If you are in the medical industry, there are certain benefits some lenders make available to you that are not available to most other professions.
These benefits can save you tens of thousands off your home or investment mortgage.
What are the benefits for those in the medical industry?
If you are purchasing a home
- You can borrow up to 90% of the value of the property (LVR) without having to pay lenders mortgage insurance (LMI). For most other professions, LMI kicks in at 80% LVR.In terms what this means in $’s, it’s a saving of around $16,000 upfront for a home valued at $650,000 at 90% LVR. That’s a quick way of gaining extra equity!
- Most lenders will have tiered interest rates that increase as the LVR increases. The benefit for Medico’s is that you can borrow at 90% LVR, and still receive the same interest rate as if you were borrowing below 80% LVR. The difference can be 0.8% or more, meaning you save around $4600 a year in interest using the example above.
- Most lenders require anyone borrowing above 80% LVR to have 5% of genuine savings to use as a deposit that can be evidenced as held or saved over a period of 3 months. While you’ll still need a deposit, you won’t need to prove this was held for 3 months or more if you’re borrowing 90% or less.
If you are purchasing an Investment property
If you’re looking at an investment property, you will also benefit from the 90% LVR waiver and discounted interest rates. These benefits are applicable if you are making principle & interest repayments or interest only repayments.
Who is eligible?
The following list of medical professions are eligible for the benefits above.
- General Practitioners
- Hospital-employed Doctors (e.g. Intern, Resident, Registrar, Staff Specialist)
- Medical Specialists
- Veterinary Practitioners
Applicants need to be permanent Australian residents or an approved permanent visa holder. Generally, applicants on Temporary 457 visa are only eligible for the purchase of owner occupied properties.
I get paid per invoice or contract, am I still eligible?
Self employed medical professionals are eligible for this offer, generally the most recent tax return will be used to verify your income, or in some circumstances invoices may be used.
Practice Premises as security
If you’re looking at purchasing a practice premises, that is zoned for use as either business premises or residential, and can easily be converted back into residential accommodation, then there is a good chance the security can be treated as a residential security. This is an important distinction as residential security will attract a much better interest rate, and longer loan term than a commercial loan.
Borrowing in the name of a trust or a company is available under this special package, or in a spouse’s name as long as the medico is involved, typically as a guarantor.