The steps required to get a mortgage when working abroad
Buying a house when getting a job abroad
July 13th, 2010
Getting a job abroad can be a daunting prospect for even the best travelled person. Traditionally a company would either provide accommodation or the employee would rent out a house or apartment.
It is now becoming more common for a person to buy a house abroad, either because it is cheaper than renting or it is seen as an investment in the long term. There are many reasons for buying a house, but getting a mortgage can be quite a hard thing to do.
One of the first things to remember about getting a mortgage on a foreign property is that although the concept of a mortgage is the same throughout the world, the mortgages that are acquired can be quite different. This is for two main reasons, firstly the law on owning land may be quite different (particularly in non-English speaking countries) and secondly the laws on consumer lending can be considerably different, and the unintended consequence of most consumer protection legislation is that it makes the ability to obtain a home loan considerably harder.
The first thing that a person getting a job abroad should consider when buying a home is whether to get the home with an Australian mortgage or with a mortgage from a domestic bank. This can make a big difference in the range of mortgages on offer, as many Australian banks are unwilling to lend to a person who is both resident abroad and employed abroad, unless they have significant roots in Australia.
However borrowing from a domestic bank can also be difficult. This is usually because domestic banks tend to want to see a credit history. Credit histories are not unusual for mortgages. After all the mortgage is a loan which can severely harm a lender if it is not paid back. The problem is that credit ratings do not tend to be transferable, and so if a person goes to a new country that he or she has never spent a significant time in then they will find that there is no credit rating and that a lot of the mortgages will not be available.
One way around this has been to remortgage a property in Australia if there is significant equity in it to either buy a new house outright or to raise a significant deposit. Significant deposits will tend to make it easier for less standard borrowers to get a home loan.
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