In our recent blogs we’ve explored some of the potential challenges, opportunities and exemptions available when obtaining a home loan. For most people there are some fairly standard guidelines including the requirements and options for first time buyers, self employed and solo applicants. In addition, the rules surrounding when additional fees and taxes are triggered and how they can be avoided are generally quite clear cut. However, home loans for doctors and other medical professionals operate slightly differently. Let’s take a look at what the key differences are and what specific benefits might be available if you are a doctor.
How Do Home Loans For Doctors and Other Specialist Professionals Differ?
For banks and lenders, when it comes to home loans it’s all about how much risk a potential borrower poses. As we’ve highlighted in a recent blog, a lot of banks won’t even consider approving a home loan until you have at least one to two years of financial records available, particularly if you’re self-employed or a contractor.
However, unique home finance borrowing arrangements exist for professionals and specialists such as medical professionals, nurses, lawyers, accountants and engineers. Lenders perceive these professionals as lower risk as they tend to be in the higher income brackets, have more financial stability and pose a lower risk of defaulting on their mortgage.
Deposit Requirements on Mortgages For Doctors
Most borrowers are encouraged to save a deposit of 20% of the property’s value when looking for a home loan or risk paying Lenders Mortgage Insurance (LMI). Medical professionals, however, may be able to access home loans with lower deposit requirements than the standard 20%. Some lenders might allow borrowing with a deposit as low as 5%, avoiding the need to save a larger upfront sum.
LMI Waiver For Doctors
Linked to the lower deposit requirements is the LMI waiver for doctors. Generally if a borrower has less than than the 20% deposit available, lenders impose a fee called Lenders Mortgage Insurance, which protects the banks from the risk of a borrower defaulting on their home loan. Professionals and specialists such as doctors, lawyers and accountants can sometimes benefit from unique loan agreements that reduce or waive this fee altogether.
The discounts and terms vary by lender so it’s worth getting a mortgage broker involved to shop around for the right loan for your circumstances and to determine their eligibility for these specialist borrowing arrangements.
Other Home Loan Benefits for Doctors
There are a number of other potential benefits and opportunities available to medical professionals and specialists due to their perceived ‘low risk’ status with banks and lenders. These include:
Discounted Interest Rates and Fees For Doctors
Given that banks generally view doctors as good borrowers and attractive customers, some lenders may offer discounted interest rates to medical professionals and waive loan fees such as the application fee or services fee. These discounted rates are not advertised but can sometimes be negotiated. This discount could result in significant cost savings over the life of the loan.
Again, it is worthwhile working with a mortgage broker who already has relationships with the lenders and understands the products available to be able to negotiate and take advantage of the discounts and waivers that may be available.
Higher Loan Amounts for Medical Professionals
Doctors might be eligible for higher loan amounts compared to other borrowers, especially if they have a high income and good credit history. This can be beneficial for purchasing more expensive properties or securing financing for other purposes.
However, keep in mind that specific loan offerings and benefits change frequently, particularly in the current economic environment. It's essential to consult with a mortgage broker or financial institution for the most up-to-date information.
It's also important to note that these benefits are not universally available from all lenders, and eligibility criteria may apply. Different lenders might have varying terms and conditions for their professional home loan packages. Additionally, specific benefits can change over time due to market conditions and lender policies.
The information in this article is general in nature and doesn’t take into account your personal circumstances or financial situation.
To take advantage of these potential benefits, medical professionals should consider contacting multiple lenders or working with a mortgage broker who specializes in catering to professionals in the medical industry. They can help identify the most suitable loan options based on individual circumstances and financial goals.
If you are a doctor or other specialist professional, looking to take advantage of specialist borrowing arrangements, the experienced home loan expert from CJG Finance can help you navigate the process.
To find out more, contact us or call Colin at CJG Finance on: 0402 413 917 or email him: cgreen@cjgfinance.com.au
Komentáře