Getting a home loan is not easy. However, if you are a barrister, solicitor, or a lawyer, we’ve got good news for you! Financial institutions in Australia are offering loans for those within this profession with very reasonable terms.
Why do legal professionals get home loans on favourable terms?
The answer is simple. In Australia, this profession is considered to have a low-risk profile. The individuals working in a legal profession are known to have a safe pay scale. According to a survey conducted by the Australasian Legal Practice Management Association (ALPMA) in 2015, an increase of 4.6% was observed in the salaries paid to lawyers by law firms. Moreover, the survey also mentioned that 76% of the firms were expected to pay the salaries equal to or more than the consumer price index (CPI) in the next twelve months.
What favourable terms do you get?
First of all, financial institutions, such as banks, are willing to offer a loan that is worth more than 80% of the property value without requiring Lender Mortgage Insurance or LMI.
What is LMI?
Lenders mortgage insurance is an extra charge paid at loan settlement when the borrower lends an amount that is more than 80 percent of the property value. It protects financial institutions in case the borrower defaults on a home loan. The amount is paid in the form of insurance premium when the loan is given. However, it doesn’t affect the rate of interest charged on a loan.
Secondly, if a lawyer has a good financial position and borrows less than 80 percent of the total value of a property, he or she can actually receive a discounted rate of interest on their loan. This rate is far less than the standard rates charged by the banks.
Benefits of getting a loan on favourable terms
LMI is not cheap. In fact, it is very expensive. It can be about $20,000 or more for a property that costs about $1M. So, making the most of the lending benefits through your profession can save you a lot of money. Which down the line could be spent on your child’s high school education, a family holiday, or for further investment in the stock market.
Where can a law professional look for home loan offers?
Legal professionals should bear in mind that these offers are not usually advertised by the institutions. Therefore, whenever they look for such offers, they should consult their mortgage broker as he or she will be in a better position to guide them.
What are the requirements qualify for these benefits?
If you are a barrister, a qualified lawyer or a solicitor with membership in one of the following associations, you are highly likely to be qualified for discounted rate of interest or waived LMI offer:
- The Australian Bar Association
- Queensland Law Society
- Law Society of South Australia
- Law Society of NSW
- Law Council of Australia
- Australian Insurance Law Association
- The Commercial Law Association of Australia
- Australian Corporate Lawyers Association
- Australian Labor Law Association
- Law Institute of Victoria
Moreover, there are other societies and bodies in the law industry that may also qualify for these benefits, but that will vary from case to case. Also, there are some members who do not ask for membership as an evidence. A copy of your law degree or any other evidence may be required to make sure you are still in the practice.
If you are a former law graduate, you would already have an idea about how tough it is to get a full-time job in the industry. But if you have managed to make it to your dream job, you deserve to be rewarded through these offers for all the years of hard work.
Speak to our team at Hunter Galloway about how your profession can benefit you when applying for a home loan 1300 088 065 or email [email protected] now!