Mortgages
The Australia System
Now, the Australians don't really call them mortgages, but call them more often
as Home Loans. In essence the systems are much the same. Single
people can borrow up to 3 times their annual salary, whilst couples can borrow up
to 4.5 times their combined annual salary and most banks will bend these limits
if they feel happy that you can support the repayments. However, there
are catches and potential brick walls that will limit your borrowing potential!!!
- You can only purchase a property in Australia if you are an Australian or a resident. If
your visa does not say words like allowed to stay in Australia indefinately,
then you are more than likely NOT allowed to purchase a house.
- You can't simply pop to the bank on your first day in Australia and borrow a few
hundred thousand dollars...unfortunately!
- You will need to have a job offer at the least before you can even start to talk
about a home loan
- If you have already started a job and you are on probation this will limit your
options. This is a common problem, but a quiet chat to your new employer
and a letter from them explaining that you are no longer on probabtion is all that
the bank would need to be satisfied that you are in full employment
- If you are here to be self employed in your new business, you will be severly limited. Banks
will usually require you to have an ABN for at least 2 years along with the associated
accounting. If you don't have this you can get a low-doc home loan, but there are restrictions
such as the ability to only borrow 60% of the property value and a poorer interest
rate
Another thing that may take you back a few years, is that banks in Australia charge
you for using their services. As such a home loan will cost you each
month to have, but it is usually quite a low cost at around $10. However,
a lot of the banks offer packages with the loan that result in the account fee being
waived
There are many banks out there offering home loans so the one thing that you do
have is choice.
Budgetting
This is a new country to you and you WILL need to go through your budget with a
fine tooth comb to make sure that you have enough money to buy the property. The
bank will help you in this regard, but it is an essential part of the process. Make
sure you understand all of the fees involved and when things need to be paid by. Your
conveyancer will detail all of their charges, but will not list other things such
as what rates and water you will have to pay upfront. Water and rates
are paid periodically and so you have to reimburse the seller for what they have
already paid
Offset Mortgages
The idea of offsetting your mortgage against your current and/or savings accounts
originated from Australia. If you end up have a surplus amount of cash
at the end of each month then this could be a good option for you to pay off your
mortgage early.
First Home Owner Grant
If you hold a permanent residency visa and this is your firs home purchase in Australia,
you will be eligable for a grant to help offset the cost of buying a home. The
amount and conditions of the grant will vary from state to state but for example
in Queensland the grant is $7,000. NOTE - Currently due to the Global
Financial Crisis, the Queensland Government have upped the First Home Owners Grant
to a massive $21,000. The duration of the grant has recently been extended
and if the GFC continues, then the high value of the grant may also continue
The Queensland Government
have a section on their website, that is full of
information on the grant and the process of obtaining the grant. Usually
what you need to do is instruct the bank that you are getting your mortgage through,
and they will handle the rest for you. If in doubt, ask! The
grant is usually handled for you by the bank that you are getting the mortgage with
and is applied to your account at the end of the buying process automatically