If you are looking to purchase a property in Australia but you currently earn foreign income, the process of securing a loan will be different.
Foreign Income Will Affect Required Documents
When preparing for a home loan in Australia, most lenders require all financial documents to be in English.
If your documents are not in English, some lenders will request an interpreter’s certificate. You can obtain an interpreter’s certificate from a translator at an organisation recognised by the lender, either in Australia or overseas. Once you have the certificate, the lender will not need the original, non-English versions.
All lenders have different requirements when it comes to proof of income. Usually, lenders will accept payslips from first world countries, or, if you are self-employed, they will accept certified tax returns.
If someone else employs you, documentation that may be required includes:
- Two payslips
- Tax returns
- A letter from your boss
- Three months of bank statements
If your are self-employed, documentation that may be required includes:
- Two financial years of tax returns
- A letter from your accountant
Required documentation will also depend on the tax system of the country you earn income from. Dubai, for example, has no tax – this could be an issue for some lenders. For these situations, we can usually evaluate your financial documents under the Australian tax system.
Foreign Income Will Affect the Amount You Can Borrow
Because of currency fluctuations, lenders will convert your income to Australian dollars, and then reduce it by about 10%. Some lenders will only consider 80% of your income. This means if you earn $100k USD, you may only be able to use 80% of it to service the loan.
Banks will also assess your foreign debt at Australian interest rates, which can be higher than the interest rates you currently pay.
If you’re ready to purchase a property in Australia with a foreign income, we can help. Give us a call today on 02 9068 6644 or send us a quick email.