Want to buy Australian real estate or get better mortgage rates for your property there? Securing home loans or refinancing existing properties can be difficult when you’re not in the country. TIM RAES, the Brisbane-born founder and managing director of Aussie Expat Home Loans, provides valuable advice and tips for overseas borrowers looking to get the best terms and mortgage rates in Australia. With offices in Singapore, Hong Kong and Melbourne, the company is uniquely positioned to make property financing accessible for Australians living overseas.
What led to you setting up Aussie Expat Home Loans?
I was posted to Singapore in 2015 following many years working in the banking sector in Australia. However, when Australian banks left Asia in 2017, it significantly reduced the borrowing options for Australians seeking property loans from offshore. I saw many Aussie expats struggle to get finance. So I founded my own brokerage in 2018.
That was six years ago and we have now grown to a team of 12, opened in Hong Kong and Melbourne and have been able to help hundreds of expats purchase a new Australian real estate, or refinance their existing property loans and get better mortgage rates in Australia.
What’s the first step when it comes to buying a property in Australia?
“Have you got your financing sorted?” This is the first question any agent asks before you even start looking or make an offer on a property. Knowing your borrowing capacity is crucial when making offers, so securing pre-approvals is one of our key services. This allows us to move quickly when clients do find something.
We’ve heard that securing financing can be a complex process for expats. Tell us about this.
Many of our clients come to us when they’ve already been turned away from lenders. Overseas income is often heavily penalised when determining capacity to borrow, and options for expats are much more limited. This can sometimes come as a surprise, but we’ve got great relationships with our lender partners so we know exactly who to go to to find solutions.
Are there any other challenges that non-residents typically face?
The income assessment process can be brutal for expats, as lenders typically apply Australian tax rates to overseas income without considering the lower tax regimes in places like Singapore, Hong Kong or Dubai. Needless to say, this doesn’t give an accurate reflection of one’s real income. Of course, there are lenders who are more expat-friendly, but it can be difficult to know who to turn to.
The deposit requirement can also be much higher for non-residents, with expats typically needing a minimum of a 20 to 30 percent deposit to secure a property. Having this cash upfront can be a hurdle for some. However, we have access to lenders who can offer better loans to individuals who haven’t qualified previously due to stringent loan-to-value ratios (LVR).
Beyond the financial side, expats also need to consider the logistics of handling red-tape from abroad. As a white-glove mortgage broking service, we meet clients face to face, simplifying identity checks and paperwork and eliminating the need to wait in line to certify documents at the Australian High Commissions.
This year, you also launched Urbane Finance brokerage in Melbourne. How does this new venture help returning Aussies find property back home?
This is a natural extension of our business, opening up more options and deals for our clients, and supporting them throughout their entire expat and repatriation journey. It’s a very different space compared to the expat lending market. Our broker Paul Truong is well-connected in the local market and helps to streamline the process for clients when they return home.
Is it worth refinancing an existing home loan?
Heard of the ‘lazy tax’? Australian banks typically increase the interest rate the longer the loan goes on, so unless you’re checking your loan every year, it’s very easy to start paying higher than the market rate. We help clients with existing home loans check their rates, negotiate with their existing lender or look at other options for getting better mortgage rates in Australia.
What are three tips for securing a home loan while abroad?
- Plan ahead and work out your financing options. Speak to an advisor to find out what you can borrow so you’re ready to offer once you find a property.
- Get help with the search. Looking for property while offshore can be challenging. If you can’t enlist the help of family or friends on the ground, we can connect you with various buyer’s agents who will handle the legwork for you.
- Watch that credit card limit. Locally issued credit cards and personal loans can have a big impact on your borrowing capacity. Australian banks look at the available credit limit, rather than the balance. It’s therefore best to stick to modest credit card limits if you’re considering applying for a home loan.
Any insights into the Australian property market to share with us?
The Australian property market can be highly competitive with hotspots where buyers need to move quickly. The best tip is to have your financing sorted in advance; it can make all the difference. Being ready to move quickly can help you secure the perfect property.
Client testimonials:
“Cannot express enough how grateful I am to Tim and his team for helping refinance my Australian property. They truly understand the challenges of expats borrowing to buy in Australia using overseas income. I could not have navigated the process without them.” – Joe Pullos
“Absolute super stars! Nailed everything and negotiated us a great deal for our first expat purchase. Couldn’t recommend more highly.” – Rupert Baker
Cambridge House, Taikoo Place, 979 King’s Road, Quarry Bay
3428 2454 | aexphl.com
