WILL THE TYPE OF VISA I HAVE RESTRICT BORROWING OR STOP ME BORROWING AT ALL ?
Restricted lending to certain visa types
Up until a year ago, almost all temporary visa types could <borrow up to 95% of the property value> and get the same interest rates as an Australian citizen.
The most preferred visa type for lenders was the spousal or partner visas, otherwise known as Subclass 309/100 and 820/801.
As long as you were married to an Australian citizen and you were both co-borrowers, the bank saw you as a permanent resident (PR).
The was followed closely by New Zealanders living in Australia.
Another favourite for banks was the 'Temporary Business (Long Stay) - Standard Business Sponsorship' or Subclass 457.
The reason was that 457 visa holders were skilled workers and were very likely to become Australian permanent residents.
Although migrants on partner visas and NZ citizens are generally still treated like Australian citizens, some lenders have pulled the pin on lending to 457 visa holders and other visa types altogether.
The only exception to this is if you have at least one year remaining on your visa, you have most of your savings in Australia and you're in a stable job.
How much can I borrow now?
Loan to Value Ratios (LVRs) or borrowing power for temp residents has been reduced to around 60-70% of the property value.
So for a $500,000 home in Sydney, you may have only needed a $25,000 deposit or 5% of the property value.
You now need as much as $150,000 to $200,000!
This doesn't even include the other costs associated with buying a property including mortgage application fees, conveyancing and legal costs, Lenders Mortgage Insurance (LMI) and stamp duty.
Luckily, some lenders will allow you to borrow up to 80-90% of the property value if you're in a good financial position and you have a stable job.
Currently, the only way to borrow up to 95% of the property value or more is if you're on a spousal visa, you're an NZ citizen living in Australia or if you wait to become a permanent resident.
Be careful if you're on a student visa
It can be particularly tough getting approved for a mortgage on an international student visa.
If you're not currently working, the solution is to buy a property jointly in your parents' name.
Assuming your parents are foreign citizens, this would be assessed as an overseas property investor loan.
That means the bank will restrict their borrowing power to 70% of the property value.
However, if you're working and earning a sufficient income in a stable job, you may be able to borrow up to 80% of the property value on your own.
How to maximise your borrowing power
The best way to improve your borrowing power is to save up a good deposit.
Secondly, consider speaking to a mortgage broker that specialises in temporary residents so they can help you navigate the minefield of complex lending policies.
Building a strong case with a lender with more flexible lending policies is the key to borrowing more.
It's a much better option than going in blind and getting declined.
FORIEGN BUYERS GENERALLY
Remember most categories of Forign Buyers of land require FIRB approval in Australia - Contact Alex tees 0409813622 firstname.lastname@example.org for further advices.