Difficult to secure a home loan

[NightCrawler]

Am currently an AUS PR renting (In Melbourne) on the lookout to buy a house in Australia. With limited savings and rejections from the big 4 banks.A mortgage broker in Singapore has suggested that we take up a bank loan with a UK bank, Lloyd's bank to purchase a house here in Australia. The loan will be converted from AUD to SGD. The monthly instalment seems to be lower than it is compared to the banks here in Australia and that seems to be attractive. The interest rates in Australia keeps going up and up.

Does anybody have any advice if this is any good? Or if you had borrowed from an offshore bank to buy another house in Australia? Has anybody heard about Lloyd's bank? Are they any good?

Thanks in advance.

 

[n1etzche]

Am currently an AUS PR renting (In Melbourne) on the lookout to buy a house in Australia. With limited savings and rejections from the big 4 banks.A mortgage broker in Singapore has suggested that we take up a bank loan with a UK bank, Lloyd's bank to purchase a house here in Australia. The loan will be converted from AUD to SGD. The monthly instalment seems to be lower than it is compared to the banks here in Australia and that seems to be attractive. The interest rates in Australia keeps going up and up.

Does anybody have any advice if this is any good? Or if you had borrowed from an offshore bank to buy another house in Australia? Has anybody heard about Lloyd's bank? Are they any good?

Thanks in advance.

if the exchange rate move drastically against you...

 

[axe168]

Am currently an AUS PR renting (In Melbourne) on the lookout to buy a house in Australia. With limited savings and rejections from the big 4 banks.A mortgage broker in Singapore has suggested that we take up a bank loan with a UK bank, Lloyd's bank to purchase a house here in Australia. The loan will be converted from AUD to SGD. The monthly instalment seems to be lower than it is compared to the banks here in Australia and that seems to be attractive. The interest rates in Australia keeps going up and up.

Does anybody have any advice if this is any good? Or if you had borrowed from an offshore bank to buy another house in Australia? Has anybody heard about Lloyd's bank? Are they any good?

Thanks in advance.

It doesnt matter who lend you the money.. as long as you achieve your goal and the interest is low.. it benefits you ! However, I have to warn the foreign exchange risk.. 2 yrs back, when AUD nose dived, I was asked to top up 100k to make up for the short fall.. knn, i was only given 3days to T.T. over to Sg.. But then I enjoyed a low interest of <2% :p
Borrowing is so easy these days.. it doesnt have to be local

 

[ManBearPig62]

Have you tried talking to a local broker instead? Some of the non-bank or second tier lenders they have access to may be more flexible.

I'm not sure why you are using a Singapore broker.

How many brokers have you contacted? If the answer is "not many", I would suggest you talk to more brokers and see what they can offer. Some may be able to get you more favorable terms with the Big 4 using their relationships/connections.

Try going to the finance section of www.somersoft.com/forums and talking to some of the brokers there.

If servicability is the reason the banks are rejecting you (in light of Melbourne prices), consider buying a unit first instead of a house.

Personally I wouldn't complicate matters by using a foreign lender unless there is absolutely no alternative. Yes, the interest rate may be lower. Someone has already mentioned the currency exchange risk. The longer the term of the loan you are taking, the bigger this risk is as there is a greater risk of currency fluctuations over longer periods of time.

There may be other risks we are unaware of... so if you choose a foreign lender, do your research.

 

[ManBearPig62]

Read your post again and had some second thoughts.

* Are you a new migrant? (ie recently arrived)
* That's why you are using a Sg broker?
* No Australian job/track record, so the Big4 rejected you?
* That would explain the limited savings also, PR = no CPF withdrawal.
* Signed house contract already or just checking out how much you can borrow first?

What would an Sg broker know about Australian banks? Pardon me for being skeptical but it sounds like he just wants his commission from placing you with one of his lenders... rather than forwarding you to someone else who may be able to do something.

 

[NightCrawler]

* Are you a new migrant? (ie recently arrived)
Been here for 3 years with Aus experience
* That's why you are using a Sg broker?
* No Australian job/track record, so the Big4 rejected you?
3 years with Aus experience,the banks expect 20% deposit.
* That would explain the limited savings also, PR = no CPF withdrawal.
* Signed house contract already or just checking out how much you can borrow first?
Checking how much i can borrow first before i set my expectations
What would an Sg broker know about Australian banks? Pardon me for being skeptical but it sounds like he just wants his commission from placing you with one of his lenders... rather than forwarding you to someone else who may be able to do something.
Am worried that i would be taken for a ride so got to research first.

 

[NightCrawler]

It doesnt matter who lend you the money.. as long as you achieve your goal and the interest is low.. it benefits you ! However, I have to warn the foreign exchange risk.. 2 yrs back, when AUD nose dived, I was asked to top up 100k to make up for the short fall.. knn, i was only given 3days to T.T. over to Sg.. But then I enjoyed a low interest of <2%
Borrowing is so easy these days.. it doesnt have to be local

Thanks Axe,

Just out of curiosity.How is it that you need to top up 100K when the Aus dollar dropped within 3 days ? Don't they give you X months to top it up.

 

[axe168]

Thanks Axe,

Just out of curiosity.How is it that you need to top up 100K when the Aus dollar dropped within 3 days ? Don't they give you X months to top it up.

It works out approx 75% of the market value. If you borrow say 375k and property is worth 500k.. you pay around $125k. If the AUD drop by 20%.. your property will drop $100k... hence you have to make up the short fall ($100k)..
I'm not sure about the details.. speak to the respective banker. A good solution is to provide 50% capital and borrow 50%.. so if market fluctuates at 20-45%, ya safe !

To the best of my understanding : to qualify you need to earn approx SGD 200-300k per year.... they are looking for big client who has the money to play around the exchange rate.. I was told bluntly they do not entertain small fly... those ppl have to apply thru the counter.. for those who fit the bill, they will provide a good customer service & facilitate your process..

Good luck !

 

[Satan]

* Are you a new migrant? (ie recently arrived)
Been here for 3 years with Aus experience
* That's why you are using a Sg broker?
* No Australian job/track record, so the Big4 rejected you?
3 years with Aus experience,the banks expect 20% deposit.
* That would explain the limited savings also, PR = no CPF withdrawal.
* Signed house contract already or just checking out how much you can borrow first?
Checking how much i can borrow first before i set my expectations
What would an Sg broker know about Australian banks? Pardon me for being skeptical but it sounds like he just wants his commission from placing you with one of his lenders... rather than forwarding you to someone else who may be able to do something.
Am worried that i would be taken for a ride so got to research first.

The banks would expect a 20% deposit or at least a 10% deposit and the remaining 10% they would expect you to take some form of insurance which can be about $5k-$8k depending on the size of the loan. However as has been sugessted, please do yur research before using foreign lenders.

 

[Aussie Prick]

Am currently an AUS PR renting (In Melbourne) on the lookout to buy a house in Australia. With limited savings and rejections from the big 4 banks. The interest rates in Australia keeps going up and up.

Does anybody have any advice if this is any good? Or if you had borrowed from an offshore bank to buy another house in Australia? Has anybody heard about Lloyd's bank? Are they any good?

Thanks in advance.

Do you have the income requirments to purcahse? I know that the median A$ 430K property requires A$ 104,200 in income (S$ 130K) for the bank there to even consider approving your loan.

 

[Asychee]

Am currently an AUS PR renting (In Melbourne) on the lookout to buy a house in Australia. With limited savings and rejections from the big 4 banks.A mortgage broker in Singapore has suggested that we take up a bank loan with a UK bank, Lloyd's bank to purchase a house here in Australia. The loan will be converted from AUD to SGD. The monthly instalment seems to be lower than it is compared to the banks here in Australia and that seems to be attractive. The interest rates in Australia keeps going up and up.

Thanks in advance.

Hi buddy, let's use our creativity juices a little. U at thinking of it from the traditional way of holding Residential real estate. Why not take a few pages out of the Commerical RE.

Let's think from the perspective on how you can control the property rather than owning it. In Canada not sure about OZ - go to a good realtor (investment) or Real Estate lawyer to check out the mechanics, you can do a Agreement for Sale (terms 1 year etc up to you) - the mortgage is still under the name of the previous owner. You secure your interest by registering a caveat in the Land Title. I purchase 1 house this way before - i had an agreement for sale. The seller pre-sign all the transfer documents, my responsibilities - make sure that mortgage is paid on time, i put into the lawyers trust account 2 months of mortgage payment to be on the safe side & give seller the peace of mind. If i missed payment property gets reverted back to the seller. The term of the mortgage is for left - 4 years.

Why does the seller wants to do it this way?

Seller property is dated and wants out of the property as she is are getting old and wants to move to a Long Term Care facility. She refinance and took out the equity and i paid very little to control this property. I used it to house my foreign workers and cashflow positive very well. Right now the property has appreciated well, since i have lock down the price. I can re-assigned the contract to another person. i will make from the spread.

Why do you wanna to do it this way?

This will help you to build up your relationship with the bank via the current owner mortgage.

Mortgages does not register on Credit history of credit reporting company (only that particular bank credit history - that you deal in). During the term of your mortgage, you can build up the credit history or income level to qualify for your own mortgage.

I am quite sure you can do it in Oz and other places.

You can start by looking for this sort of property in the Realtor expired listing. The idea is to get into a functional house 1st in a decent neighbourhood and slowly increase the value by up dating it.

Downside - you tend to find these type houses in a mature neighbourhood & closer in the city.

Upside - the amenities are in place oredi.

 

[axe168]

Hi buddy, let's use our creativity juices a little. U at thinking of it from the traditional way of holding Residential real estate. Why not take a few pages out of the Commerical RE.

Let's think from the perspective on how you can control the property rather than owning it. In Canada not sure about OZ - go to a good realtor (investment) or Real Estate lawyer to check out the mechanics, you can do a Agreement for Sale (terms 1 year etc up to you) - the mortgage is still under the name of the previous owner. You secure your interest by registering a caveat in the Land Title.

Wah.. very creative indeed ! I never know we could do this.. normally bank will register a "caveat" on the title.. Hmmm, we could do that too?! interesting..

 

[QXD]

Seems like its a viable idea if the property can be positively geared by rental income alone from the start of the agreement.

This method can help a person "bulk up" in terms of increasing borrowing power.

Wah.. very creative indeed ! I never know we could do this.. normally bank will register a "caveat" on the title.. Hmmm, we could do that too?! interesting..

 

[axe168]

Seems like its a viable idea if the property can be positively geared by rental income alone from the start of the agreement.

This method can help a person "bulk up" in terms of increasing borrowing power.

I believe this method can only be applicable if it is a so-so economy.. when the market is red hot, I reckon no owner will like to lock in the price.. In Melbourne, they normally go for Auction - unconditional terms..

 

[Asychee]

I believe this method can only be applicable if it is a so-so economy.. when the market is red hot, I reckon no owner will like to lock in the price.. In Melbourne, they normally go for Auction - unconditional terms..

We just had a so-so economy so this kind of deal is around. Right now, economy has started to pick up. I would say that this is harder but not impossible.

In my case, i stay away from auction or multiple offer situation. Sometime seller's realtor try to play punk - they will try to talk up the offer. I just give verbal offer via my realtor but do not put it in writing and talk up as high as possible. At the end of the day, whoever that gives the commitment in writing kena.(hee hee). It is best when that side also do the same - the realtor end up with no deal. Then that when i come back in on my terms.

I think this training - thanks to studying in the worst school in sg. Every day after school have to negot with "Pai kia". It exercise your creativity to the max. hahaha

 

[axe168]

I think this training - thanks to studying in the worst school in sg. Every day after school have to negot with "Pai kia". It exercise your creativity to the max. hahaha

Hey same here ! haha.. once I was involved in a fight with them, 3 versus me (1)... my never-say-die attitude and my fighting spirit keeps my alive !