How Prakash Rai Bought A House On A Temporary Visa (And You Can Too)
08 Aug, 2024
Updated: 08 Aug, 2024
Buying a home in Australia can be tough, especially if you’re on a temporary visa. One of our brokers, Prakash Rai, faced this obstacle head-on and found a way to make it happen. His story shows that with the right help, it’s possible to achieve your Australian dream.
Initial Considerations and Planning
What motivated you to purchase a property in Australia as a temporary resident?
I was paying almost $2000 in rent each month. When I learned that getting permanent residency through the 491 (skilled work regional) visa route would take 5-6 years, I started to worry. The thought of paying rent for that duration and seeing property prices rise over the years made me realise that buying now would be a wiser choice.
How did you prepare for the process, and what initial steps did you take?
My visa is a 408 (temporary activity visa), which lenders don’t typically accept, so I knew it would be challenging. We had to go with a smaller lender and a higher interest rate. However, our experience in the industry and ability to demonstrate commitment helped. They made an exception for us and approved the loan, thanks to our credibility as brokers.
Your property is in East Gosford. Why did you choose that location?
East Gosford was the perfect choice for me. It offers excellent capital growth and is close to amenities, transport, and nature, including a national park and a beautiful beach. Despite being in regional NSW, it’s one of the nearest locations to Sydney, making it highly convenient. The area met all my needs and felt just right. Plus, the bedroom has a water view, which made me fall in love with the place.
Image: Praskah Rai’s property in East Gosford.
Foreign Investment Review Board (FIRB) Process
Can you describe your experience with the FIRB application process?
The FIRB application was expensive – $42,800, especially after the April 9, 2024, changes. The website stated that the turnaround time was a month, but the instructions were confusing. I am thankful that my case owner was very supportive, contacted me directly, and got my approval in just four days.
Were there any specific challenges or unexpected hurdles during the FIRB approval process?
The website was challenging to navigate, with unclear instructions and outdated fees. It was also hard to reach a case owner, which added to the stress.
How long did it take to receive FIRB approval, and were there any delays?
Luckily, I received approval in 4-5 days, which was a huge relief.
Financial And Mortgage Arrangements
What were the key financial considerations you had to account for as a temporary resident?
The property cost $905,000, requiring a substantial deposit – 20% plus full stamp duty (no discounts) and fees for the foreign buyer and FIRB approval. It was a huge financial commitment.
How did you secure a mortgage, and were there any specific requirements or challenges from lenders?
Only two lenders agreed to give me a mortgage, and it came with a high interest rate of 7.46% and a large deposit requirement. It was a tough process.
Stamp Duty And Additional Costs
How did the stamp-duty requirements affect your budget and planning?
I had to pay $35,460 in stamp duty, compared with $20,860 for first-home buyers, plus $72,400 for the foreign buyer surcharge, and $42,800 for FIRB approval. The total deposit requirement was around $340K.
How did you plan for and manage additional taxes or costs?
I took a personal loan to cover part of the deposit. It was a necessary step to make everything work.
Overall Experience And Advice
Reflecting on the entire process, what were the big challenges you faced?
The biggest challenges were conducting a long-term cost-benefit analysis, defining objectives, understanding the type of security, and assessing personal investment experience and plans. It was a complex journey.
Is there any advice you would offer to other temporary residents considering purchasing property in Australia?
I would advise them to talk with a broker and conduct a thorough cost-benefit analysis based on their current situation and future goals. Being well prepared is essential.
If you could change any part of your journey, what would it be and why?
At this moment, I’m not sure. The experience was enlightening and rewarding.
We’re Here For You
With years of experience helping temporary residents, we understand your hopes and dreams. Let us be your partner in achieving your Australian lifestyle. We’ll guide you with care and expertise in finding the perfect home loan to match your needs.
Call us on 1300 889 743 or enquire online free for more information. Your future home is just a call away.
