Arranging a mortgage while living overseas might seem like a daunting task, but for New Zealand permanent residents and citizens, it's actually quite straightforward. In this blog post, we'll walk you through the key steps and considerations for obtaining a mortgage from abroad.
1. Know Your Status:
The first step is to determine your residency status. As a New Zealand permanent resident or citizen, you have a clear pathway to securing a mortgage while living overseas. This eligibility is a significant advantage. If you are unsure on your status, New Zealand Immigration has a great tool to help you determine if you can buy or build in NZ - https://www.live-work.immigration.govt.nz/live-in-new-zealand/housing/buying-or-building
2. Understand Lending Rules:
Lending rules can vary among banks and lenders, especially when it comes to overseas income. Some banks may apply a 'haircut', reducing your overseas income by a certain percentage when calculating your borrowing capacity. For example, if you earn $150,000 NZD overseas, a bank might consider it as $120,000 NZD (a 20% reduction). Others may have a higher haircut rate, up to 30%. However, some non-bank lenders do not apply any haircut, making them a valuable option for overseas borrowers.
3. Explore Lender Options:
There's a wide range of lenders to choose from, including many Australian lenders who are familiar with overseas borrowers. These lenders often have more flexible policies, making it easier for Kiwis living abroad to secure a mortgage. Additionally, some lenders have specific rules for different types of properties, such as older properties or brand new homes.
4. Income is Key:
The most critical factor in obtaining a mortgage while overseas is your income. Lenders prioritize stable and substantial income sources. The stronger and more stable your income, the easier it is to qualify for a loan. This is particularly true for investment properties, where rental income plays a crucial role in the lending decision.
5. Consider New Builds:
If you're looking to make the process even smoother, consider purchasing a brand new home or a property currently under construction. These properties often fall outside the Reserve Bank's lending restrictions, making it more straightforward to secure financing.
Securing a mortgage while living overseas as a Kiwi is entirely feasible, thanks to your New Zealand permanent residency or citizenship. By understanding lending rules, exploring different lender options, and having a stable income source, you can confidently navigate the mortgage application process, whether you're purchasing an investment property or a new home in New Zealand.
Remember that mortgage regulations can change, so it's always a good idea to consult with a mortgage adviser who specializes in overseas applications to stay up-to-date with the latest requirements and options. At NZ Mortgages, we have the expertise to assist you in securing the right mortgage, even when you're on the other side of the world.
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