Hello Property Investing Com,
I need advice and guidance to questions I am considering.
My circumstances: Working in China since 1997.
Am 52 yrs old Australian Expat, married one child, my wife is Chinese and our 10 year old daughter is Australian citizen as well. Have been employed with same employer for almost 7 yrs now, in China. Take home income is AUD4750/month paid in Chinese currency. We have two properties here in China our PPOR is valued at 2.61m RMB = AUD409,000 (mortgage balance AUD61,720), Second property is small unit owned outright and has a small rental return.
Note that in China all property is leasehold with title, and not like Australia. I have no other debt cars I paid cash for.
Here is my objective; We want to buy a 2 bedroom apartment either south east Queensland or Northern NSW on the coast.
This will be used initially as rental, then in 2-4 years my wife and daughter will live there, so my daughter can go to school.
What options do you see for me in raising finance.
I have AUD25,000 cash in bank to use as deposit.
1/ Will Australian bank loan for my purchase?
2/ Although we will use the apartment in the coming years, I want to do an interest only loan to begin with 5-10 yr term, is this possible.
3./ If the answer to either 1 or 2 is no, can you share with me the options available to us.
Thank you
Michael
Aussie bank will lend.
IO possible
You will need to come up with a deposit or borrow in china against the chinese properties.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Thank you Terry.
Which Australian Bank would you suggest I try first or do you think it's better to go here in China first?
Regards,
Michael
Have you considered investing directly in a development project. I try to create opportunities that benefit everyone involved. The problem is that most people pay full retail and if the market is flat it will take a while for capital growth to kick. There for if you develop property it is the most effective way of making money or buying property at a wholesale price.
Nigel Kibel | Property Know How
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Hello Nigel
It is not something I had considered!
If you have something that I could consider I would appreciate it.
What if any title would I have?
Regards,
Michael
MyRoom wrote:Thank you Terry.Which Australian Bank would you suggest I try first or do you think it's better to go here in China first?
Regards,
Michael
Nihao Michael
Don't think a Chinese bank would lend for Australian property, but you may be able to check out an aussie bank in China such as NAB etc.
Or speak to a broker.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Xie Xie 谢谢 Terry.
A few questions so I will try to answer them as best as possible.
1) An Australian bank should be able to loan you the money as long as you have been claiming your income. You usually need to prove (at a taxation level) how much income you earned. If you're not declaring income this will be difficult.
2) Interest Only loans are definitely possible. People do them for their place of residence all the time. I haven't seen many interest only loans with a greater than 5 year term though. I think you have to renew after 5 years and get another interest only loan.
3) Borrowing money against your Chinese places would give you cash to be able to invest in the Australian market. You could always look for a low-doc loan if you have a large percentage of the deposit.
NOTE: I am not a financial advisor nor mortgage broker. Probably best to speak to a mortgage broker as they will be able to tell you straight away what your best options are.
Ryan McLean
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Ryan McLean | On Property
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Email MeDeclaring your income?
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
I have heard of people working overseas for cash…
Ryan McLean | On Property
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Email MeAustralian banks will consider, but you really need a 20% deposit for your situation as you have been an ex-pat for a considerable length of time and the LMI will most likely reject the deal.
Regards
Michael
Mick C | Shape Home Loans
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ryan mclean wrote:I have heard of people working overseas for cash…Seriously? only joking. I was pointing out a mistake in your English "been claiming your income".
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Thank you
Hi Michael Chan, What is LMI?
Excuse my ignorance.
Thank you.
I have given this all some further thought and now can see that with the Australian dollar so high that it would not be in ones best interest to borrow Chinese Yuan to fund the purchase. I expect the Aust., dollar to fall in the medium term.
Once the Australian dollar returns to more historical norm levels, (at least back to USD.0.80) if I had borrowed CNY then I've lost the benefit of the appreciating Chinese currency, actually it would all be working against me.
I can put together the 20% deposit – to secure financing in Australia.
Regards,
Michael
Lender Mortgage Insurance
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Thank you again Terry.MyRoom wrote:I expect the Aust., dollar to fall in the medium term.I wouldn't bet on it. The FED is on a mission to keep the dollar low to at least give their economy some chance of competitiveness.
Quote:Once the Australian dollar returns to more historical norm levels, (at least back to USD.0.80) if I had borrowed CNY then I've lost the benefit of the appreciating Chinese currency, actually it would all be working against me.The CYN has been steadily appreciating against the dollar after they unpegged from the dollar back in mid 2010 but it's still heavily controlled. The AUD vs the CYN has been pretty steady of the last 10 years with the CYN loosing some value.
There's speculation the RBA may reduce interest rates here to put downward pressure on the AUD but my guess is any move will only have a temporary affect if at all.
If you buy anything here you want to make sure its at the very least neutrally geared. You do not want to be propping up an AU property with Chinese funny money
As Terry mentioned Lenders mortgage insurance.
Typically for a Chinese ex-pat loan over 5 years ( time over seas) with no set asset base in Australia, the lenders will GENERALLY:
1. Want to see tax returns – Written translation by a registered translating organization
2. You have to be working for a a recognized company, if not a global company.
3. Use standard living expense for servicing
4. Convert your income into Aus dollar at current exchange with a 15% discount + taxed according to Aus maragins/income
Regards
Michael
Mick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
Thank you again Terry.
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