From working out residency status to juggling loan terms, it helps to know what comes next when you’re searching for a mortgage. If you’re a new immigrant mortgage seeker, this guide explains each step of the journey.
By the time you finish, you’ll have a clear path toward a home purchase – even if you’re still sorting visa type details.
Know Your Residency Status
First, check your visa status. Visa holders face different lending criteria than permanent resident applicants – as you might expect. Temporary residents often need to demonstrate a higher deposit because many lenders treat them as higher risk.
And again, anyone who holds permanent residency or already carries Australian citizenship usually finds it way easier to access competitive rates. In fact, most lenders will ask for proof of residency status before approving home loan finance.
Compare Lenders and Rates
It obviously gets a bit overwhelming to pick the right lender given how many of them there are and how they all claim to have the best deals. Some home buyers turn first to big banks, but non bank lenders may offer more flexible options if you have a limited credit history.
So that’s why shopping around will give you a better insight into which financial institution actually suits your needs. And when you do compare, look beyond advertised interest rates on an investment property or owner-occupied home. Check:
- Fees
- Minimum loan amounts
- Loan terms
All of these details will impact what your monthly repayments and overall costs look like more than a few basis points on your mortgage rate.
Work Out Your Budget
Determine a realistic purchase price before you start hunting properties. Your home loan commitment naturally hinges on your financial situation. So that’s your:
- Income
- Outgoings
- Savings
And then there’s additional costs like stamp duty and potential lender’s mortgage insurance if you borrow more than 80%. If this is your first home, see if you qualify for a home owner grant.
Many states and territories offer first-home buyer incentives that reduce upfront expenses. Once you’ve tallied everything, you’ll understand how much deposit you need and what loan size you can afford.
Seek Professional Advice
A qualified broker:
- Handles all the complex loan approval paperwork
- Highlights loan options you might miss
- Helps negotiate with lenders
- Has insider knowledge on exclusive offers and can speed up your application
And your broker can also guide you through the FIRB approval process if you want to purchase property as a foreign citizen. That’s the Foreign Investment Review Board check that temporary residents and foreign citizens must pass before buying. Skipping this step leads straight to delays, or worse, rejected applications.
Understand FIRB Approval
When non-citizens look to buy a house or investment property, FIRB approval becomes mandatory. The foreign investment review board examines applications based on your visa type and intended property use.
If you’re an Australian citizen or permanent resident, this doesn’t apply – your path is naturally simpler. But foreign citizens must secure FIRB approval to avoid breaking the law. So that means having documents like your passport and proof of income ready early on.
We’d definitely recommend starting this process alongside your home loan finance application so you avoid missing out on the right property – FIRB decisions can take weeks.
Check Your Credit History
Limited credit history can slow down loan approval. If you’re new to Australia, your bank statements and credit file might not carry enough data. That doesn’t outright wreck your chances, but it does mean you’ll need extra proof:
- Payslips
- Employment contracts
- Savings records
Some non bank lenders accept alternative evidence of good financial behaviour, like rent payment history.
Plan for Additional Costs
You’ve got more than just your monthly repayment to pay so factor in costs like maintenance and rates. An investment property, for instance, is great for rental income, but there are always unexpected repair costs.
And remember that an increased deposit may influence cash flow if you buy a property to rent.
You’ve also got to think about homeowner insurance and strata fees (if you’re in an apartment) if you’re planning on living there yourself since these form part of your ongoing expenses.
We get that this is a lot to think about, but it definitely helps you avoid nasty surprises down the line if you’re diligent about it now.
Decide on Loan Features
Shorter loans generally give you lower interest rates in exchange for higher monthly repayments. So it might be better to choose a 20-year term to pay the mortgage off sooner if you have a stable income.
Variable rates are good if you want more flexibility since they let you make extra repayments without any penalties.
Fixed rates are a bit better if you want more peace of mind for a set period, though you still face break costs if you refinance early.
Gather Required Documents
When you’re finally ready to apply, compile everything:
- Proof of identity
- Visa documentation
- Employment evidence
- Bank statements
- Details of existing debts
- FIRB approval confirmation
Getting all your paperwork together nice and neat like this is definitely worth it as it shows that you’re serious about the home purchase.
Partner with the Right Professionals
A good mortgage broker helps you filter through dozens of loan products to find competitive rates that match your circumstances.
And for foreign citizens, they coordinate FIRB approval and lodging. If you’re an Australian citizen with limited credit history, they’ll flag suitable non bank lenders. And even if you hold permanent residency, their relationships with lenders often get you offers that aren’t on the shelf.
Apply and Secure Loan Approval
When you submit your application, expect to hear back within one to two weeks. Loan approval depends on more than your income; the underwriter reviews:
- Your credit
- Deposit size
- The property itself
They check the purchase price against a valuation to ensure it’s consistent with market levels. They also consider rental income projections and vacancy rates if you’re buying an investment property.
Once you get formal approval, you’ll receive a home loan approval letter. This document sets out all the important stuff – loan amount, interest rate, loan terms. Then after you sign this, you’ll move to the settlement and finally collect the keys!
Final Thoughts on Your Home Purchase
That journey – from sorting your visa status to finalising stamp duty – is unique for everyone. But by staying organised and working with an expert who knows what they’re doing, you’ll find it’s really not that bad.
How Upscore Can Help
Ready to make your move? Sign up for Upscore’s Finance Passport today where you can:
- Compare options across multiple lenders
- Lock in competitive rates
- Get personalised support for your new mortgage journey
It’s completely free – no upfront costs because we earn a fee from the lenders if you get a loan – so take it as your risk-free first step toward home loan finance!
