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Category: Tips

How to choose a great mortgage broker?

Posted on by Nick

If you are trawling the internet to find a great mortgage broker then these seven tips are what you should be looking for;

  1. Minimum Five Years Broker Experience: Ensure your broker has substantial experience handling various scenarios and providing you with experienced advice earned over years, not months. Newer brokers will be desperate to originate your loan application at all costs and will often lack the experience to prepare a high-quality mortgage application submission that may result in your loan taking longer to be approved or even declined.
  2. Strong Online Google Reviews: Check for positive reviews and testimonials from previous clients to gauge their reputation and service quality. Be wary of lots of short reviews that appear in a condensed period, as they are less likely to be legitimate. Instead, look for someone like AXTON Finance, who has hundreds of excellent reviews over many years. A simple independent search of the company name plus the word ‘reviews’ will help you determine if they pass your sense check.
  3. Fully Licensed: Verify that your broker holds all necessary licenses and certifications required by regulatory authorities. As a minimum your licensed mortgage broker should have a Certificate IV in mortgage lending but preferably a Diploma in Mortgage and Finance Broking. Licensed mortgage brokers should be members of the MFAA (Mortgage Finance Association of Australia) and/or the FBAA (Finance Brokers Association of Australia). You can check their credit license status via the government’s ASIC (Australian Investment & Securities Commission) website here. Mortgage Brokers are also required to be members of the government’s Australian Financial Complaints Authority (AFCA) should there ever be the need to lodge a complaint that cannot be resolved.
  4. Comprehensive Product Knowledge: Look for a broker who is well-versed in various mortgage products and scenarios and can offer you tailored options that fit your needs. Not all mortgage brokers are experienced enough to handle your application if you have any unique or complex variables about your situation especially if you are self-employed, have complex income streams, are an expat and/or a high net worth individual.
  5. Transparent Fee Structure: Ensure that your broker provides clear and transparent information about their fees and commissions to avoid any hidden surprises. All licensed mortgage brokers are required by law to disclose their remuneration earned on all regulated loan applications lodged to help comply with best interest duties that champion your interests first.
  6. Excellent Communication Skills: A good mortgage broker should maintain open lines of communication, keeping you informed throughout the process and promptly addressing any concerns. Ideally, your trusted mortgage broker will be updating you through efficient systems of communication instead of your chasing them up seeking an update.
    Proactive and Personalized Service: Choose a broker who takes the time to understand your financial situation, goals, concerns and preferences, offering proactive and customized advice rather than a one-size-fits-all approach.

This checklist will help you find a mortgage broker who can provide valuable guidance and support, ensuring a smoother and more beneficial mortgage experience.

As shameless self-promotion, we are confident we will pass all seven points summarised above, so why not save yourself the time and risk and call us for an obligation-free chat today?

Should You Be Loyal To Your Bank?

Posted on by Clinton Waters

When it comes to your money, especially a significant commitment like a mortgage, loyalty to your bank might seem like a good idea. Many homeowners tend to stick with their original lender out of familiarity, a sense of loyalty or sometimes because they think it’s too hard to change. However, the mortgage landscape is constantly evolving, regardless if interest rates are increasing, decreasing or going sideways and sticking with your bank probably isn’t always in your best interest – not that they will tell you this…

Is maintaining allegiance to your bank when you have a mortgage crucial? Or does prudently exploring better deals that align with your interests make more financial sense?

The myth of loyalty

The notion of loyalty to your bank is deeply ingrained in many individuals. Often, people associate familiarity and a long-standing relationship with their bank as a form of security. However, while loyalty may have its merits in certain aspects of life, it might not always pay dividends in the realm of your home loan and your hard-earned dollars.

New to bank = a better deal

You would think that being loyal means you should get a better rate or a discount like you do with your insurance company, but this is often not the case. While you might get a slight improvement by haggling with your old bank the overall system is hugely hungry for ‘book growth’, meaning banks and lenders will usually trip over themselves to get new customers in the door and rely on their ‘loyal’ customers to stay put at higher rates – it’s just the way the system often works. Even when you get your current bank to tweak your rate, there will come the point when the ‘computer says no’ because the return on their loan isn’t worth it anymore for a host of technical reasons – you might think you got a better deal, but did you?

You don’t know what you don’t know

Mortgage rates fluctuate regularly. What might have been a competitive rate when you initially secured your mortgage a few years back could now pale in comparison to newer, more favourable deals available in the market. By limiting yourself to one lender, you could potentially miss out on a better interest rate or more favourable terms offered by other banks and lenders.

Why reviewing your mortgage regularly is crucial

One of the keys to ensuring you’re not missing out on a better deal is to review your mortgage at least every one to two years. This proactive approach allows you to assess if your current loan still aligns with your financial goals and if there are better options available. You are probably unsurprised that banks don’t prioritise this process, and they are not obliged to always act in your best interest – licensed mortgage brokers are, however! This means you may be unaware of a better rate available from your current lender or someone else in the market.

This is where the expert mortgage brokers at AXTON Finance can help save you a lot of time and money. AXTON Finance is committed to empowering homeowners by regularly reviewing their loans with automated repricing tools that needle your bank or lender to ensure you get the best rate for your scenario. After all, if we are not doing this on your behalf, we are certain you will and that you may leave us! One of our primary goals is to create a long-term relationship with you as your trusted mortgage broker. We do not treat you as a once-off transaction!

Our efficient digital systems ensure that your mortgage is reviewed at least annually, ensuring that you are getting the best possible rate and terms that suit your needs.

Why AXTON Finance are Melbourne’s leading Mortgage Brokers

Unlike dealing directly with banks and online lenders, AXTON Finance is dedicated to working in your best interest. Our team of experienced mortgage brokers navigates the complex mortgage market on your behalf, identifying tailored structures and negotiating to secure lower interest rates and favourable terms.

We provide you with personalised attention, ensuring that your financial goals are understood and catered to effectively.

We build relationships – not transactions

While bank loyalty may have been a thing when 20th-century bank managers had authority, it’s now essential to recognise that in modern home and investment loans, blind loyalty to your bank might only sometimes serve your best interests. Regularly reviewing your mortgage and exploring better deals is indeed a smart financial move but getting experienced advice from the leading mortgage brokers at AXTON Finance will help ensure your best interests and not the banks are being served!

We know that your mortgage is not just a set-and-forget transaction but an evolving instrument that adapts to your changing financial needs. Don’t wait for your bank to offer you the best deal; take control of your financial future today. Contact AXTON Finance, Melbourne’s trusted mortgage brokers, and experience our personalised service, efficient systems, and dedicated team, who can help you secure a better mortgage approval.

What Self Employed Borrowers Need To Know

Posted on by Clinton Waters

When it comes to applying for a low or alt doc home loan in Australia, it’s important to understand what lenders are looking for. While these types of loans can be a great option for those who don’t have completed self-employed tax returns or traditional income, the application process can be more rigorous than for a standard home loan. However, with the right preparation and understanding of what lenders are looking for, you can increase your chances of being approved.

Firstly, it’s important to understand what a low or alt doc home loan is. These types of loans are designed for borrowers who may not have the traditional income documentation required for a standard home loan, such as payslips or tax returns. They may be self-employed, have irregular income streams, or have a poor credit history. As a result, low doc loans typically require less documentation and have more flexible lending criteria than standard loans.

However, this flexibility does come with some additional requirements from the lender. Here are some of the key factors that Australian banks and lenders will consider when assessing your low or alt doc home loan application:

    1. Income and assets
      While low doc loans don’t require the same level of income documentation as standard loans, lenders will still want to see evidence of your income and assets. This can include bank statements, tax returns, profit and loss statements, and any other documentation that shows your financial situation. Lenders will also consider any assets you have, such as property, shares, or savings, as this can help demonstrate your ability to repay the loan.
    2. Credit history
      Your credit history will also be taken into account when applying for a low doc loan. Lenders will look at your credit report to assess your creditworthiness, including any missed or late payments, defaults, or bankruptcies. While a poor credit history won’t necessarily rule you out of a low doc loan, it may affect the interest rate you’re offered.
    3. Loan-to-value ratio (LVR)
      The loan-to-value ratio (LVR) is the amount you want to borrow compared to the value of the property you’re purchasing. For low doc loans, lenders will typically require a lower LVR than for standard loans, as this helps mitigate the risk of lending to borrowers with less traditional income documentation. Most lenders will require an LVR of no more than 80%, which means you’ll need a deposit of at least 20%.
    4. Loan purpose
      Lenders will also consider the purpose of your loan when assessing your application. While low doc loans can be used for a range of purposes, such as purchasing a home, refinancing an existing loan, or investing in property, lenders may have different lending criteria depending on the purpose of the loan. For example, if you’re using the loan to purchase an investment property, you may need to provide evidence of rental income or projected rental income to show that the property is a viable investment.
    5. Security
      Finally, lenders will consider the security you’re offering for the loan. For low doc loans, the property you’re purchasing or refinancing will typically be used as security for the loan. Lenders will assess the value of the property and consider the location, condition, and any other factors that may affect its value. This helps ensure that the property is sufficient security for the loan, and that the lender can recover their money if you default on the loan.

Overall, applying for a low or alt doc home loan in Australia can be a more complex process than for a standard payg employee. However, by understanding what lenders are looking for, and ensuring you have all the necessary documentation, have a quality submission prepared by your broker and have evidence to support your application, you can increase your chances of being approved.

Speak to us today about your scenario and we will gladly tailor a solution that meets your exact needs.

Which Professionals Do You Need When Buying A Property?

Posted on by Luke Rowland

Purchasing a property is one of the biggest financial decisions you will ever make, and at AXTON Finance we know the importance of having the right professionals by your side when embarking on your property journey.

There are several experts involved in the property buying journey, and each plays a vital role in ensuring that you make informed decisions and get the best result. These professionals will also be key to ensuring you receive the correct advice in the future.

Here are some of the important professionals to engage when purchasing a property:

  1. Mortgage Broker: One of the first experts you should engage when purchasing a property is a mortgage broker. An experienced mortgage broker will help you secure the best possible mortgage by understanding your needs and unique situation to then compare various lenders and interest rates. They will also help you determine your borrowing capacity and assess your eligibility for government grants or incentives. By working with a mortgage broker, you can avoid costly mistakes, save a lot of time and money in the process. As one of Melbourne’s best mortgage brokers you will be hard-pressed to get a better professional in your corner. Book an obligation free chat with us today here or call on 1300 706 540.
  2. Solicitor/Conveyancer: A solicitor or conveyancer is another crucial professional you need to engage when purchasing a property. These experts help you navigate through the legalities of the property-buying process. They can help you understand the terms of the sale contract, identify any legal issues, and ensure that you have a clear title to the property. They can also advise you on stamp duty, taxes, and other settlement legal obligations.
  3. Buyers Advocate: Buyers advocates are professionals who work exclusively for the buyer NOT the vendor like real estate agents do. They help you find the right property based on your brief, negotiate the best price, and manage the entire property-buying process on your behalf. They have access to off-market properties, and they can help you avoid common property-buying mistakes. They can also provide you with independent advice on the property, its potential, and its value.
  4. Accountant: An accountant is another important professional to engage when purchasing a property. They can help you understand the financial implications of buying a property, such as the tax obligations, ownership options, negative gearing benefits, depreciation, and expenses. They can also help you set up a structure to minimize your tax liability and advise you on any tax benefits or incentives available to you.
  5. Financial Planner: A financial planner can help you assess the financial implications of buying a property on your overall financial plan. They can help you understand how property investment fits into your overall financial goals and advise you on the best ways to finance it. They can also help you structure your finances, assess your cash flow, assess the adequacy of your insurance protections and plan for your financial future.

So to help maximize the likelihood of a successful property transaction it is essential to surround yourself with the right professionals to guide you through your property-buying journey. Each of these professionals brings a unique set of skills and expertise to the table, and working together with you over time will not only ensure that you get the best result on the initial purchase but the best advice moving forward as you grow your wealth in the years to come.

Is Your Cheap Fixed Rate Mortgage Expiring?

Posted on by Clinton Waters

The pandemic saw a torrent of ultra-low fixed interest rates set up for Australian homeowners and investors alike. However, many of these fixed loans are set to expire, and borrowers will face a sharp increase in their interest rates, which has been dubbed somewhat ominously by the Australian media as the “mortgage cliff.”

The expiry of these fixed rates over the coming months and years could cause significant financial stress for borrowers who are unprepared for the sudden increase in their mortgage payments. In some cases, monthly mortgage payments could double, putting a significant strain on an already elevated household budget.

Thankfully, there are some sound options available for those with fixed rates to mitigate the impact of the so-called cliff!

  1. One of the most effective solutions is to pick up the phone and call your current lender to needle them to improve your rate. It is a well-known fact in the banking industry that it is cheaper to keep a current borrower than to seek out a new one so you might be surprised by what they may be able to offer you. Once you have done this you can compare the market yourself or use the services of a mortgage broker to assist you in comparing like-for-like options.
  2. Failing a decent response from your current bank or lender, you can seek to refinance your home loan. This is best done by a professional mortgage broker, who will be experienced in comparing like-for-like products, policies and structures. Since interest rates started to rise in 2022 lenders have slowly increased the assessment criteria that may result in you being unable to refinance your current loan based on the revised stress-tested rates even though you are making repayments at a higher rate today! Further compounding this complexity is the fact that borrowers with higher LVR’s (Loan to Valuation Ratios) may have experienced a reduction in the value of their property which can make refinancing uneconomical. An experienced broker will help you clearly navigate the benefits and costs early on before you commit to any decision.
  3. Switch your loan to interest only and/or extend the term. This really should be a last resort option because while your monthly repayments may drop considerably, the true long-term cost can add tens of thousands of dollars to the total cost over the life of your mortgage. Extreme caution needs to be applied when looking at this option and getting a professional broker in your corner to model out the effects is highly advisable.

By working with an experienced mortgage broker, like the team at AXTON Finance, we can help you understand the terms of your current loan, including any hidden fees or penalties that could impact the refinancing process.  Will will have a high degree of confidence that your decision will be an informed one that one helps you avoid any costly mistakes.

The mortgage cliff is a looming challenge for borrowers with expiring ultra-cheap fixed home and investment loans. However, there are some simple solutions available, such as refinancing, that can help mitigate the impact of rising interest rates.

How To Get Approved When Refinancing Your Home Loan

Posted on by Clinton Waters

With the rapid increase in interest rates in Australia and many people coming off ultra low interest rates there has been a cause for concern for many people looking to refinance their mortgages. With the onset of higher interest rates, lenders are substantially more cautious and selective when it comes to approving mortgage applications. We are even seeing many examples where people cannot refinance to a better rate because various lenders are applying higher assessment hurdles to a loan they are already servicing which is locking people into their home loans. However this may not need to be the case, there are a few clever but very simple ways to increase your chances of getting your refinance mortgage application approved. Here are some tips to help you get started:

  1. Review your credit score

    A higher credit score can increase your chances of getting approved for a mortgage, even if interest rates have risen. Review your credit report and make sure there are no errors that could negatively impact your score. If you have a lower score, consider working to improve it before applying for a mortgage. Being late on loan repayments, making too many credit applications, moving address regularly or having numerous consumer debts can all negatively affect your credit score.

  2. Demonstrate a stable income

    Lenders want to see that you have a stable income that can support your mortgage payments. This is especially important if interest rates have risen since you first took out your mortgage. Provide documentation of your income, including pay stubs, tax returns, and bank statements. Bonus income can also be used in many circumstances but policies vary considerably from lender to lender – best to speak to us about your option first.

  3. Reduce your debts

    Lenders look at your debt-to-income ratio, which is the amount of debt you have compared to your income. If you have a high debt-to-income ratio, it could be a red flag to lenders. Consider reducing your credit card limits or paying off some debts before applying for a mortgage. Reducing your credit card limit by just a few thousand dollars can have a fairly substantial effect on your loan. As of the time of publishing, most lenders want to see your debt-to-income ratio less than six times.

  4. Shop around for lenders

    Different lenders have different requirements and criteria for mortgage approvals. Shop around and compare rates and terms from multiple lenders to find the best fit for your financial situation. Of course the best way to do this is through the professional services offered by the team of experienced mortgage brokers at AXTON Finance.

  5. Be prepared to provide additional documentation

    Currently, banks and lenders are requesting additional documentation or information during the application process. Be prepared to provide this information in a timely manner to keep the process moving forward which will reduce the time it takes to ‘yes’ and for you to enjoy your lower rate.

  6. Extend your loan term

    This one can make your borrowing capacity higher but can make your mortgage ultimately a lot more expensive. So while you may be able to get a loan term of 35 or 40 years this can be very costly if you are already 10 years into a 30 year mortgage – tread with caution on this one but an experienced mortgage broker will be able to model out the pros and cons for you.

In summary, getting your refinance mortgage application approved despite rising interest rates requires some simple planning and preparation. With these tips in mind, you can increase your chances of getting approved for the refinance of your home or investment loan and secure a better interest rate.

Get in touch with one of the experienced team at AXTON Finance today to refinance to a better rate.

Call us today on 1300 706 540 or book a quick obligation-free mortgage review online here.

How Does Bridging Finance Works?

Posted on by Clinton Waters

Bridging finance is a term often thrown around in client meetings but not many people really understand how this policy works. So lets start at the top and work our way down.

Imagine that you have seen your dream home come up for sale and you haven’t sold your current property yet or even considered selling it yet – then you might need bridging finance.

In its simplest definition, bridging finance is a type of loan that enables you to buy a property and settle it before you sell your current one. So you can buy before you sell!

Bridging finance enables you to fund the purchase price of a ‘to be purchased’ property, usually in its full entirety plus closing costs (ie stamp duty and legal costs) and allows you to keep your current property and sell it within a reasonably short time frame (less than six months ideally). The lender charges you interest on the bridging loan and adds it to the balance each month until you pay it down with the sale proceeds of your existing property (less any existing debts/costs).

Let’s look at a simple example. Say you own your current home worth $1.0m and you owe $500k to the bank already (a 50% LVR / Loan to Valuation Ratio), you haven’t sold it and you might not even have it on the market yet, and you want to buy an amazing new home that you have seen for $1.5m – you might need bridging finance.

The purchase price can be funded with a new loan of say $1.6m to say cover stamp duty. At peak, you will owe $500k (existing) plus the $1.6m so call it $2.1m owing. If you have any cash deposit you could use it to reduce the total loan size required.

This $2.1m loan does not usually need you to make monthly repayments on the bridging component (ie the $1.6m loan) but you do need to keep repayments up to date on your current home loan. Interest however does accrue daily on the bridging loan component and is added monthly to the balance. This can get pretty expensive if you are in a bridging position for too long.

Of course, the main pro of this structure is you might be able to buy a property before you sell and minimise the risk of having to move twice if you sell first and can’t find your next home before the settlement of your current home. Furthermore, lenders will give you a loan size (in the short term) much larger than what your income might otherwise support to hold both properties for a period of time.

So what are the cons – well to be honest there can be a few and this list is by no means totally exhaustive so lets go through them;

Market Risks

Without doubt, the biggest risk of using bridging finance is mainly around factoring in that you may not sell your current property in time or be forced into a situation that makes you accept a lower price than you might have otherwise been happy to accept. A falling market can be a risky place to be in a bridging finance position so being realistic in what you would sell for is an absolute must.

Costs

Like any mortgage interest is calculated daily and charged monthly. With a bridging loan is the same but a little different. You must keep repayments up to your existing loan balance (or a calculator whereby the lender works out what the approximate loan balance will be at the end of the bridging period). The bridging loan interest is still calculated daily (usually at a higher rate) and the interest is added to the loan balance each month and paid out with the sale proceeds at the end of the transaction.

Timing

Most lenders will want you to be in a bridging finance position for not more than six months and in some limited cases up to 12 months. But remember a bridging loan is usually a very large sum of money that you have borrowed and while you may not need to make monthly repayments the interest accruing could be adding up quite quickly.

The good news is that if you can negotiate a longer settlement on the property you have just purchased you might not need bridging finance for a very long time frame or at all. This is because bridging finance only kicks in from the settlement date of the purchase property. We can help inform you of what sort of solutions and purchase negotiations might work as an alternative to bridging finance that could help save you a lot of money and stress.

Market conditions

Bridging finance favour certain market conditions better than others. As a general rule, a declining property market could be risky if you are using bridging finance and you have purchased before you sell. If the sale of your property takes longer than you anticipated and you are unable to meet market conditions the sale price you might be able to secure as the weeks and months roll on could be accelerating down to your detriment. Conversely, in a rising market, the opposite can be true – you bought a nice new expensive home before prices take off and you are selling your old home in an environment that favours you as a vendor. There is a degree of luck to this so it might not be for the faint-hearted unless you go into a structure with your eyes completely open.

Deposit

So we have identified that bridging finance might be an option but you need a cash deposit to secure your new home on the auction day! This is often an overlooked consideration by many buyers – but doesn’t the bank just give it to you I hear you ask? Not quite – you need to have finance approved to release equity against your current property first to release the deposit required (if you don’t have sufficient cash) or utilise redraw or offset funds to pay the required deposit. Increasingly we are seeing vendors accepting deposits less than the standard ten per cent deposit with five per cent becoming more common especially to bring more bidders to an auction or to accommodate a buyer like yourself who may be interested in trading up to a new property using bridging finance.

There are also options outside of using a cash deposit that we can discuss with you like using a deposit bond (basically an insurance bond issued by a reputable insurance company), a bank guarantee (increasingly rare these days), as well as a few other options that we can discuss with you.

Servicing requirements

This is just mortgage jargon for ‘can you afford the loan’. Lenders have a myriad of metrics that they assess your capacity to meet repayments when interest rates rise. With bridging finance there are a few extra variables to consider which can stress your ability to ‘afford’ the end debt loan amount once you have sold your current property. These variables relate to lenders applying a discount of usually about 15% of the current valuation of your home to ensure that in a forced event you could actually sell and settle your property which would in this worst case result in a sale proceed being reduced and thus the ultimate loan you require increasing. Furthermore, the lender will add up to twelve months of interest on the bridging loan amount (in addition to the sale price discount) to ensure that the larger loan at the end of an extended period could be closed out and still be affordable. The lender of course will only charge you for interest that you used which is why it pays to minimise a bridging loan time frame. We can help you navigate the ins and outs of how lenders assess this risk and apply it to your personal scenario.

Complexity

Not all lenders in the Australian mortgage market are prepared to offer bridging finance and pretty much each lender who does has a different process and assessment policy on how they interpret your structure before they will approve you – lucky for you we are experts at navigating this on your behalf. Many lenders make it a requirement that you are an existing borrower of their institution before they are happy to extend a bridging finance product to you. Because the funding and legal documentation required to be in place for bridging finance is only usually for a short period of time (under six months usually and often just a few weeks) the interest rate charged on the bridging loan component is often not discounted and will likely be at a much higher amount than what your ‘end debt’ loan will be one you have sold your current home. While this might be fine to achieve the property purchase you want, the cost and stress of bridging finance could add up to be a very expensive solution without the right advice.

Please feel free to contact us on 1300 706 540 and ask for Clint or one of the team to help you out. We a sure you will love speaking to an experienced person and not a call centre!

Finance Tips For Aussie Expats

Posted on by Clinton Waters

So you are an Australian citizen or an Australian permanent resident (PR Visa holder) living and working overseas and looking at buying or refinancing a property back here in Australia?

We look after lots of time poor Aussies needing help with tailored expat and non resident lending needs from our panel of over 30 major banks and lenders.

The following key questions provides a high-level summary of the available policies generally applied by the major Australian banks and lenders who offer mortgages to Australian expats and non resident with permanent residency status.

What is the maximum LVR that an Australian Expat can get?

The Maximum loan to valuation (LVR) ratio is generally 70% or 80% of a property’s value (some lenders may allow higher up to 90 or even 95% but there are caveats to this which are usually higher rates and mortgage insurance being applied).

How much foreign income can I use?

Your overseas income is usually shaded by 20% for currency risk purposes before converting to Australian dollars ($AUD). The resultant figure is then hypothetically ‘taxed’ at Australian tax rates to determine what net income (after tax income is available to support your loan). This is applied because Australian lenders are generally not resourced to deal with understanding every countries different tax systems.

What if I earn tax-free income in the UAE? 

If you earn tax-free income in the United Arab Emirates (UAE) or similar tax jurisdictions – you may be in luck then. In many circumstances, we have a handful of lenders who will not apply hypothetical Australian tax rates to your expat tax free income in places like Dubai and Abu Dhabi. This will usually result in you being able to secure a larger loan size than what most Australian banks would otherwise approve.

Can I use bonus income as an expat? 

This depends heavily on which lender is being proposed and how often the bonus income is paid. It can be difficult to use for servicing purposes when it comes to expat and non-resident lending.

How much income do I need to secure an expat loan approval? 

Because of the rules above that most lenders apply, your taxable income generally needs to exceed $250,000 AUD PA equivalent. Shading due to currency risk and different tax assessment rules can significantly reduce your borrowing capacity as an expat.  If your income is less than this it is often very difficult for us to meet current expat lending rules even for modest loan sizes.

What currency do I need to earn to be eligible for an Australian expat home loan?

Most lenders require that your income is earned in primary currencies like;

  • United States Dollars (USD)
  • Pound Sterling (GBP)
  • European Euros (EURO)
  • Singapore Dollars (SGD)
  • Hong Kong Dollars (HKD)
  • Japanese Yen (JPY)

A smaller list of lenders still accepts other countries depending on individual lender policies and includes but are not limited to;

  • Indian Rupee (INR)
  • Indonesian Rupiah (IDR)
  • Vietnamese Dong (VND)
  • Chinese Yuan (CNY) / Renminbi (RMB)
  • Emirati Dirhams (AED)

What if my payslips and other supporting information are in a foreign language?

If your support documents are not in English they must be translated into by an accredited translator (most Australian lenders accept NAATI as a standard translation service).

What if I don’t have Australian Citizenship or PR Visa status – can you help me?

Unfortunately if you do not hold Australian citizenship, PR residency or New Zealand citizenship we are currently unable to assist you based on our available lending policies.

I am a self-employed expat – can I secure loan approval? 

Being self-employed has many benefits but borrowing money as a self-employed expat can greatly reduce the number of lenders who may be able to support your plans. While not impossible we may be able to assist you especially if your tax returns are up to date and are published in English.

I want to know more about expat mortgages – how do we meet?

Want to get some tailored mortgage advice from someone who knows what they are talking about then feel free to book a time here for a quick 15 minute chat or jump onto the chat box on our website now (it will confirm if one of our brokers are online for a chat).

Book your 15 minute online chat here!

Of course, you can also call us in the office on 1300 706 540 for a chat during normal business hours. If we miss your call leave a message and one of our team will usually get back to you within one or two business hours.

Moving house doesn’t have to be so heavy

Posted on by Clinton Waters

We of course help clients everyday arrange competitive home loans for new homes and renovations and of course one of the outcomes is having to move all of your stuff from one place to the other.  Now we have all been there and moved ourselves and our friends many times over and I am pretty sure no one enjoys the joy of getting a four seat couch down a staircase! I for one will never forget dropping my mates grandmothers old piano on the front garden when I was in my late twenties (sorry Simon!!).

Now while you could look up ‘removalist’ online and take your chances an Australian company has come up with a great but simple idea. Muval is a platform that connects removal companies with people and businesses looking to move items locally or interstate. It removes the hassle of calling around for multiple quotes from different companies and removes the uncertainty and dread that is often associated with the moving process.

Given how time poor we all are and how much most of us loath moving why not lookup Muval and give them a go for your next home move – we recommend their services to our clients so give it a go next time for your move.

COVID19 – Advice and guidance for finance hardship applications

Posted on by Clinton Waters

Over the past 2 weeks we have fielded numerous enquiries from our clients with questions and concerns about how to approach lenders for hardship support relating to COVID19 and the impact this may have on their mortgages, rates, credit histories etc.

To ensure our clients get the most accurate advice, AXTON Finance have been in regular contact with the banks and lending institutions we work with and with whom all of our clients have mortgages.

In our earlier communications we noted that a hardship repayment holiday is not ‘interest free’ and that such a holiday may extend the term of the loan or the interest you pay over the life of the loan. As such, it is important to understand what this means for your long term, and that if you have some capacity to make repayments towards your loans, then it may serve you well to do so.

The encouraging fact to note is that all lenders have in place support for borrowers to receive repayment assistance.

The most important action anyone can take under these trying circumstances is to proactively communicate with your lender, and to do so before any repayments are delayed or missed.

Banks and lenders approach and support to hardship is evolving, and as we write this, most lenders are treating the conversion of a principle loan repayment to interest only as ‘credit critical’ (this means such a change to your loan contract will only be permitted through a full assessment via a loan application). There is some political push from the government towards the banks and lenders to simplify this process, however as it stands a full assessment is usually required.

What is useful to understand, however, is that in applying for and obtaining hardship assistance means whilst it is not necessary for you to make a repayment during the hardship period, you may be permitted to.

The upside here is that in remaining under a P&I agreement, you will be incurring interest at a lower rate (Interest only terms tend to be priced higher for risk). So you may effectively be getting interest only terms at a lower rate without actually needing to go through a full loan assessment (providing you meet the hardship criteria).

There is some inconsistency between lenders as to how they treat the repayment. Some lenders advise these payments will be available for the borrowers during and after the hardship period if they needed to redraw. Others have advised these are not. So it is very important to ask your lender what availability you will have to cash paid into your loan during or after a hardship period. They may even take the view that if you can make a repayment, you may not qualify for hardship…

New loan application, current applications…

Most lenders are quickly updating credit policies to accommodate risk associated with COVID19 and request additional information and explanation around job type/industry to identify is this may impact ability to repay in the near future. Some lenders are asking applicants to provide disclosures and confirmstaions along the following lines:

The COVID-19 crisis is causing significant social and economic disruption. Applicant(s) to advise how they foresee this affecting their current financial position (including income) and how they will financially navigate that affect. This approval is subject to the Lender understanding and acceptance of this affect.

To Summarise:

  • Be proactive with your communication, ask for assistance before you miss a repayment;
  • Understand the impact and accessibility to any payment made during a repayment holiday;
  • If there was no loan conduct issues prior to COVID19, any hardship or repayment holidays granted as a result of COVID19 impacts will not effect your credit history;

Impact on Credit History

Borrowers who are granted a six-month deferral on loan repayments will not have their credit rating affected as a result of the holiday, so long as they were up to date with repayments prior to the economic impact of COVID-19.

“If a customer is granted a deferral on their mortgage and other credit products because of COVID-19, banks will report customers as not having missed a repayment, provided they were all up to date when granted relief,” explained ABA CEO Anna Bligh.

As always should you have any questions we are here to help – while we may be working remotely during this time please call the office on 1300 706 540 and one of our team will be able to help you.

Take care out there!

James Hardiman I General Manager

AXTON Finance

Photo by Branimir Balogović on Unsplash

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