Buying an Investment Property With a Migrant Mortgage: Five Myths and The Truth Behind Them
If you are a migrant in Australia, it may be possible to use a migrant mortgage loan to buy your primary home, as well as investment properties such as homes to rent out, commercial buildings and even blocks of flats. Unfortunately, however, many migrants who may be interested in investment properties often do not even apply for these loans. Instead, they are held back or scared away by myths about the process.
If you are a migrant interested in buying an investment property in Australia, here is a look at five myths and the truth behind them:
1. Myth: It is impossible for migrants to get mortgages.
Truth: When a bank lends someone a mortgage, the bank needs to take precautions to ensure they are making a wise choice. As part of that process, lenders typically look at the individual's income, past borrowing history and other factors.
With migrants, banks may be reluctant to grant loans, as the migrants theoretically may stop paying them and move back to their home countries. In contrast, it is not as easy or likely for an Australian to walk away from that responsibility without facing repercussions.
However, in spite of that fact, there are banks that offer mortgages to migrants. In fact, there are banks that specialise in the practice. To increase your chances of getting approved for an investment loan in spite of your migration status, try to work with a bank that specialises in these loans. Their loan officers will have the expertise you need to get approved.
2. Myth: You have to have an investor visa to get a mortgage for an investment property.
Truth: If you don't have an investor visa, that doesn't necessarily mean that you are not able to get a mortgage for an investment property. Migrants with a range of visas -- including skilled worker visas, temporary resident visas and a range of other work-centered visas -- can all apply for migrant loans. And with the right approval, they can use those loans to purchase properties with the intention of renting them out.
Don't assume that your visa prohibits you from investing. Instead, talk with a loan officer so you can fully assess your options.
3. Myth: You only need bank approval to get a migrant mortgage for an investment property.
Truth: Although lender approval is critical if you want a loan to buy an investment property, the lender isn't the only entity that needs to approve your idea. Whether you are opening a restaurant, buying an investment property or investing in Australia in any other way, your proposal needs to be approved by the Foreign Investment Review Board.
The FIRB looks at all requests from foreigners who want to make investments in the country to determine if those investments are in the best interest of the country's citizens. If you don't get approval from the FIRB, you cannot get the loan even if the bank says yes. To increase your chances of success, work with a lender who can help you get both bank and government approval.
4. Myth: You have to sell your investment property if you leave the country.
Truth: Some migrants shy away from the idea of buying an investment property because they think they may have to sell it if they eventually decide to move back to their home countries. Fortunately, that is not true. If you are approved by the review board, you are a legitimate investor, and you can continue to run your investment property from abroad.
Keep in mind, however, as a landlord running an investment property from abroad, you may need to hire property managers, and you will still need to file and pay Australian taxes on your investment.
5. Myth: You have to do everything on your own.
Truth: Buying a home can be a complicated process, and buying an investment property can involve even more hurdles, especially if you also have to deal with the government's rules regarding foreign investors. Luckily, you don't have to deal with all of that on your own.
When you contact a migrant mortgage lender, you get access to an individual who has a lot of experience working with migrant borrowers in particular. Migrant mortgage brokers can help with every aspect of the process, from organising financial details, to submitting paperwork to the FIRB, to ensuring you are compliant with all of the relevant laws and regulations.
If you are ready to learn more, contact a migrant mortgage company like Migrant Finance.