Are you a doctor? Save on LMI! Oct 9, 2019 | Mortgage Insurance One of the hardest parts of securing a home loan is saving the 20% deposit required by Australian lenders. Fortunately, medical professionals are eligible for an LMI waiver from the major banks and most smaller lenders, meaning that they can borrow up to 90% of the property value in metropolitan areas with no requirement to purchase Lenders’ Mortgage Insurance (LMI). This is a great opportunity for medical professionals to break into the home loan or property investment market and save tens of thousands of dollars on LMI costs. Who is eligible? Some lenders offer LMI waivers to borrowers who are employed within specific medical professions. As this offer is extremely lucrative, there are tight restrictions on the eligibility for the waiver. Generally, you must: Have a clean credit history Be employed as a “preferred medical professional”, such as a doctor in any specialty, dentist, physiotherapist, chiropractor or select others. Contact Your Financial Adviser to find out whether your profession is on the list! Show regular income Show a history of stable employment in your field. Be a member of an industry association that is acceptable to the lender (for example, the AMA). How much can I borrow? In certain cases it is possible to borrow up to 100% of the property value, however it is far more common for lenders to offer funding for up to 90% of the property value to select medical professionals. The lender will take into account your borrowing capacity when calculating the loan approval, so it’s important to ensure that you will be able to service the loan before applying. Whilst there is no official limit for the LMI waiver, the lender will determine whether the loan meets their risk requirements, and the maximum loan amount is generally limited to $4.5 million. Why do banks offer this discount to medical professionals? The LMI fee pays for an insurance policy that covers the bank for losses they incur if the borrower cannot repay their mortgage. Fortunately, data shows that medical professionals have a low chance of missing their mortgage repayments due to high income and strong employment prospects, so lenders see them as extremely low risk customers. Are other professionals eligible? Yes! Although this discount is difficult to acquire, certain other high income professionals may be eligible for an LMI waiver on a case by case basis. The list differs between lenders, but a few examples include lawyers, accountants, professional athletes and mining specialists. Basic tips to improve your chance of approval Aside from proof of employment and industry membership, there are no special requirements for medical professionals to receive an LMI waiver. To maximise your chances of approval for such a loan, you should: Apply through a broker with proven experience with LMI waiver home loans Ensure your credit history is spotless Have all paperwork in order before you apply. If you are a doctor or other medical professional, speak with Your Finance Adviser to discuss whether you may be eligible for an LMI waiver on your next home or investment loan.
