Your profession plays a vital role in finding a good deal on home loans. If you are a medical professional and have taken out a mortgage on standard terms, it might be time to re-consider your options. We’ve covered why doctors and lawyers get special treatment before, but below we’re going to focus on how your profession dictates your mortgage terms.
Various Deals Offered to Medical Professionals
There are some lenders who offer special home loan deals to medical professionals. A few years ago, accountants and lawyers used to get special offers, such as specific discounts on home loans. However, these offers are not as competitive as today’s special home loan deals. You can also negotiate interest rates along with these deals.
Why Do Medical Professionals Get Better Deals?
Simply put, banks categorise medical professionals as low-risk borrowers. This is why they get special home loan packages. Most lenders keep monitoring the default rate of various professions which allows them to gather data and make changes in the lending policies accordingly. Medical professionals rarely default on their loan and are known to be less risky. Moreover, their salary continually grows as they progress in their professional career.
Doctors are given two choices. They can select one of the following:
- Waived Lender’s Mortgage Insurance, or
- Discounted interest rates
If they plan to take out a loan worth more than 80 percent of the property value, the best option is usually to waive lender’s mortgage insurance.
Other Professions with a Low or High-Risk Level
In addition to doctors, banks also consider nurses and teachers to be of low risk. There are two reasons why they fall in the low-risk category:
- Stable employment
- Conservative spending habits
Lenders don’t offer any special discount to these professionals, but they accommodate them by providing more flexibility towards loan approvals.
On the other hand, builders and developers are considered high risk due to frequent changes in their income. Moreover, professional property investors are also considered high risk. Their only source of income is the profit they earn from investments. They become overly committed to their investments, which eventually makes them fall in the category of high risk borrowers. Lenders have a conservative approach when it comes to evaluating a low documentation loan for high risk borrowers. However, if they have a good credit score, genuine savings, and solid proof of income, they easily get loan approval.
Home Loan Policies for Recent Graduates
Policies regarding the length of employment vary from one lender to another. For example, some of them require that you are employed in your job for at least six months, while others expect you to not be on a probation.
Graduates, however, find it hard to get a good home loan deal. This is because they do not have any evidence to prove that they are in the same sector for a minimum period of two years. This is why they fail to meet the lending conditions and often are unable to obtain a loan. But there are some lenders who approve home loan applications for young graduates if they are doing the job in the field of their specialisation.
Due to the variety of circumstances and changes, chat to our team about your current situation and the best interest rates and mortgage terms possible. Call 1300 088 065 or email Joshua at Joshua.Vecchio@HunterGalloway.com.au