More Australian than ever are living abroad and facing the challenges that this has on their finances and investment capabilities. Many may believe that migrating overseas would diminish their ability to start or continue their property investment journey but contrary to this belief, there are still many means for expat investors to obtain finance to fund their property investments. Lenders can often be slow to adapt to the times but they are gradually beginning to recognise the growing portion of the Australian investor market that are choosing to reside and work overseas and we have being seeing a shift in bank policy to cater for this group of individuals.
A shift in bank policy can be seen by the major banks and the smaller lenders alike representing a wider shift across the entire lending industry. As with many of the shifts and trends in bank policy, this one has been led by CommBank with them offering some of the most flexible and progressive policy positions amongst the major banks. CommBank will accept leveraged purchases of up to 90% LVR (the same as non-expat borrowers) with no additional upfront risk premium. The interest rate charged also does not differ from a non-expat loan meaning that an expat and non-expat have access to the same loan product and terms despite the difference in risk profiles.
Lenders are further shifting their policy to become more flexible with the type of income earned by expats. They are expanding their acceptable currency lists to include more currencies such as those of the Gulf States to reflect the shift in Australian migration. Overseas jobs with a variable remuneration component such as commissions or bonus’s are now more widely accepted amongst lenders allowing overseas borrowers to have these sources of income considered in their servicing assessment as it would be for local borrowers. There are even some lenders that will provide finance for self-employed expats with businesses setup and operating overseas.
The importance of understanding the particulars in bank policy is essential to maximising your property portfolio growth and investment returns. Knowing which lenders will assess income capacity off of gross income and which will assess off of net income will impact borrowing capacity with that respective lender depending on the local tax laws of the country which the borrower is residing. Having a broker partner and financial planner that specialise in expat property investment will enable you to maximise your investment capabilities while allowing you the freedom to pursue overseas opportunities. If you or anyone you know are earning income outside of Australia and feel as though this is restricting your ability to invest in property then reach out today!