easier your experience will be.

Two more things to bear in mind is the stamp duty which, in Qld, is 1% of the purchase price and also the Foreign Ownership thingy which, as I just found out, is 3% of the purchase price.

Good luck with your plans though - all things are possible as Sal and I, despite our difficulties with lenders, have done pretty well.

Beoz

6-8 months of living and earning would be the important factor. They want to know you can service the debt. You don't want to dive in day 1 anyway. Check out areas, pricing (it varies a lot), get mortgage approvals, all the due diligence you would normally do. For many people, this will take 6 months. To avoid lender mortgage insurance you will need a down payment of 20%.

Wol

The most important advice is - don't ever trust an Australian estate agent. (No, this is not a sarcastic comment, just the truth.)

Obviously any history you bring is helpful. If you are getting a mortgage under the present low interest rates allow for them to increase otherwise you may find it difficult when they do.

Take your time to investigate the area: it took us nearly 2 years to conclude that the Northern Beaches were not for us (despite knowing the area for years) and eventually buy a site and build ourselves.

jon111

so even if you have permanent residence you have to pay a foreign owners fee/stamp duty??

SoCalDon

Permanent residents and citizens do not have to pay the foreign owners duty, just stamp duty.

rammygirl

Which state will you be moving to? 1% stamp duty in QLD?? Wow much more than that in SA.

First time homebuyers grants/ discounts are also available, but again it varies state by state.

spouse of scouse

No, permanent residents don't pay foreign owners tax. Everyone pays stamp duty.

B1K3R

Interesting thread, as we are planning to do the same...

Though my concern is that I'll be contracting with companies outside Australia. I of course will be able to show the earning/tax etc, but will the bank accept these to give us a loan?

We'll probably just need 1/5 or 2/5 (assuming we spend around 500/600K)

Cheers

SoCalDon

My experience with the Commonwealth Bank two weeks ago was that they really don't like foreign income at all and do not consider all of it due to the fluctuating exchange rates. Bizarrely, if we used a guarantor, they would not count my foreign income at all.

We didn't try any other lenders so I can only comment on the Commonwealth Bank.

B1K3R

Auch, I see. I'll go straight to the bank once I arrive there and ask, thanks mate!

I might need to ditch contracting and find a full time job...

Beoz

Does it matter if you are planning to rent for 6-8 months? By then you would have 6 pay slips (assuming monthly pay) and I think they only ask for 3.

They may ask for a bit of LMI if yoy haven't been in the job for long but you can wrap that up in a 30 year loan.

You can always test the waters early on by applying for a pre approval. This is something you would do anyway. They can only say no.

Stay away from the big 4 banks. Their rates suck and despite what the news says, they hate owner occupiers and love investors.

B1K3R

I wont really have any pay slips as I will only invoice foreign company through contracting. We will surely rent for a year or so before we think of buying.

Good idea, will fish around. I have an account with NAB (not sure which are the banks with better rates rather than the big 4).

Thanks!

Beoz

Plenty of websites around providing comparisons.

From trying to do the reverse (buying in the UK from Oz) the sticking point was residency. They were willing to throw all sorts of money at me providing I was resident in the UK. This was so they could get to me if things went pear shaped.

Without being resident they wanted a 50% deposit to minimise risk, and this was only through obscure lenders. The big banks didn't want to know without UK residence.

It might take a bit of shopping around but your residence seems to be the key.

LexiJ

Hi, just picked up on your post from last year. Might I ask which part of Queensland you're in? We're in the process of looking for a house to buy and are after recommendations for a law firm to handle the legals. Many thanks in anticipation.