The Mortgage Agency
LMI Waiver for Legal Professionals
Many legal professionals can enjoy significant benefits when taking out a home loan, simply because of their line of profession.
Lenders offer these incentives to high-earning professionals such as accountants, doctors, engineers and lawyers simply because they’ll likely apply for higher loans than someone outside these professions – plus there’s minimal chance of them not being able to afford the mortgage repayments.
Therefore, these professionals are attractive clients for lenders because they’re low risk with high return.
If you’re looking into buying property, home loans for lawyers can save you thousands of dollars in lenders mortgage insurance (LMI) and other fees.
Who Has To Pay Lenders Mortgage Insurance?
Generally, any standard home loan with a deposit of less than 20%, meaning a loan to value ratio of 80% or more, will require lenders mortgage insurance.
LMI is something lenders require borrowers to pay if there is a risk that if the borrower defaults on payments, the lender won’t be able to recover all their rightful money.
Most lenders believe that a 20% deposit or more will cover up the balance, and that’s why borrowers with a large deposit aren’t required to pay LMI.
While LMI is provided through a third party, it’s facilitated by your lender. So, the LMI cost gets lumped into your home loan and accumulates interest. The fees can be around 2% of your total home loan amount – which is a lot of money!
For this reason, many people approach a mortgage broker to help them find ways to waive LMI. Most lenders offer LMI savings to eligible legal professionals straight off the bat because they’re more low risk borrowers.
Here’s an example:
Michaela has been practising in law for a few years and is in the position to purchase a property with the $50,000 she’s saved up for a deposit. The place she has her eye on costs $500,000, so Michaela will need to borrow a loan amount of $450,000.
Her LVR is calculated by dividing how much she needs to borrow by the property’s value.
450,000 ÷ 500,000 = 90%
Michaela has a high LVR of 90%. Luckily for her, as a qualified and practicing lawyer, she may be eligible to have her LMI waived even though her LVR is higher than 80%.
Contact The Mortgage Agency to help you save thousands of dollars on lenders mortgage insurance if you’re a legal professional.
Who Has To Pay Lenders Mortgage Insurance?
The two main requirements across the park are that you can produce evidence of your degree and industry membership, and that at the time of application, you are practising. These can be proved via copies of certificates or written confirmation.
Here are the associations generally accepted:
- Australian Corporate Lawyers Association
- Australian Insurance Law Association
- Australian Labour Law Association
- Law Council of Australia
- Law Institute of Victoria
- Law Society of NSW
- Law Society of South Australia
- Queensland Law Society
- The Australian Bar Association
- The Commercial Law Association of Australia
Different lenders have different requirements, but their eligibility criteria is generally the same.
- Home loans for lawyers are also awarded to solicitors, barristers and partners, as well as many others in the same bracket who have varying job titles, such as associates or legal counsels.
- Judges and magistrates are also eligible so long as they can provide evidence that the only reason why they don’t hold a practising certificate is due to a condition of their employment.
- Federal or state government lawyers can receive the same home loan benefits as those privately employed or running their own legal practice.
Remember, the reason why lenders offer an LMI waiver for lawyers is because of their high salary bracket. As a result, there is a minimum income requirement in order to receive these benefits. Therefore, some judges, magistrates and government lawyers may earn below the threshold and not qualify.
Certain banks may require certain level of income before this benefit can be provided, that’s why its best to contact us to talk about your options.
Unsure whether you qualify? Contact us today and we’ll evaluate your eligibility.
What Other Benefits Come With Home Loans For Lawyers?
Because of your favourable financial position, a mortgage broker may be able to negotiate lower interest rates and other discounts on your home loan. Because you’re an attractive borrower, lenders will be more likely to comply just for the sake of signing you up as a client.
When it comes to refinancing, you can also refinance up to a maximum of 90% of the property value without having to pay LMI. This means you have more access to your home’s equity, and you can use that money to buy more investment properties.
Lenders will also approve home loans for lawyers with a high loan to value ratio, meaning they can pay a smaller deposit without having a guarantor or paying LMI. This means those in the legal profession can become homeowners sooner because they don’t have to take time saving up a sizable deposit.
The Mortgage Agency is here to assist you in finding out whether you’re an eligible legal professional, and what benefits you can receive.
Why A Mortgage Broker Can Be HelpfulWhy A Mortgage Broker Can Be Helpful
Take note that lenders don’t necessarily advertise the more flexible lending criteria or additional benefits that law professionals enjoy publicly, unless they’re asked.
Our brokers from The Mortgage Agency are home loan experts, so not only can we advise professionals on what they may be eligible for, but we have relationships with major lenders. Our mortgage brokers know which lenders offer the best LMI savings to lawyers, and can do any necessary negotiations for discounted interest rates on your behalf.
We also know how demanding a career in the legal industry can be, so we’re here to take care of all the nitty gritty so that you can focus on your clients. We can meet you wherever you’re at, and explain everything in as much or as little detail as you prefer.
Our home loan experts have the experience to ensure you get the best value for your money.
