Foreign Income for Mortgage loan

Discussion in 'Loans & Mortgage Brokers' started by pichoo, 24th Mar, 2020.

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  1. pichoo

    pichoo Member

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    I'm doing online business and receive foreign income. I'm an Australian citizen and a resident for tax purposes. I've an ABN and my business is in Australia. I pay US tax as well as Australian tax. I'm currently buying an investment property, however my mortgage broker spoke to the big 4 banks and apparently he came to conclusion that the banks don't accept foreign income. (They might deem it as less stable).

    I was wondering if anyone had the same experience? Do the big 4 banks really don't accept foreign income for property loan, even if I'm a resident for tax purposes? My broker suggested me to use another financial company, however the interest loan is slightly higher (about 1% higher) and I would need to pay 1% fee of the total loan.
     
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    The big 4 accept foreign income in US$
     
  3. lettert

    lettert Well-Known Member

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    My experience has been that big 4 will not give loan on foreign income, try Citi they have in the past for usd income
    Who did your broker suggest?
     
  4. pichoo

    pichoo Member

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    Thanks guys. Why would they need to see it in USD? The income is already in AUD, which they can see from the bank statements and tax return. My broker suggested Latrobe.
     
  5. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    I guess the problem might be proving the income in that case. AUD should be fine - this is Australia after all!

    Are you declaring the money here and do you have 2 years tax returns?
     
  6. lettert

    lettert Well-Known Member

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    Hmm ok
    Tbh I’m not sure about the need to see it in usd
    Or Aud but have found Citi tend to be ok with foreign income but not big 4 or even tier 2 in recent days
    This is with 2+ years of income, Citi rates are not that much worse either
     
  7. pichoo

    pichoo Member

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    Yes I declare tax here in Australia and yes I have 2 years tax returns. However the 1st year was smaller, because it was a new business, so we didn't present it. Might be worth to show the 1st year as well, as it was well above average salary.

    Thanks lettert, after researching about it a bit more, it seems ANZ, Citi, and HSBC are more friendly towards "foreign" income source. It's kinda weird that a business derive income from overseas are considered not stable in this day and age.
     
  8. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    I don't think this would be classed as foreign income. But it is an unusual one. ANZ might be good as they can go off one year's tax return.
     
  9. pichoo

    pichoo Member

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    Terryw, do you mean the banks may see it as a normal business income? Most of the posts or websites I searched are about expats, non-resident for tax purposes, or foreign income from dividends. In my case is I live here, have an ABN and pay tax here, it's an Australian business. I mean what more do they want :)
     
  10. lettert

    lettert Well-Known Member

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    I have gone through this multiple times in similar boat... Aussie banks are the way they are; hsbc might be ok, I’ve found Citi to be the best overall
     
  11. pichoo

    pichoo Member

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    Lettert, thanks again. I'll ask my broker or contact them myself - Citi, hsbc, and anz.
     
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  12. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    Yes normal income