Meg27

Okay this is a very broad question, but how easy is it to get a mortgage in Oz? Do you have to have a permenant residents visa? Also I have heard/read in the past that interest rates are very high, is this still the case, and does this make repayments very high?

Can anyone point me the direction of a website that can help me work out how much we may be able to borrow in Aus? Currently our mortgage is self cert because we run our own business, but I have no idea if you can still get self cert in the UK let alone in Aus?

Also what do they do about credit checking? As when you arrive in aus don't you basically have a blank credit record? How does that work - how can they lend to you if they don't know your credit history?

Okay I am really bumbling on, can anyone give me an example of how it worked for them? Or point me the direction of some info that might help? I have tried a search in the forum but it didn't turn up much...

Thanks,

Meg

ponyrama

Most banks have migrant advisors who can deal with all your banking needs as soon as you arrive. Your credit history doesnt mean anything here - you have to start again but it doesnt work the same as other places.

I got a credit card and was offered a mortgage within 2 days of arriving as they were satisfied that I had a permanent job etc.

You will find mortgage calculators on most real estate websites - google realestate or domain - and yes interest rates here are higher which means payments are higher but they have come down a lot due to economic climate. Next 12 months is good time to buy I reckon!

asprilla

Hi Meg, have a look at www.yourmortgage.com.au and also do a search for "mortgage" or "homeloan" on the forum.

I'm not sure of the answers to some of your questions, but there is no "credit history" here, as far as I am aware. The banks will lend to you based on your current ability to repay.

Meg27

thanks so much guys, its good to get a relatively positive reply!

However I have just done a few mortgage calculators and the results are so confusing, they vary so much! One told me I could only borrow $190000 which made me nearly cry, and then another told me I could borrow up to $790000.. but of course I needed a 20% deposit on that one...

Oh lord, this is all scary stuff at the moment! My flat is almost in negative equity here anyway...

We shall have to rent first... but we have a dog....

Syedney

Hey Meg,

If any consolation, I did a lot of searched on renting places that allowed pets, as we have a cat who we adore and love (specially my daughter), and the trend is changing. We are seeing more and more places that accept pets.

I spoke to an agent about this and it seems originally, the type of tenants here in Sydney used to those who had no kids and no pets. So that's how most agents work.
Since the influx of migrants, specially Brits who are seen more as pet lovers, and Brits with families, the agents here are shifting their thinking...

Slow process...But keep your fingers crossed.

Have even seen ads where the words "pet friendly" was in bold

Maybe by next year, we'll make an honest animal lovers out of the locals yet...

msn81

Hi Guys,

I'm also looking into mortgages in Australia and trying to calculate how much my wife and I can borrow. When I have been looking at the calculators I'm confused by the terminology - 'Planned monthly repayment' - does this mean they will lend according to how much you can afford - do they even consider the property you are buying?

I guess what I am trying to ask - for example, can I borrow $500K (assuming I can afford the repayments) even if the property I intend to buy is only $300K?

Thanks for the advice or information if anyone has knowledge / experience in this?
Cheers
Mark

spottydog

Banks will generally provide initial approval based on your income before you find a property so the figures you find on the web are based on income alone.

Each bank generally has a maximum LVR which is the maximum they will lend based on the value of the property. I think Westpac is the highest on around 95% with many others now only willing to lend up to 90% of the property value. Lenders also have an LMI level, when when you go over you need to pay insurance for the lender if you default. Most banks have this level set at 80% although Westpac always used to be 85%.

Therefore if the bank says they will lend you $500k with up to 80% LVR you will only be able to borrow the full $500k if you buy a property over $625k value and you will need to provide from your own non lent source the $125k plus purchase costs. Buying a property valued at $300k would mean the bank would only allow a $240k mortgage.

Most banks here are also now requiring genuine proof of saving for 3 months before lending although if you have just arrived from the UK and deposited a load of money in the bank from the UK this shouldn't make a difference.

Also be aware that any credit card limits (not balances) are taken into account when the bank decides how much they will lend so if you have a high credit card limit it may be worth dropping it before applying for the mortgage (there is nothing stopping you increasing it again if the credit card provider will allow it as soon as the mortgage is going).

ozhappy981

Just to add: From the banks' perspective, the genuine savings and the deposit exclude the First Home Owner's Grant.

In other words: Say you need a deposit of $40,000 and have savings of $20,000 and expect a FHOG of $21,000, the bank will only count the $20,000 as your savings/deposit and therefore won't give you the mortgage.

Cheetah7

We were allowed to use our FHOG to count towards our deposit - we went through a broker.

Westpac said we couldnt do it, so we went with ANZ.

msn81

Thanks for this information spottydog, really useful.

But is there any other way I could borrow more than I need for the property, if I paid the deposit? I know this sounds a bit silly, but say I'm looking to borrow more than the property price (if I wanted to spend a bit extra on building extensions / property repairs).
Take the example above, I'm pre approved for $500k, see a property for $300k and can cough up the $60k deposit, would any bank lend a further $100-200k for 'home improvements' - based on that I could afford the repayments from my income? As said, this may sound a bit silly, as in-affect the bank would be lending more than the 80% LVR.

Does anyone have any similar experiences?
Cheers
Mark

ozhappy981

If you want to build an extension and borrow for that, the same process applies: You get the plans drawn up, submit them to the bank and they will lend you x% of the value of the extension (based on their LVR policy).

No bank will give you a secured loan that exceeds the value of the property.

But you can of course apply for an unsecured loan on top of your mortgage (if you earn enough to make the repayments). But as it's an unsecured loan it will be for a much smaller amount.

Tooterelli

Ooooo an EAs dream. They are going to love you when you get your hands on the dosh. Go on, fill yer boots. Never been a better time to buy <sigh>.

msn81

Yeah - I see your point! I'll stop dreaming and trying to be sneaky! I was more thinking about investing the surplus with my hedge fund manager who makes me around 45% profits P/A. The monthly investment returns from the surplus borrowed would easily cover my total mortgage repayments!

Thanks all for your information on this!