Living and working overseas is a rite of passage for many Australians. Whether it’s the rainy streets of London or the bright lights of Bangkok, 18.7 million citizens left our shores in 2016 and over one million live outside Australia today. But when the time comes to make major life decisions like settling down and buying a house, it seems there’s no place like home. 75% return within two years of their intended ‘permanent’ departure and with increasing unrest around the world, these numbers are set to rise. If you’re returning from overseas, we look at what you may need to think about to secure a loan and make those major life decisions a reality.
Wave goodbye to your credit rating
When you move abroad your credit rating doesn’t move with you. Depending on the time you’ve been away, you may have little or no recent record of repaying credit in Australia and so your credit score will have reset itself.
As credit providers use the information in your credit report to work out whether you can a) afford a loan, and b) are likely to repay it, this low score automatically places you into a “non-standard borrower” category which could limit the number of lenders prepared to consider your application.
Soul seeker to job seeker
When you return, chances are you’re starting out with a new employer or perhaps you’re setting up your own business. This could make obtaining a mortgage a little trickier as some lenders rely on a stable employment history with a few years of steady or increasing income to determine how much you can borrow. It’s worth noting those with self-employed status will often need two years of recent tax records for their application.
All is not lost
The good news is, there are lenders who understand that having a low credit score doesn’t mean you can’t make your payments and may consider other options in your loan application. There are some lenders who might look more favourably on self-employed people and others who offer alternative types of loans altogether; it’s just a matter of knowing who to speak to. Aussie has mortgage brokers that are experienced in obtaining loans for Australians returning from overseas, self-employed or not.
The proof is in the pudding
Take some inspiration from our Little Aussie Stories. When Sid and Tanya’s well-travelled family of four returned to the beautiful Barossa from overseas, they struggled to find the right home loan so they could live in the Barossa and open their dream restaurant. That’s where Aussie Mortgage Broker, Dianne Fraser, stepped in to help. Dianne said: “Sid and Tanya’s situation was tricky due to the short time in which they had been self-employed. However, I knew I could use my knowledge and expertise to navigate the sometimes complex banking process that appeared to be in their way.” With Dianne’s guidance, Sid and Tanya were able to secure the loan they needed and the restaurant is now open for business. We recommend the passionfruit crème brulee!
It may be frustrating that while living in a global age, we can’t have global credit scores. This is due to the differences in data protection laws between countries and things aren’t looking to change anytime soon. However, there are a few steps you can take that can help while you are away. One is keeping active savings, cheque and credit accounts in Australia and making the minimum transactions required to keep them open until you return. Becoming a foreign account holder may also positively influence your application, but any credit you’ve built up abroad? It’s not coming home with you.
Getting your credit back on track
Whether or not you’re looking to buy straight away, you’ll still want to get your credit score back on track. So where do you start? Firstly, Aussie advises that you keep an eye on your credit and free sites like Credit Savvy make this easy. Checking your score regularly will help you monitor your progress and spot any errors on the way. Next, it’s time to demonstrate you can save money, pay your bills regularly, and avoid too many personal loans or credit applications. With a little due diligence, you could be back on track before you know it.
If you’ve returned home from abroad, you may need to be prepared for a few challenges when applying for a home loan. But don’t give up hope. Keep in mind that you may need to be a little bit patient. And that having an experienced professional by your side could make all the difference. Talk to an Aussie Broker who can show you how to get your credit check on track and set you on the right path for your next big adventure.