Sydney-born JASON LAM has lived in Hong Kong for five years as a principal and senior mortgage advisor. If you’re an Aussie expat with aspirations of buying property back home, here’s how he can help you with your Australian mortgage needs.
What kind of services do you provide?
My approach to mortgage brokering is influenced by my time in private banking; this is a key difference, as the experience you get with the average mortgage broker is normally quite transactional. I’m able to discuss a wide range of financial concepts and utilise my trusted network of experts, who are selected for their experience in both Hong Kong and Australian matters, to ensure all the elements of a client’s financial journey is considered and working together.
Part of my discussions with you as a client will challenge your notion of achieving financial freedom. Why are you really buying property? What are your future plans and goals, and how will property play a part? So it’s a very different service experience compared to going into a bank and applying for a loan.
What kind of lenders do you work with?
I work with over 40 different lenders, though only a handful will accept applications from those living and working in Hong Kong. The situation has improved, though it’s also constantly changing depending on the lenders’ risk appetite for foreign income applicants. Every lender treats every individual and household differently based on their lending policy, which, again, is constantly changing. It’s this reason that I often hear of the struggle individuals face in trying to source an Australian mortgage on their own. It’s not uncommon that we make two or three applications due to changes in policy just from the time we start the process to the time the lender assesses. My goal is to not only help clients choose the right lender for them, but also to present their applications in a way that will reduce this complexity and achieve a positive result.
What do I need to be applicable for a loan for an Australian mortgage? Am I still eligible if I’m unemployed?
Australian citizens are best off; Australian PRs and non-Australians have fewer options and terms may not be as favourable. Self-employed persons in Hong Kong will find borrowing especially challenging due to current geo-political concerns and the uncertainty of COVID-19. Primarily, banks look at two things:
#1 Income minus expenses.
While this is a simple concept, there is complexity in the definitions. For example, what is accepted as income by the lender? (Are bonuses, overtime, dividend payments or rental income from overseas properties accepted?) What taxation is applied? (Australian tax of 30 to 50 percent, or Hong Kong tax of a maximum of 15 percent?). And then, what expenses are to be included in the calculation? Whatever the surplus is will determine how much someone can borrow.
#2 Exit strategy.
How is the applicant going to repay the loan? We look at employment and job security, retirement goals, and savings – and what backup plans are in place if any of those things are in doubt. It’s important to note that lenders don’t like the option of selling the primary residence to pay off the loan, even if it’s just downsizing.
What costs are involved?
All my clients receive a free initial consultation so I can get a preliminary understanding of the situation and assess the benefit of proceeding to the next step. Only if there is a potential solution will I charge a flat fee to proceed from there. From a product perspective, fees that lenders charge can vary. Borrowers may be charged an application fee, administration fee or valuation fee depending on the lender, but it’s usually no more than a few thousand Australian dollars. I’ll always clearly disclose all fees to clients for full transparency.
This article first appeared in the January 2020 edition of Expat Living. You can purchase the latest issue or subscribe, so you never miss a copy!