If you’re an overseas investor (or an expat) looking to buy an Australian investment property, proving your foreign income is crucial for your loan application approval. Your income is one of the major considerations for a lender when they assess your borrowing ability in Australia.
A lender will evaluate your regular income against your regular living expenses (including your repayment commitments for any existing debt that you may have) as part of your loan application. They will determine whether you meet their lending criteria and can afford to make your investment property loan repayments.
Your income documentation
The policies of different lenders vary, but in general the type of income documentation you need to provide can include any of the following:
- A letter from your employer verifying the status of your employment (ideally, full-time).
- A copy of your employment contract.
- A letter from your accountant if you are self-employed, verifying your business’ financial statements and demonstrating your net income. Your net income is your income after tax. This is the income that Australian lenders use to assess your loan application.
- At least three payslips that show your net income. This should include your base salary/wage, along with any regular overtime payments, bonuses, commissions or allowances that you may receive. However, be aware that most lenders will discount the amount of any additional income you may receive if it’s not proven to be guaranteed or regular. This is because the Australian Prudential Regulation Authority has imposed tighter mortgage lending restrictions to limit speculation in the investment property market.
- Your bank statements for the last three months showing your salary being deposited into your account.
- Your tax return for the past two years (and if you are self-employed, your company tax returns are required too).
In addition to the above income documentation, you will also need to provide:
- Loan statements for any liabilities you may have in your home country and Australia.
- Your credit card statements.
Ideally, all your documentation should be in English. If your original documents are not in English, you should have them translated by a professional organization such as the National Accreditation Authority for Translators and Interpreters (NAATI). They will be able to provide an accompanying interpreter’s certificate that verifies the accuracy of the translation. If necessary, we can arrange this service for you at FindAHomeLoan.
Can I include my partner’s income?
That depends on the lender’s policy.
If they do, it may improve your borrowing power. But your partner would need to provide the same documentation proof that we’ve outlined above.
You will have more chance of a lender being prepared to accept your partner’s income if you can show additional documentation that proves:
- Your partner has family ties to Australia or is an Australian citizen.
- You and your partner are married or have been in a de facto relationship for at least two years.
- You and your partner have children together.
How we can help
Whether you’re looking for a new loan or to refinance an Australian property, we can provide detailed advice and assistance to help you gain approval for your application. We’ll take the time to understand your circumstances and provide the best Australian mortgage advice.
Contact us now to find out how we can help you!