If you’re in the medical profession and paying a standard mortgage rate, then it’s probably time to do a check-up on your home loan.
Otto Dargan, Director of Home Loan Experts, stated that banks prefer borrowers to doctors.
“Some banks have special home loan packages for medical professionals such as doctors. In the past there were specific discounts for the lawyers and accountants as well, however in recent times these have been less competitive than a professional package with a negotiated interest rate.”
Banks consider doctors to be a risk and therefore offer the best deals.
“The banks actually monitor the default rate of particular professions and then use this data to tweak their lending policies,” Dargan says.” Doctors are known to be a very low risk in fact they almost never default on their loans. In addition to this their income tends to grow exponentially as their career progresses, and so they buy investment properties and apply for many more loans with their bank.”
Dargan points out the incredible deals that are available.
“We recently helped a client with several large loans to negotiate a 1.10% discount below the Bank Standard Variable rate, which would have been unheard of a year ago. Doctors, people borrowing less than 75% of the property value and people borrowing over $500,000 should all be negotiating with their lender or using a mortgage broker to shop around for a better interest rate.”
Doctors can choose between waived lenders mortgage insurance and a discounted interest rate. If your borrowing exceeds 80 percent of the property’s value, you should consider waivers LMI. Dargan recommends that borrowers negotiate lower rates of interest if they borrow less than 80 percent.
Banks view nurses and teachers as less risky than other professions. Both have stable jobs and are cautious in spending. Although they aren’t eligible for discounts, banks will let them borrow as per their lending guidelines.
Dargan stated that builders and developers are not traders, but high-risk due to the fluctuating nature of their income. As well, professional property investors that rely on investment as their sole source of income are also considered high risk as many become overcommitted.
“In particular banks are very conservative when assessing a low doc loan for people in these professions. However if you can prove your income, have a good credit history and genuine savings then you should have no trouble getting an approval.”
Dargan claims that every lender has a different policy on length of employment.
“Most lenders will require that you are not on probation, or that you have been in your job for at least six months. However there are lenders that can approve your loan even if you have just started your job today.”
For university graduates, it is often more difficult to get a loan for their house because they are unable to prove that they have worked in the exact same industry for at least two years. They may not meet the approval criteria of lenders and they won’t be approved.
Dargan indicated that lenders might lend money to graduates from universities if they are in the same field as their studies.
“They just need to apply with a lender that has more flexible policies for employment history and ideally to be at least one month in their new job,” he says.