New Zealand citizens living abroad and looking to buy property in their home country face a unique set of challenges. Below we highlight key considerations for overseas buyers planning their return or investing from afar.
Key Considerations
Income Scaling: Banks will assess your income based on the region where you're earning and scale it accordingly. Your earnings will be converted to New Zealand dollars and may be reduced by up to 20% before conversion.
Expenses and Debt: Expect banks to evaluate your existing financial obligations in the country where you're currently residing. This includes translating foreign bank statements if they are not in English.
Loan-to-Value Ratios: If you're not immediately living in the property, you will need 35% equity. However, if the property will be your residence, you may qualify with just 20% equity.
Unique Strategies
Buying from Family: Purchasing family homes as parents downsize can secure property for future use and potentially at a lower price or with instant equity in it.
Flatmates or Boarders: If you are buying the property for yourself but you won't be in in the property for much of the time, renting rooms while you're overseas offers income while keeping the home available for your visits.
Navigating the home-buying process requires careful planning, especially with foreign financial complexities involved. Early preparation, finding a reliable mortgage advisor and solicitor in New Zealand are essential. For tailored advice on returning home or investing, reach out to My Mortgage.