Buying a House – Documents To Provide

You will need to provide supporting documents to your lender when you apply for your loan. This will usually require an in-depth meeting and you should be prepared with all supporting documents that will demonstrate to your lender that you will prove to be a reliable and safe customer to loan a large amount of money to.

Some examples of documents you might need to provide include:

Pay Slips & Tax Returns

Proof of all your earnings should be included with your application, as well as your latest Australian Tax Office (ATO) Tax Return if you have one. Payslips provide essential information to the banks about your current income situation and must be dated less than four weeks from the date of application. They will need to show your full employee and employer details as well as show your taxable income and net income. Lenders also have their own set minimum amount of time they like to see you have worked with the same employer which is usually three months but can be up to six months. If you are planning to apply for a home loan in the future you should try and stick with the same employer in the months or year(s) leading up to your application. Once you have been approved for your loan you can change jobs and do not need to inform the lender.

Bank Statements and Transaction History For Three Months (or whatever period your lender requires)Accordion Item

When you apply for a home loan the bank will need to see bank statements and transaction histories for all your accounts. This is usually where most people can get into trouble as all your transactions will be scrutinised to determine if you are financially responsible and if you have any lifestyle habits that might affect your reliability.

If you have any spending habits that might appear to be unfavourable to a lender, such as a regular betting habit or money being transferred from one account to another to cover an overdrawn amount, you should clear these up in the months prior to applying for a mortgage. Consider making cash payments to some places if necessary and provide supporting documents like receipts if you’ve taken out a large amount of cash for something like a couch or television. Even better, try not to make any unusual, large or one-off purchases during the period of time that you need to provide bank statements and transaction histories for. Do your best to show your bank you live a financially routine life!

Loan or Credit Statements

If you have a loan, credit card or store card or any other debt that you are paying for such as finance for a car or boat, you will need to provide statements for each. The statements will need to show that you are regularly paying for them and that you are not in default.

All loan and credit accounts will count as expenses and you should therefore consider paying off as many as you can and closing the accounts before applying for a mortgage.

Rental Reference Letter and/or Rent Ledger

These are supporting documents that confirm how much you pay in rent and they demonstrate your ability to save money. You can show it to lenders as proof that you’ve been paying rent regularly and on time.. Most lenders will only accept these documents from a Property Manager or Real Estate Agency and not from a landlord.

Original Identity Documents

These would include your New Zealand passport, Australian Drivers Licence, Medicare Card, Marriage Certificates, Bank and Credit Cards. You will need to provide original documents and your lender will copy them on the spot so you can take the originals home with you. Copies will not be accepted.

An Accountants Letter

A letter from your accountant will help clarify any issues that may warrant further explanation and can often allow lenders to bend their guidelines to accept home loans that they would otherwise automatically decline.

A Default Explanation For A Loan

Australian lenders are usually pretty hesitant to lend to anyone who has problems with their credit history. Lenders might consider approving a home loan for someone who has had a credit issue provided that there’s a good explanation.

Gift Letter

If your parents or someone else are willing to give you the money for a deposit then you will need to provide a statutory declaration from them saying as much. Lenders need to confirm the source of a borrower’s deposit to make sure that they are not borrowing the deposit off credit cards or a personal loan.

Savings History

Banks do not consider a gift to be the same as a deposit that you have saved yourself. This is because a saved deposit is excellent evidence that you are financially responsible. If you can show a history of saving money, no matter how small the amount, you should absolutely include that as part of your supporting documents. Lenders love seeing a reliable, steady saver. In lieu of providing a regular savings history some lenders might consider a proven rental history of 12 months or more.

Buying a House – Your Credit File

Your credit file will be accessed in order to assess your application for a home loan. Both your Australian and New Zealand credit files will be checked. If you have any debts, both in Australia and New Zealand, there is a good chance that your lender will find out about them. You should obtain both your VEDA Advantage Australia and VEDA Advantage New Zealand credit files prior to applying for a home loan if you are unsure of your credit standing.

Every time a lender accesses your credit file it affects your rating so don’t keep applying for loans if you are denied one or apply for multiple loans at the same time. If you are using a mortgage broker ensure that they DO NOT apply to multiple lenders at the same time. If you are denied the loan from one lender you should look at your loan application and consider what information contained in it might be affecting your ability to borrow. Sometimes it can just be a matter of waiting a few weeks. The banks and mortgage insurers are very wary if there are black marks or too many credit enquiries on your credit file.

Buying a House- Choosing a Lender?

Before you look choosing a lender that has the most competitive interest rates, you need to consider which ones will be more likely to approve your mortgage. There isn’t much point in applying if you’re only going to have your application declined and damage your credit file. Some Australian banks view New Zealand citizens more favourably because our governments have joint agreements for trade, residency and legal purposes.

In addition to this, our countries share the same credit reporting system known as VedaScore via Veda Advantage. For these reasons several banks see NZ citizens as low risk borrowers. You should conduct your own research on the best mortgage deals available and should consider using a registered Mortgage Broker to find you the best lenders as they will have a good understanding of which banks are easier to borrow money from if you’re a New Zealander living in Australia.

Buying a House – First Home Owners Grant (FHOG)

The Australian government’s First Home Owners Grant (FHOG) and other benefits are available for permanent residents, just as if they were Australian citizens. The Australian Department of Immigration automatically grants New Zealanders living in Australia a Special Category Visa (SCV). Because New Zealand citizens are considered to be permanent residents of Australia, they are eligible for the grant.

You should refer to your mortgage broker or research yourself for information about which benefits are available in your state.

Buying a House – How Much Can I Borrow?

One of the biggest questions when buying a home is how much can I borrow? Most lenders require a minimum of 10% deposit to buy a home but some do offer less. In most cases you will get the same interest rates as Australian citizens, even if you are borrowing 95% of the property value. There are some brilliant loans available. Some, like Keystart in Western Australia, offer mortgages for renters with as little as 2% deposit and no LMI.

Buying A House in Australia

Yes – Kiwis living in Australia can absolutely purchase a house here!

As a New Zealand citizen you are allowed to live and work in Australia permanently, which has the same effect for the purposes for working and buying a house in Australia. Your loan can be used for any kind of residential housing. This includes both a home to live in and an investment property in Australia. New Zealand citizens living in Australia can borrow up to 95% of the value of a property plus Lenders Mortgage Insurance (LMI).

Advantages of Renting in Australia

FlexibilityYou can choose who you want to share accommodation with, where you live and can easily move at the end of the lease without major cost.
Right LocationAccommodation in your preferred location (proximity to school, work, etc).
Rights As TenantsYou have rights and protections guaranteed to you by a tenancy agreement and the advice and protection of your state’s Tenancy Board.
Cost Free MaintenanceYou are not responsible for repairs to the property that you didn’t cause

Disadvantages of Renting in Australia

Short StaysNot suitable for shorter time periods. Leases of less than 6 months are almost impossible to find.
High Initial CostYou need to pay four weeks bond plus 2-4 weeks rent in advance, just to secure the property.
Complex TaskRenting and signing leases is a complex and lengthy task. As a tenant you will need to have a good understanding of English to navigate all the forms.
Shortage of Rental PropertiesSuitable rental properties can be hard to find from time to time so competition can be fierce.
High Cost of RentDepending on the market and the supply of rental properties at the time the price to rent a property can be substantial and account for more than half a weekly wage.
Extra CostsThe amount of the lease generally does not include energy consumption (electricity, water, gas)

Renting in Australia – Tips To Help You Secure A Lease

The rental market in Australia can be savage – we’ve compiled some tips and tricks to help you start renting in Australia!

  • Dress well. Look and act the part of a clean and neat tenant.
  • Attach all documents that will make you look like a good, upstanding citizen. If you’re a volunteer for a charity, include it!
  • Try to be as neat and legible as possible on your rental application forms. Remember, this goes directly to the landlord and they make the ultimate decision. Neat handwriting on a form may not necessarily mean you’re a neat and tidy tenant but it sure looks better when compared to a scribbled application!
  • Consider writing a short letter about yourself that describes your love of gardening and of keeping a neat house. Include a photograph of your family if you want to.
  • If you can, offering to pay several months rent in advance can help to push your application to the top of the pile when there are a large number of applicants for a property.
  • There have been times where competition for rental properties has been so high that potential tenants have offered to pay more rent for properties in order to secure the lease. This is only advisable if you can truly afford to and only if you’ve not had previous success because of high competition.

Renting in Australia

How It Works

The Property Manager will hand over the rental applications to the landlord for them to make the final decision as to who lives in their property. If the Property Manager has anything to note about you it will be at this stage they can see their observations, so dress nicely, act professionally and be courteous when you meet the Property Manager.

Credit history checks will be done and your name entered into one of the national tenancy databases to ascertain if you have been blacklisted before. The credit checks will check only your Australian Credit History. They can be state or Australia-Wide checks, depending on the Real Estate Agency. Subscription to credit checking services is costly. Smaller, boutique agencies will not have the credit-checking abilities of a national Real Estate Agency chain. Bare that in mind if you are unsure of your credit rating.

Provide photocopies ONLY! Don’t ever provide original documents as you will not receive them back.

Renting in Australia- Rent Increases

The rent is likely to be increased over time so consider renting something that isn’t at the top end of you spending level. Each state has its own laws as how often and how much rent can be increased by but it is inevitable that the rent will go up.

Renting in Australia – House Maintenance & Alterations

In Australia the tenant is not responsible for paying to fix most problems within the property such as a faulty oven or leaking toilet cistern, but small things like changing light bulbs and fitting new tap washers are the responsibility of the tenant.

You cannot make any alterations or additions to the property without the prior written consent of the owner of the property. This means if you want to paint a room a different colour you need to first contact your Property Manager and they will ask the owners of the property.

Renting Upfront Costs

Initial upfront costs will be your Bond PLUS two weeks rent. Rent is paid in advance, more commonly every two weeks, but it can be four weeks in some circumstances. If your rent is $400 per week, your initial upfront costs will likely be $1600 (Bond) plus two weeks rent in advance of $800. That’s $2400 just to secure the house!

Renting in Australia – Ending A Lease

When you end a lease the agent will inspect the property and compare the current condition against the Condition Report you returned to them after signing the lease. That is why it is essential that you make note of any initial damage not already mentioned in the Condition Report and return it to the agency when you first sign the lease and move in.

Renting in Australia – Paying A Bond

A Bond is a compulsory amount of money that is paid and held by the state’s Tenancy Board and is to provide some security to the landlord should a tenant damage the property or stop paying rent. A Bond is four weeks rent and some states also allow Pet Bonds which is a set amount on top of the standard bond. For example, if your weekly rent is $400, your Bond will be 4 x $400 = $1600. If your state also allows a pet bond of say, $100, then your bond will be $1700. Your bond is fully refundable if you leave the property in good order and without damage, however pet bonds may be non-refundable and used for fumigation purposes. The cost of any repairs needed is taken out of the bond and the balance is refunded directly to you by the Tenancy Board in that state

Renting in Australia – Condition Report

When you do secure a rental property, ensure that you thoroughly go through the Condition Report for the property after signing the lease. Mark down any discrepancies on the form right down to the last detail – marks on walls, holes in flyscreens and stains on carpets. Take photos. Video everything. You only have a limited amount of time to send the revised Condition Report back to the Real Estate Agency and it also coincides with a very busy time (moving house) so it’s important you make this a priority.

Renting in Australia – Pets & Your Rental

In Australia you cannot legally have a pet in a rented property without the written consent of the owner, given through the real estate agency. Properties that will allow pets will usually advertise them as such, with words like “Pet Friendly” or “Outside dogs considered”. A property that is advertised as “No Pets” will not usually negotiate on the subject so if you have a pet you should probably not waste your time and just look elsewhere.

Renting in Australia – Important Information

  • Some Real Estate Agencies require a deposit to be paid with your rental application. This is refundable should your application be unsuccessful, however in the meantime you’re without the money so you will need to allow for this in case you apply for a few properties at the same time.
  • Leases in Australia are generally 6 or 12 months long. Shorter leases do come around every now and again but they are rare. You are legally responsible for paying the lease for the entire period of tenancy even if you vacate so be careful when signing long leases and only do so if you are absolutely certain that your circumstances and needs won’t change.

Renting in Australia – Leasing Necessary Documents

Important documents needed to obtain a lease:

  • ID documents such as your passport, drivers license etc.
  • A letter of offer of employment from an employer in your new city or pay slips from your current employer. If you’re a contractor you’ll need to find another way to prove that you can pay the rent. This might mean showing your contract with clients of providing statements from your business account.
  • List of past addresses. Some rental applications require a list of a few previous landlords, if you have them.
  • Most recent tax return. Some applications require a copy of your most recent tax return. A tax return may be a replacement for employment records or if you’re unemployed, the return will show how much you earned in the previous year and whether you’ll be able to cover the rent.
  • Banking information. It might be useful to include bank statements showing you have regular income or perhaps already have funds to cover the rent. If you do provide bank statements be sure to protect your privacy and black out private information such as account numbers and private transactions.
  • Ask your current and previous landlords to provide you with a letter of reference stating that you were good, tidy tenants and prompt payers of your rent. Get references for your pets too! You need to provide a new landlord with proof that you’re a responsible pet owner and that your dog won’t destroy their backyard.
  • Anything that you think might be useful in proving you are of good character such as references, certificates and awards.

Renting in Australia – Considerations

Consider your needs when deciding whether to rent a house with a garden or a small apartment with only a balcony. Moving house is hard work and can be quite expensive so you don’t want to have to move again too soon just because you didn’t consider your child would eventually need a backyard that can fit a trampoline! Try and get it right first time around- do your research before you start looking. Where do you want to live? Near a park, a beach, close to work or near the airport? Do you need a garden? How long will it take you to get to work? Are you close to a train station or bus stop? Is there a school nearby for your children? Is the local park dog-friendly? How far away are the shops? What is the climate like? Do you need heating and air conditioning? Basically, work out what you cannot live without, what you need to have close by, what type of accommodation you require, and go from there.

Once you’ve narrowed down your search by location and housing needs, start searching! Looking on the internet is the most common and effective way to see up to date information, but you can also go to local real estate agencies in the area you want to live and enquire with them directly about their rental properties. Often, if a property is vacant, they can provide you with a key to inspect the property on the spot.

Renting in Australia – Before You Arrive in Oz

Prior to departing New Zealand, it is highly recommended that you arrange and book some type of accommodation for a minimum of four weeks. You will need to allow enough time for you to find employment, acquire a bank account, source a mode of transport and be successful in gaining a residential lease – four weeks won’t allow you any time to waste. Depending on the rental market at the time, you might be able to apply for rental properties from New Zealand before you leave, however you will need to have a friend who is able to physically visit the property on your behalf. If you plan to look for accommodation when you arrive, consider staying in a holiday apartment or house as they can be cheaper than staying in motels and are also a good way of determining if you like and want to live in an area.

Renting in Australia – Making A Good Impression

It’s extremely important that you make a good first impression with the real estate agency and Property Manager. There are sometimes only a handful of real estate agencies in each area so you don’t want to get off on the wrong foot with one of them. They might have 50 rental properties on their books and that’s a lot of houses you might not be successful in applying for if you’ve not put your best foot forward! Dress nicely and be polite. You want to look like people who take good care of themselves and will therefore take good care of a rental property.

Renting in Australia

Most rental accommodation in Australia is rented through a Real Estate Agency. The Real Estate Agency does not own the property but acts on behalf of the owner by employing a manager of the property, called a Property Manager, to organise the new tenants, ensure all the paperwork and legal documents are taken care of, arrange regular property inspections and organise for any problems with the property to be fixed. The Property Manager lists the property for rent (on the internet in most cases), and those interested in viewing the property should make contact with the Property Manager to arrange an inspection. You should also ask for the application paperwork before attending an inspection as during busy times properties can be leased quite quickly and you will need to hand your completed forms to the Property Manger as soon as you have inspected the property and decided that you want to apply for it.

Remember, when you rent in Australia you will most likely be dealing with a Property Manager at a Real Estate Agency, not the landlord themselves. You will usually never have direct contact with the landlord so maintaining a good relationship with your Property Manager is important.

Arranging for a rental in Australia is relatively complex matter and it can take some time to a find suitable place so do as much research as you can to narrow down your search criteria prior to arriving.