Applying for a Mortgage from Abroad
When it comes to applying for a mortgage, most people will aim to do so from the country that they are currently residing in. If you live in Sydney, Melbourne, or Queensland applying from anywhere in Australia can be a suitable option – especially as most banks and lending agencies will operate on a national scale, with facilities scattered around the country.
But what about those that are intending to move to the land down under and want to apply to a local bank in this country in particular?
Well, this might sound a little more complicated, but thanks to the simple way in which banks are able to offer their services – you could take care of the entire process via phone and email, with any documents that need to be signed being delivered digitally, or at least via post. There is one thing that you’ll need to consider above all else however, and that’s the change in currency that you will be expected to cater to.
Currency Conversions When Buying a Home
If you’re buying a property in Australia, then it’s important to note that this country uses its own currency; the Australian Dollar. Unfortunately, as with all forms of currency, AUD is prone to fluctuations in conversion rates and this is where using free mortgage calculator tools can come in handy.
These digital resources are a great way to calculate the total cost of a mortgage and when paired with currency conversion tools, you’ll be a step closer to understanding how your own finances translate as far as the Aussie property market is concerned. Whatever bank you go with your payment will end up being made in AUD – and this means that you might want to wait until conversion rates are at their most appealing.
Where Does a Calculator Come into Things?
The great thing about an online loan calculator is that they can be used to work out exactly what you will be expected to repay – in the local currency. Although a bank will be providing you with a lump sum, minus your deposit of course, you won’t be expected to pay that amount back in one go – or even in just a few instalments.
A repayment plan can take years (if not decades) to complete and the longer the duration of the schedule, the less you will be expected to pay back every month. Using a mortgage calculation tool to work out the minimum, or maximum, that you will be expected to pay can be hugely beneficial; even if you simply want to buy a house to rent out, whilst earning in your own local currency.
Consider an applicant from the United Kingdom for example. It’s safe to assume that their main income will be in GBP (Great British Pounds). If they wanted to buy a home in Australia, they’d need to have their cash converted into AUD when making payments. When applying to a bank that’s local to them, they will take care of the conversions there and then, and will usually request monthly payments to cover the cost of the loan in GBP.
When applying to an international bank however, particularly one in the land down under – the GBP will need to be converted to AUD for every payment. This is where things can get a little complicated and it’s also one of the main reasons why people choose to move to the country in question, open a bank account and then receive payments directly into it.
How to Simplify Repayments
If you’re in the middle of a move, then the chances are that you will already have considered establishing a new account in the country that you are planning to relocate to. If you have found another job, then you’ll want to be sure that your cash is either received in your national currency – or that of the country that you are moving to.
For example if you made £2,000 GBP per month, this would loosely convert to $3,300 AUD. You’ll then have the choice of having this cash converted into AUD automatically whenever you get paid, or you can instruct your lender to simply extract the right amount of GBP from your bank account to cover the cost of your monthly repayments, whether the currency rates fluctuate or not.
In the worst case, you might be expected to repay £10-£50 extra per month, but considering that you will still be able to receive payments in your national currency, whilst having access to both your local and international bank accounts – you will be in a better position to ensure that you never miss a payment.
You could go even further by setting up a standing order every month, regardless of which bank you decide to go for, and where they might be located.
In summary, you will have two options:
Option One – you could consider using your own local bank to apply for a mortgage and set up a standing order in your own currency. In this event, you will have to cater to fluctuations in currency conversions.
Option Two – you could instead open a bank account with a lender in the country that you are planning on moving to. You will still be able to set up a standing order, but you won’t have to worry about converting your cash into AUD. Once a set price has been agreed upon for repayments each month, the only thing that you will need to keep an eye on is the fluctuation of interest rates – unless you apply for a fixed rate mortgage of course.