When it comes to home ownership in Australia, nobody gets it easier than medical professionals. According to statistics, they’re generally high-income earners and have outstanding history of repayments. From a business standpoint, lenders would move mountains to lure such low-risk borrowers.
In light of this, the medico sector enjoys exclusive privileges the public could only dream of. From application to negotiation, MediProCapital cites three of the biggest favours lenders give to doctors:
First and foremost, lenders are more willing to make less profit in exchange for more guarantee of repayment than offer high interest and gamble to a risky borrower.
If you’re an eligible medical professional, your lender would be happy to work out a favourable deal with you just to get your business and reduce the possibility of incurring huge losses. Although the property serves as mortgage security, a foreclosure is a just last-ditch effort to minimise the losses lenders have to absorb in case of default.
But because your profession is eternally in-demand, you’re less likely to give lenders headaches when it comes to collection. A discounted interest rate is a reward your lender would be glad to give.
Lax LTV Requirement
Unlike other mortgages these days, medico home loans usually have high LTV. This means you might be allowed to borrow more than an average borrower can. In some instances, you may even get more than 100% financing to fund your other expenses.
In short, you would rather be less pressured to come up with a deposit. With a smaller deposit, you can minimise your out-of-pocket expenditures and experience high returns should your property value increase over time.
Most importantly, being a doctor can be your ticket to avoid paying the useless Lenders Mortgage Insurance. This one-off fee insures your lender in case of default, which could cost a serious amount of money.
Borrowers can normally get rid of this charge by putting down at least 20% of the purchase price, but medical professionals can usually negotiate to get this fee waived despite a 10% deposit or less.
Indeed, realising your Australian dream of home ownership, and investing in real estate, is a breeze if you’re a medico. Play your cards right, and you could save ten thousands of dollars for your property purchase.