The last few years have been particularly difficult for Australian expats and residents alike in obtaining financing, particularly for Australian property investors. With many Australian expats in particular being declined by their bank, or finding that their broker back at home just can’t find them a solution to their financing needs, it’s important to explore your options and explore what can be done to improve your chances of a home loan or investment property loan approval.
This week we explore the top 5 questions to ask yourself if your loan application has been declined or if your mortgage broker is advising you that your loan just isn’t passing the serviceability criteria:
- “Have we approached the right lender..?”
All too often we see people approaching the lender that they currently bank with, or obtained their previous home loan with assuming that both bank loyalty and knowing their situation will work in their favour. While in some cases this may be true, it is rarely the case, and this is even more true for Australian expats. One lender may be willing to offer you as an Australian expat $1.2M to purchase your residential investment property in Sydney, while another lender may not be willing to offer you a cent.
It’s important to understand here that credit policies between lenders can differ significantly, and when it comes to Australian expat loans, the differences can be quite significant. One example can be how much of your income the lender is willing to accept as an expat and whether or not they’ll allow you to include your annual bonus, which in many cases is a significant component of your overall remuneration and can have a major impact on your borrowing capacity. In a recent article, we cover some of the key differences between credit policies for Australian expat salaries.
- “Can we cut back on our monthly expenses..?”
One of the simplest ways to boost your borrowing capacity is to cut down on your monthly expenses for a period before submitting your loan application. This could also be a great opportunity to explore your budget as a household, and review areas you could be saving on, while also improving your chances of having your loan application approved. In a recent article, we outline some of the simple items you could be saving on each month without a great deal of effort.
- “Is our credit score negatively impacting us…?”
If you’re applying for a home loan or investment property loan, it would be well worth your time exploring your own credit report to review any areas that may be harming your chances of getting your loan approved. You can read more about how to find your credit report and also what steps you could be taking as a household to improve your credit score and therefore your chances of having your loan approved in a previous article here.
Your investment-savvy mortgage broker should be walking you through your credit report and identifying any issues that could be there, as well as strategies to improve any items that need to be rectified. If you’re not sure how to interpret your credit score, or what steps you can take to improve it, reach out to our team and we’d be happy to discuss your options.
- “Have we been submitting multiple applications..?”
One common mistake that many property investors or home buyers make is failing to realise that by submitting multiple applications with a range of lenders, they may be (and often likely are) doing more harm to their chances of a loan approval than they realise. If a loan application is submitted with a lender, and particularly if it is declined, this will remain on record for that borrower and may be a significant red flag for any new borrower that an application is submitted with.
If you are working with a mortgage broker, they should be stepping you through this process, doing the homework upfront, ensuring the right lender is selected, and proceeding with a single, well-drafted application to ensure that the chance of success is as high as it can be. This avoids the issue of multiple applications and the red flags that this can present for lenders.
- “Is our mortgage broker investment savvy and the right fit for us..?”
There are many excellent mortgage brokers in the marketplace, and many will specialise in certain areas, whether it be for first home buyers, those looking to finance a vehicle or build and appropriately structure property investment portfolios. If you’re an Australian expat looking to start or expand your Australian investment property portfolio back at home, it’s important that you work with a mortgage broker that is familiar with your situation, has the investment expertise and experience required, and most importantly knows how to present your case to the lenders.
If you’re previously been declined and you feel that this was incorrect, please reach out to our team for an obligation-free discussion of investment-savvy mortgage brokers and we’d be happy to explore your options.
LoanSuite Pty Ltd is your lending partner for all of your home loan, investment property, business and commercial financing needs. With our wide range of lending solutions, expertise in financial planning and investment strategies, and extensive experience in working with both Australian residents and Australian expats, we are your partners for your lending needs.
Book an obligation-free, complimentary consultation here today.
LoanSuite Pty Ltd is an Authorised Credit Representative (Credit Representative Number – 494608) of My Local Broker (Australian Credit License – 481374). Important Disclaimer: Your complete financial situation will need to be assessed before acceptance of any proposal or product.