Home loans for professionals save a particular group of people thousands of dollars every year.
Certain professionals who earn a salary high enough for lenders to consider them low risk can benefit from numerous home loan perks available to them.
If you fall into these categories of borrowers then keep reading, as home loans for professionals can help you purchase your dream home sooner with significant savings.
Who Qualifies for This Type of Home Loan?
Most borrowers with stable employment and within a particular industry will be able to apply for home loans for professionals.
These include, but are not limited to:
- Energy professionals
- Entertainment professionals
- IT professionals
- Medical professionals
- Professional sportspeople
- Quantity surveyors
- Resource professionals
Take note that home loans for professionals generally only apply if you’re going to live in the house you’re buying. Certain banks may not allow for investment property purchases under this benefit.
Why Do Professionals Have Access to These Types of Home Loans?
By meeting the requirements, these borrowers are very attractive to lenders.
Professionals are in a financial situation where they are receiving a salary with stable employment. Most of these professionals had to undergo many years of tertiary education so it’s unlikely they would change professions quickly or easily.
This gives lenders great security that it is improbable that these borrowers will default on their mortgage repayments.
Additionally, because they earn big, they can spend big, thus some lenders want their business for future opportunities. And to secure their business lenders are prepared to give these low-risk borrowers special discounts and more competitive rates.
What Discounted Interest Rates and Other Perks Are Available?
Discounts on interest rates are usually a percentage below the Bank Standard Variable Rate (BSV).
A standard professional package typically offers up to 1.0% off without any negotiation. But, experienced mortgage brokers can sway lenders on your behalf, especially if your loan is for a large amount.
Additionally, your mortgage broker will approach various lenders to find the best interest rate discounts for you to choose from.
Another attractive perk is that home loans made for professionals will allow borrowers to lend up to 100% of the purchase price and pay up to 0% deposit as gap finance can come into play.
This is the most significant of the home loan deals because it allows many borrowers to begin their home loan journey and their journey to homeownership sooner.
Personal circumstances often make it difficult to save up a deposit. This is even more true for professionals who are still paying off years of student debt.
Not having to pay a deposit means that the professional only has to have enough money up front to cover the:
- transaction costs;
- legal fees;
- statutory charges; and
- stamp duty.
Lenders are prepared to offer this special financial product to professionals because of the security their salaries provide. For this reason, lenders feel less at risk and don’t see as much need for lenders mortgage insurance.
Why Professionals Should Want To Waive Their Lenders Mortgage Insurance
Waiving your lender’s mortgage insurance, or at least reducing it, can result in massive savings.
Lenders take out insurance for most home loans that they approve. This is to cover them if the borrower defaults on payments and the lender need to repossess the house.
The risk comes when the house has depreciated to below the property purchase price, and repossessing the house won’t cover all the losses.
Typically, lenders take out lenders mortgage insurance when the borrower puts down anything less than a 20% deposit. This is because lenders consider a 20% deposit enough insurance should the borrower default on payments.
The borrower is then required to pay this insurance. It can amount to a large amount of money. This is why people try their best to achieve a waiver. Other ways to do so can be by:
- using the equity in their other house or investment property;
- using the First Home Loan Deposit Scheme; or
- having a guarantor.
A home loan for a professional can allow them to pay a lower deposit than standard, and waive their insurance, too. While having a smaller deposit will mean higher repayments every month, this option allows borrowers to purchase a home sooner without saving to save as much or as long for a deposit.
How Can The Mortgage Agency Help?
At The Mortgage Agency, we have a team of highly skilled professionals who can help you from your first home purchase to building your investment portfolio a few years down the track.
We pride ourselves in meeting you where you are and taking care of all the nitty-gritty when you don’t have time with your busy schedule.
Our mortgage brokers have relationships with majority of the lenders and can easily negotiate the perfect deal to suit your needs.
Before going ahead and applying for a home loan, it’s worth doing some research first. You might just discover that you, as a certain professional, qualify for a special kind of home loan with discounted fees.
This means you can buy your first home sooner, as you don’t need to save up as much deposit.
To get the best deal as a professional, you need a mortgage broker who has experience obtaining these types of loans. Of course, employing a professional’s help can make the journey smoother, but our expertise can save you even more money in the long run.
At the Mortgage Agency, our services are extensive for your convenience:
- we can help you purchase your first home or investment property;
- we can review your existing loan arrangements for a more viable option;
- Consolidate your debt to reduce expenses;
- and more.
Every customer that walks through our doors has a unique story, and that’s why we do more than just getting you that loan. Our service is all about planning, strategising and helping you achieve your financial goals.
If you would like to explore your home options as a professional or see if you qualify for the LMI waiver for professionals, book a consultation with one of our expert mortgage brokers today.
Please note that every effort has been made to ensure that the information provided in this guide is accurate. You should note, however, that the information is intended as a guide only, providing an overview of general information available to property buyers and investors. This guide is not intended to be an exhaustive source of information and should not be seen to constitute legal, tax or investment advice. You should, where necessary, seek your own advice for any legal, tax or investment issues raised in your affairs.