Three siblings based in different countries - Malaysia, Singapore, and China - collaborated as joint borrowers to secure a mortgage for their second investment property in Australia.
The greatest challenge at the start of the loan application was that there were three applicants, all siblings, who were based in various countries seeking finance for their second investment property in Australia. This poses an issue when borrowers intended to use a mixed basket of currencies from various countries namely the Chinese Yuan, Singapore Dollar and Malaysian Ringgit to service loan repayments and access borrowing capacity.
One of the borrowers initially tried to obtain finance from a major Malaysian bank directly under the assumption that his high net worth status and existing relationship with the bank could help him secure a loan locally. Unfortunately, his application was turned away due to the complexity of his financials coupled with the fact that he was looking for a foreign currency loan with a construction component.
Originally, we assessed the joint incomes and liabilities of all three applicants as provided by our clients. However, after a thorough examination of the borrowers' collective financial information, which included consideration of their living expenses, tax jurisdictions across different countries, and exposure to currency risks, we advised our clients against including the third borrower’s financials based in China.
This is because the income of the two other applicants, who were based in Singapore (salaried employee) and Malaysia (self-employed), was ample to secure their desired loan capacity and meet their objectives as a family. Our decision not to request the third borrower's financial documents simplified the loan application process for the lender by reducing the number of supporting documents required.
Moreover, it allowed the third borrower's income profile to be available for future investment opportunities, which could benefit all three investors in the long run.
Our clients expressed their satisfaction with our ability to assist them, as they had previously faced difficulties securing a loan due to their complicated financial situation involving multiple jurisdictions. They had lost hope of acquiring their second residential property in Australia, which was a vital aspect of their plan to expand their overseas investment portfolio.
Nevertheless, our involvement enabled them to achieve their goal, which in turn gave them the confidence to further broaden their investment footprint in Australia by purchasing additional properties from the same developer.
The clients were more than satisfied with our options presented and how we were able to assist them in navigating credit requirements put forth by the lender, and as a result, we were able to secure their business. The property has since completed construction and purchasers are currently earning a competitive rental income from the property and are using this income to comfortably meet their loan instalments.
.svg)