Deon

Hi all

We have been in Aus for a year now and are looking to get on the property
Ladder. We have a small flat in London, which we would like to keep as an investment. Selling it at this stage in order to get a deposit is not viable as the Aus v UK rate is so dire at the moment!!

My question is whether anybody has had any luck with the UK banks/ brokers on drawing equity on a UK property to fund a deposit for an Aus property?

Thnks
Deon

RedDragon2008

You answered your own question. NO

Craig Vaughan

HI Deon,
We specialise in helping migrants with financing in Australia given differences in the system here and complexity around PR or Temporary visas and the banks understanding of these.

We come across this question all the time and the answer is, yes you can. Naturally though you will still suffer the exchange rate as you phyically need to cash the equity out and bring the funds to Australia to use as a deposit here. That is, an Australian bank will not take security over an overseas property (given they cant sell it easily if they needed to get their money back).

Whilst you can use a company like ozforex to do this and perhaps save a bit on using a regular bank, the rates are still pretty horrendous.

So it is possible however, as selling is not an option to you due to exchange rates, then i would think doing the above would not be an option either.

All the Best. CV

RedDragon2008

And you recommend advising of the UK mortgage commitments to Australian Banks?
And adding serviceability?

Craig Vaughan

HI Reddragon,
Perhaps i misunderstand the question, so please correct me. But to not disclose the liability on any application form to any bank or lender would be fraud on the lender. Any application requires a declaration that the contents of such are true and complete record of your assets and liabilities (most importantly liabilities and commitments).

Some may take the view that if you are not disclosing the offsetting asset nor the offsetting rental income from that overseas property, then there is no requirement to disclose the loan debt and repayments as well. But this is not correct and would not hold water should the lender discover that you had debts you had not disclosed in your original application (in a situation where an issue had arisen around affordability etc).

NB. I have heard of others doing this (including the odd bank manager) - so im not in any way denying that it happens.

As for servicing, this is rarely an issue given that the rental incomes in the UK generally exceed the required payments on the mortgage. That has certainly been my experience working with my UK clients.

If serviceability is not there with the overseas debt taken into consideration, then it would be fair to say that the client may not be able to afford the repayments.

Overall, all income and commitments should be included to confirm affordability and servicing. Its in no ones interest to see someone into a home loan they cannot afford. And in my experience, honesty is always the best policy anyway as there are always way to get around these issues without misleading anyone.

Again, I fear that I have stated the obvious here and therefore question whether i have misunderstood your comment.

Cheers

RedDragon2008

Good answer, and it was exactly what I was probing for. thank you Craig

spottydog

From what I've read on here it can be very difficult to find a UK bank that will extend the mortgage to a non-resident, non-UK employed, expat (the Aussie bit shouldn't be difficult if you are PR and working). I don't know if CV's company can deal with arranging UK loans as wellas Aussie ones.

Bermudashorts

How would this solve your dire FX issue? If you got any UK bank to remortgage the flat, your funds are still in GBP and would still need exchanging to AUD.

Craig Vaughan

Correct - we dont work with the UK banks except for Lloyds for foreign currency loans.

For this, we have in the past had success with a company called Total Finance UK who i believe do what we do but of course in reverse. Never had any issues getting equity out of overseas property providing the value is there of course etc.