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  • How to get a home loan on an Australian Visa 457

    Posted on March 26, 2011 by admin

    There are many people on a Temporary Resident Visa 457 that wish to buy a home in Australia. Many go on to apply for their permanent residency to make Australia their home.

    In this short video I will show you what the requirements are for a temporary resident in relation to the Foreign Investment Review Board. How much money you need to buy your home, and how much financial institutions are willing to lend you.

    I hope you enjoyed this video. Please share it with your friends and leave a comment below.

    Here is the transcript:

    Australian temporary work visa 457 and buying a home with a home loan:

    Hello this is Andrew with Australian Expat Loans and thanks for joining me in this video on moving to Australia and buying a home with a 457 work visa. I’d like to keep this video relatively short but I’d just like to be able to point out and share with you some of the common questions that I get asked about buying a home in Australia as a temporary resident and how much it will cost and so forth.

    In terms of how much you will need to buy a property, it is generally accepted that if you are buying a home in Australia that as a temporary resident on a 457 temporary resident visa, or some of the other classes that are accepted, you will require around a 20% deposit. So I just thought

    I’d use an example just to make it easy; -

    If you’re buying a home for $500,000 in Australia as an established home, you need about 20% deposit, which is around $100,000 and you should probably calculate another 5% so, in this example, another $25,000, to cover stamp duty, and legal’s, lender costs etc. So to make it very easy for yourself, if you’re looking at any type of property, simply add 25% of the purchase price and that’s what you’ll require. So again in this example, $500,000 purchase price, 25% is $125,000 that will be sufficient to have a deposit and also cover your closing costs. That would mean that a lender in Australia will advance you around $400,000 as a home loan.

    In terms of the procedure as a non-resident / temporary resident, please be aware that there is only going to be a select number of major or leading lenders that will approve your mortgage for you. Every lender in Australia has got different criteria for resident and non-resident / foreign investor, but if you search around you will find lenders that will fund you the 80% on the same terms as a resident so you won’t be disadvantaged and you will get the same type of rate and fees etc and conditions as an Australian would living here. You just need to be able to do the research and find the one that will accept your financial situation, and also being on a 457 temporary resident work Visa. If you’re not sure, you know, try to get in touch with a mortgage broker or you’ll probably just have to be able to ring around all the different lenders to find someone that will actually lend you the money. I’ve also got here, to do your numbers in terms of funds available, purchase price, how much you can afford. Again, you need to be able to make sure and understand that every different lender has got their own policies, guidelines, criteria, so although you may speak with one lender that will not provide you with the money that you’re seeking, another lender may. So again, you need to be able to understand and know which lender will firstly provide you with the funds, but also, based on your income and expenses, will give you the amount that you’re seeking. Again, if you’re not sure, speak to a professional in the field that will guide you, there are plenty of mortgage brokers around. Like myself, there are a few in this country that specialize in temporary residents, or non-residents so seek them out and they will be able to guide you into the right direction.

    The other thing that’s obviously really important to be aware of that we in Australia have a government agency, which is a Foreign Investment Review Board, also commonly referred to as FIRB. So if you are a person that is a temporary Australian here on a 457 Visa, there are a few things you should be aware of. First of all, you can buy established or new property, but it must be your principal place of residency, so it must be bought as your home. You must sell the property when you leave Australia unless of course you’re applying to be a permanent resident then you don’t need to. You cannot buy property that is established if you’re not going to live in it. It must be for your home if it’s an established property. Also be aware that if you’re applying to the Foreign Investment Review Board, it is not an application that is based on your personal circumstances, but it’s based on the property you’re buying. So, I’ve just put in here that in the Contract of Sale, you need to have included, that this contract is subject to Foreign Investment approval. If such approval is not obtained within 40 days then this contract is terminated and all monies deposit will be refunded. So the procedure here is that, if you, as a temporary resident, you can apply and get your finance approved. If you’re then looking around and you find a property that you’d like to buy, you then negotiate with the real estate agent. Once you have an offer accepted, then you need to have that clause stated within the Contract of Sale, and you then need to make an application to the Foreign Investment Review Board. Now, it’s very simple, this part first, simply go online and go to www.firb.gov.au, and you’ll see their website. You simply click on the real estate section, as such, from there you’ve got the residential real estate, it’s also got the How to Apply tab, you can get there either way. But it’s good to be able to read all these things so you get a good understanding of what’s required. If you’re buying an established home, go into Second-hand, and How to Apply, simply click here, and as I said it’s the same way of getting here. You’ll see here that you can either apply via email online, fax or you can post and, just going back to the other form. It’s a very simple form, its only 3 pages long, and I’ll just scroll down to give you some ideas; personal information, property details and declaration. You simply submit that through to the foreign investment review board, and the application’s based on the property. Once you obtain approval, that goes to the lender as well and you’ll then be able to purchase the property. So it’s not a difficult process, it’s just knowing the steps that you need to go through.

    The next step? Well, you can do everything yourself, as I’ve said in this video, you can call around all the leading lenders and find out who will accept your financial situation and provide you with the loan and also the best deal and go through FIRB and go through the whole procedure. Or you can engage a mortgage professional, as I said, there are lots in Australia. There are only a few though, that actually specialize in non-residents, like our company AustralianExpatLoans.com.au. So feel free to give us a call, or contact us online, we’re here to help. If you’re seeking further information, also check out our free report on how to structure your finances correctly, especially as a non-resident person. There’s lots of great information out there on how to make some savings. Hope you enjoyed this video, thanks for watching, and I’ll see you inside our next video.

    To your Australian investing success,
    Andrew Krauksts

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