Mortgage loan question

Are there any options for increasing your loan amount if one person has foreign income and it won't be considered? Basically we have two people, can afford the loan we want on paper but because one of the incomes is foreign it won't be considered, or will be at a significant reduction, meaning we can't borrow as much as we need to.

Are there any options that we might not have considered? Is it possible to have someone else be the joint borrower that has an Australian income that will be considered?

 

you could try a different lender.

Adding a borrower would mean they would need to benefit from the loan somehow - being an owner generally. But this would have CGT and stamp duty consequences.

 

Plenty of lenders do include foreign income in their calculations. There are generally two potential challenges:

1. Proving the foreign income. Not a problem in most cases, but if it's self employed income or similar that needs to be verified via a tax return, it's a real challenge.

2. Most lenders only consider a percentage of the foreign income and often then apply Australian tax rates to it. I've seen cases where the income the lender used was only 40% of what was actually being earned.

 

Thanks for the quick responses, the broker we spoke to was who told us it couldn't be counted because of tightening restrictions on foreign investment. Of the three places we called personally to ask only one said yes, but at 30%, which is obviously not ideal.

 

What's the nature of the foreign income? How is it earned?

 

Proving wasn't the issue, it's been deposited here for about a decade and we have all the relevant paperwork they wanted, they just said 30% was all they take into account for foreign income, and the others said they don't accept it at all regardless of the source, duration or paperwork.

 

That's not answering my question. What is the nature of the foreign income, how is it earned?

If you're looking for help in finding a lender that will accept the income, then we need to know more about the nature of that income.

 

Is this a broker or a mobile lender for a bank?

 

Dies the foreign income earner have PR or citizenship? Or pure none resi?

 

Sorry about the late response, writing for a gaming company.

It was 3 of the big banks, anz, HSBC and bankwest. It was a broker who we spoke to after that said no one will accept it anymore because of the tightened restrictions.

One is a citizen, the other is a permanent resident

 

With your overseas income, do you receive them as a PAYG or you operate under self employed? What currency do you earn?

Its a bit weird why the broker picked those three. For HSBC unless you are a premier customer already for a continuous of 6 month I don't think they can even consider.

Bank of China might be an option for you as I know they treat overseas income very generously at something like 80% rather than what most big4 banks does only consider 60%.

 

You've not given us enough information about the foreign income for anyone here to be able to help you, suggest you read back through the responses here...

 

I thought I'd answered everything, though I see I didn't specify the foreign income earner was the permanent resident. I'm unfamiliar with payg as it's not a term we use. It's a permanent part time position that is flexible deadline based as it is remote.

 

Probably try answer the following:

1. How many applicant?
2. What currency does the overseas income earner receive?
3. Does the main income earner resides in Australia or overseas?
4. Does the main income earner pay tax in Australia or not?

 

This is the important information.

This type of income isn't a problem, there's plenty of lenders that will accept between 70% - 80% of income from an overseas job as long as it can be verified via payslips combined with bank statements. Serviceability isn't great because lenders only use 70%-80% of the income, but it's not as restrictive as has been indicated.

 

I had one last week that was a PR and a citizen in India. They'd consider 80% of the income, up to 70%lvr. Person didn't go ahead as interest rate was high 5s.