Doctors, Dentists, Vets and other medical practitioners are considered less risky by the banks and as such, some lenders offer greater discounts on interest rates. Certain lenders will also consider lending up to 90% LVR (that is, with only a 10% deposit) and waive the lenders mortgage insurance premium.
This article explains some of the benefits available to certain medical practitioners and the criteria.
Firstly, What is Lenders Mortgage Insurance?
The first thing to quickly note is - what is lenders mortgage insurance. Lenders mortgage insurance ('LMI') is insurance taken out to protect the lender in event of default by the borrower. As a rule, in Australia lenders mortgage insurance is required when the borrower does not have a 20% deposit.
Lenders Mortgage Insurance can be very expensive. On a $1,000,000 property for example with a $900,000 loan, the premium would be circa $15,000.
Can Lenders Mortgage Insurance be Waived?
Certain medical practitioners can apply for a waiver of LMI thereby resulting in a considerable savings.
What is the Criteria?
Apart from normal lending criteria that has to be satisfied (such as borrowing capacity, clean credit etc), the criteria to apply for an LMI waiver is 2 fold. The medical professional needs to be both in an "eligible profession" and also a member of an "eligible association".
1) Eligible Professions
To qualify for LMI waiver, the medical professional needs to be in one of the following professions:
Anesthetist, Cardio Thoracic Surgeon, Cardiologist, Clinical Pharmacologist, Cosmetic Surgeon, Dentist, Dermatologist, Ear and Throat Surgeon, Emergency Surgeon, Endocrinologist, Gastro Intestinal Surgeon (Upper/Lower), Gastroenterologist, General Practitioner, General Surgeon, Gynaecologist, Haematologist, Hepatologist, Immunologist, Nephrologist, Neuro Surgeon, Neurologist, Obstetrician, Oncologist, Opthalmologist, Optometrist, Oral and Maxillofacial Surgeon, Orthopaedic Surgeon, Otolaryngologist, Paediatric Surgeon (Neonatal/Perinatal), Pathologist, Plastic Surgeon, Psychiatrist, Radiologist, Reconstructive Surgeon, Respiratory/Thoracic Surgeon, Rheumatologist, Surgeons, Urologist, Vascular Surgeon, Veterinarian.
2) Eligible Association
To qualify, the medical professional needs to be a member of one of the following associations. If they are entitled to membership but not currently a member, this is fine. Membership will need to be applied for before the loan can be fully approved.
· Australian Veterinary Business Association
· Australian Association of Practice Managers
· Australian Veterinary Association
· Australian Dental Association (ADA)
· Australian Medical Association (AMA)
· Optometrists Association
· Urological Society of Australia and New Zealand
· Australian College of Cosmetic Surgery
Can I apply for a waiver if I am Refinancing or buying an investment property?
Yes, as long as the above criteria is complied with, there are no restrictions.
If I am a Temporary Resident on a 457 Visa - can I apply for the waiver?
Yes, providing one applicant is a medical professional
Home Loans for medical professionals with an LMI waiver are available in Australia. The LMI Waiver can result in a savings of up to $16,000 in fees. Providing one applicant is a medical professional in one of the above professions and holds, or can apply for membership with an eligible association, then an LMI waiver is possible.