Permanent Resident Home Loan: Can a Permanent Resident Get a Home Loan When Living Overseas?

Foreign Citizens who hold permanent resident visas are treated by Australian Banks as Australian citizens when they are living in Australia. That is, they can borrow up to 95% LVR (ie, with just a 5% deposit) with the same credit criteria that applies to their Australian counterparts.

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Permanent Residents are entitled to the First Home Owners Grant, stamp duty concessions and any other state benefits available providing they otherwise qualify.

The story is not the same if the permanent resident visa holder is living and working overseas. In this instance, most banks treat these applicants as non resident foreign citizens and will restrict lending altogether or require larger deposits. As a general rule applicants who are not Australian citizens and who are living abroad will be restricted to 80% LVR and will require a 20% deposit plus purchase costs Ki Residences.

There are three exceptions to this rule:

1) The permanent resident is purchasing with an Australian. In this instance, the property and home loan can go in both names and an LVR to 90% and possibly 95% is available. However, its important to note that only the income from the Australian Citizen will be considered when determining borrowing capacity. That is, when borrowing over 80% LVR, any income from a foreign citizen living abroad will be disregarded. Therefore, if the Australian Citizen is on home duties and the Foreign Citizen is earning the income, a home loan will not be available as income from the foreign citizen will be disregarded. If the situation was reversed and it was the foreign citizen doing home duties and the Australian Citizen was earning the income, this would be acceptable;

2) One of the applicants is residing in Australia. Ie, if one applicant was living abroad purchasing a property in joint names with a joint applicant who is living in Australia, then an LVR of greater than 80% is achievable providing the Australian resident is holds permanent residency or Australian citizenship.

3) As of April 2011 some lenders have relaxed slightly on this strict policy understanding that it is unfair to treat permanent residents living abroad any different than Australian citizens living overseas. Criteria is very strict though with the requirement for genuine savings and a positive asset position.

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