Hi All,
I would like to borrow around 150k AUD to buy a property overseas which I plan to use for some of the year.
My initial thought was to take out a secured personal loan due to different title system when working with overseas property.
First lender I called (local bank) flat out does not lend for anything overseas as a matter of policy.
Does anyone know which Australian banks or financial institutions entertain lending for overseas purchases?
Thank you,
W
None of the retail banks here does this if the security is overseas-based. I've asked HSBC, Citi (when they weren't sold to NAB), and BoC and all referred me to speak directly with their overseas counterparts.
Nothing stops you from using an Australia-based asset for securitisation and sending your cashola overseas?
Using Australia based asset for securitisation was always my preferred plan, I would use my home which is mortgage free and would be worth a lot more than the $150k.
Well there's your easy solution, remortgage your home for $150k and use that to buy the overseas property.
Will definitely give you the lowest interest rate too.
Ok, so I just go to the bank and ask for the remortgage and they don't care about what the money is used for?
@WK1991: You can tell them if you want. It doesn't matter to them because the house in Australia is the security for the loan, which is what they care about.
@trapper: I don't know why you got negged for that - there are some banks / non banks that will do this, with an Australian security. Just be upfront - they may want to control the funds at settlement rather than hand you the chunk of cash but either way you'll have the funds for the property OS.
@miwahni: Lol, you two are very naive, I can tell you 90% of the time if you tell your bank this they will refuse your refinance application. You better tell them that $150k is for the bathroom reno with the tradie never showed up.
@lgacb08: Why would they say no to this?
A smallish mortgage on a much more valuable property is zero risk for the bank.
@trapper: there is a thing called responsible lending obligation behind the bank's computer screen, on the face of it there should be no issue lending him such amount but there're other thing the bank will look at before approving a loan besides security and serviceability.
I can tell you 90% of the time if you tell your bank this they will refuse your refinance application.
…
on the face of it there should be no issue lending him such amount
So which is it?
What is the loan being secured against, if not the overseas asset?
Do you already own a property here? Borrow against that, take money and go and buy overseas asset.
Ok thank you for the fast response!
I own two freestanding houses in Australia (fully paid off, no mortgage), one is my residential address and one is a rental.
I also have around $40k in investment funds and stocks.
The house I plan to buy is in Italy.
Then borrow against your house.
Tell the banks you wish to do some renovations on your PPOR.. LVR won't be an issue.
That's all well and good, but will they ask for quotes for the work as part of the loan basis?
Nope as long as your house is worth over say $300k, an LVR of 50% isn't going to flag too many questions.
This is what i did. i borrowed against my house, and said it was for renovations. The ATO will need to be advised that you have an asset more then $50k. but you even don't have to advise them where overseas.
You learn something new everyday.
I'm a citizen of an EU country. If you and your houses marry me maybe we can figure it out?
LOL those cheap houses in Italy kind of deal. You are kind of out of luck.
It just isn't a market that too many banks want to get involved in because it is a sluggish economy. Their biggest local bank is UniCredit and they had to raise cash recently. They've had a few banking scandals too.
Your best option would be to remortgage your home here and get the money to buy the Italian property.
Houses definitely over here can be a lot cheaper. Obviously at the bottom end of the market there is a lot of rundown properties in the middle of nowhere in towns with declining populations. Even in the North or in desireable areas, it's surprising what you can get for $150k AUD.
We have the pleasure of 600k per annum of people who can to come here to experience the higher COL or make their dreams / nightmare.
We also have high cost to build (not just cost of planning / doing plans) simply because we still put expensive muscle on site to do low value stuff.
Toyota Japan makes prefab houses like 12 different styles with 60 year warranties and earth quake proof for like AU$300k, put up in 45 days.
Just remember to keep all receipts on all expenses relating to the property.
It can be used to reduce the capital gains when you sell it in future.
There’s a few short term lenders based on Lygon St in Melbourne that can help and they are very familiar with Italy as a matter of fact
I'm sure they will make me an offer that I can't refuse!
Not sure how they track against the base interest rate….
You could probably do it with your Super if you went full SMSF.
Absolutely not…
You cannot use a house you purchase in your SMSF
You'd have it rented out on air'bnb or whatever and book it through a shell. Not rocket science.
You're not being scammed are you, some kind of time share thing?
No, despite appearances this is not the case. I spend a lot of time here during the year and normally I stay in Hotels or AirBNB.
Since property prices here are so reasonably priced, the economics makes sense to buy something.
I will buy the house through a local immobiliare (real estate) and a trusted local friend here is a lawyer.
you can also negative gear the house. . keep all receipt and claim it on tax
In what country is the property located as that my be a factor.