General Practitioner Home Loans without paying Lenders Mortgage Insurance
GPs can save thousands of dollars in lenders mortgage insurance (‘LMI’) up to 90% LVR if they qualify for a full waiver (that is, with only a 10% deposit). This is a potential savings of $8,000 – $50,000 depending on the purchase price of the property.
Professional Home Loans has semi exclusive agreements to offer this product to our GP clients. This offer is not available to general mortgage brokers so please contact us on 1300 55 44 97 to see if we can help.
What is the criteria for General Practitioners to waive LMI?
For General Practitioners to obtain waiver of the lenders mortgage insurance premium, they must be able to demonstrate;
- Membership with AMA or RACGP (or able to obtain membership),
- Maximum loan amount 5 million dollars,
- One applicant must be an Australian Citizens or Permanent Residents,
- Otherwise meet normal lending credit criteria.
Whilst the decision to waive LMI is on a case by case basis, generally speaking applications from General Practitioners who meet the above criteria will be approved for the waiver.
What if I am self employed getting paid a percentage of billings?
Often we help GP’s who might have recently changed to work for a local medical practice and are getting paid a percentage of their billings. Many banks will treat this arrangement as being self-employed and will apply strict rules requiring 2 years full tax returns and financials.
Professional Home Loans can help GP’s who are contracting and getting paid a percentage of billings without having to wait for 1-2 years’ worth of income evidence.
The criteria is as follows;
- Evidence of previous income as PAYG (if with current practice for less than 1 year),
- Servicing/Borrowing capacity evident based on previous PAYG income (that is, on income as a PAYG doctor you can afford the repayments),
- Evidence to support current income by the way of;
- Contract with Medical Centre confirming percentage of billings,
- 3-6 months Invoices,
- Where applicable, BAS/GST statements.
Examples of how this policy could be used
GP’s could use this policy standalone to purchase a new home or investment property. Alternatively, they could refinance their current home loan into this offering and release equity for a purchase of another property.
Interest Rate Discounts for General Practitioners
Loan products available for GP’s include standard variable with package discounts and fixed rates and include offerings with full features such as offset accounts and redraw.
Why are some banks waiving LMI for GP’s?
Lenders mortgage insurance is designed to protect the lender against default of the client and to cover any loss should the client not pay back the mortgage.
Some lenders have run the numbers and have determined that the default rate on home loans for GP’s is very low. As such, the risk of default from these professions is low and therefore they have decided to consider waiving the LMI premium for General Practitioners.
What is the next step?
There are a number of lenders offering this product with most only releasing to a few key specialist broker groups.