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Citibank opens up non-resident lending

Discussion in 'Property Finance' started by Simon Moore, 3rd Jun, 2016.

  1. Simon Moore

    Simon Moore Mortgage Broker - Melbourne Business Member

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    Citi just put out an announcement that they are opening leading up to 75% LVR (80% for Citigold members) for loans requiring Foreign Investment Review Board approval (where income is earnt in the below currencies), or where income for servicing the loan come from the following currencies (expats).

    Canadian Dollar (CAD)
    Danish Kroner (DKK)
    European Union Euro (EUR)
    Hong Kong Dollar (HKD)
    Japanese Yen (JPY)
    New Zealand Dollar (NZD)
    Swedish Kroner (SEK)
    Singaporean Dollar (SGD)
    South Korean Won (KRW)
    Swiss Franc (CHF)
    UK Sterling (GBP)
    United States Dollar (USD)

    There are a few restrictions:
    • Income used in the capacity test to match applicant’s nationality (Au citizens/PR excepted)
    • No loan can be approved that relies solely on rental income
    • No construction loans or vacant land
    • Borrower must be individual. No company or partnership allowed as borrower
    • Completely clean credit history on all applicants and passes Veda score
    Still no luck for Chinese property purchasers (soooooo much fraud), but great for expats!
     
  2. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Good news.

    As predicted by some an easing up on non resident lending.
     
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  3. York

    York Finance Broker Business Member

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    This should pick up a alot of the vacuum created by the recent ceasing of lending by other lenders.
     
  4. euro73

    euro73 Well-Known Member Business Member

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    They made this announcement @ month ago... these changes took effect May 6th. This is old news I'm afraid.

    "The End of Foreigners Buying Australian Property"

    Their BDM's pumped it out again on Friday afternoon as a follow up.

    I would not see this as an easing up...I would see this as a "business as usual - except Chinese earning borrowers can move right along, thanks very much..."

    They saw a 10 fold increase in Chinese borrower applications within days of Westpac pulling the plug and they are worried they are importing all the dodgy/fraudulent practices from those broker groups, so they have decided to put some new policies in place to try and better scrutinise those deals - and those brokers .... so for the time being they are out of that Chinese market. But just like Westpac and the others - Citi will be back once they get some more robust Chinese income verification procedures set up...

    Right now, borrowing as a non resident is hard..but it will pass. It wont be the non resident lending thats going to put all the OTP settlements at risk later this year and throughout 2017... its local borrowers who no longer have sufficient borrowing capacity to qualify for the loans they are yet to try and secure.... they are the greater risk.
     
    Last edited: 5th Jun, 2016
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  5. MindMaster

    MindMaster Well-Known Member

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    What about expats with Chinese income (rmb)?

    You mentioned this is great for expats but the rmb was not one of the listed currencies.
     
  6. euro73

    euro73 Well-Known Member Business Member

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    The currencies listed are the currencies that are acceptable to Citi
     
  7. Simon Moore

    Simon Moore Mortgage Broker - Melbourne Business Member

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    Unfortunately if you are getting paid in RMB, then you are currently not acceptable to Citi :(
     
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  8. MindMaster

    MindMaster Well-Known Member

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    Thanks Simon, that is pretty much what I expected after reading your post.
     
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  9. Dean Collins

    Dean Collins Well-Known Member

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    Simon what rates are being offered for fixed IP I/O 5 year <70%LVR ?
     
  10. Simon Moore

    Simon Moore Mortgage Broker - Melbourne Business Member

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    On loans >$500,000 it's 4.74% (5.03% comarison rate*).

    *WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.
     
  11. Dean Collins

    Dean Collins Well-Known Member

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    thanks and boooo :( higher than the St George Portfolio Loan which is meant to be expensive at 4.54%
     
  12. Paterson00

    Paterson00 Well-Known Member

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    Am I understanding this right in thinking that this means that if you earn your money abroad but want to buy in Australia this is good news?

    I would love to be wrong and that this news means that I am now able to purchase a property in the USA at 75% LTV using my Australian income and the rent from the USA property.

    Can you clarify? I would love to buy in the states but as far as I know the only thing I can get at the moment is a USA based mortgage at 65% LVR. Not sure on the rates though but I recall them being very competetive over the AU rates.
     
  13. Simon Moore

    Simon Moore Mortgage Broker - Melbourne Business Member

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    You are right, sorry mate :(
     
  14. Paterson00

    Paterson00 Well-Known Member

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    Another time perhaps then, never mind