When applying for a home loan, many borrowers have to pay lender’s mortgage insurance (LMI), which can be quite expensive. However, in some instances, this cost can be waived. There are a few lenders who offer no LMI mortgages to certain professions and those who earn a high income. Here are a few professions where you can qualify for waived LMI.
For doctors, the maximum loan you can apply for in order to get a waived LMI is $4.5 million; it can be 100 per cent of the property price. You should also be on a list of preferred medical professionals, such as pharmacists, chiropractor, veterinarians, optometrist, or dentist. In addition to that, you should also be a member of organisations like the AMA.
As an accountant, you can get a maximum loan of $2 million and up to 90 per cent of the property price. You should also be a member of a relevant industry body. A person working in the capacity of an actuary, auditor, financial manager, chief financial officer (CFO), and accountant falls into the category of professionals who can qualify for waived LMI. For that to happen, you must have an annual income of $150,000 or higher (rental income is also taken into account).
Solicitors, judges, barristers, or lawyers must be a part of a relevant organisation in order to qualify for waived LMI. In addition to that, the maximum loan limit is the same as accountants, and you can get a loan of up to 90 per cent of the property price. The income should be higher than $150,000 a year or soon to be at this level; rental income is also considered.
Resource, energy, and mining specialists should be working as a geophysicist/geologist, quantity surveyor, or a mine surveyor to get a waived LMI. The loan value and limit are the same as that of lawyers and accountants, i.e., $2 million and 90 per cent of the property price respectively. You should be earning over $150,000 on a yearly basis to get the LMI waived.
If a professional athlete has an accredited agent or manager, he or she can be considered for waived LMI. All other requirements are the same as for lawyers and accountants.
These professionals should either be working in fashion, theatre, film, television, or music industry in order to qualify for waived LMI. The minimum income should be over $150,000 and the maximum loan amount should be $2 million with a maximum limit of 90 per cent of the property price.
DHA Housing for Investment Purpose
When you purchase a property as an investor in Defence Housing Australia (DHA), you can get up to 90 per cent of the waived LMI.
No LMI with Guarantor
If you have a guarantor who is your relative and owns a property in Australia, you can qualify for waived LMI. There is no requirement to have a minimum deposit, nor should you fall into the category of a professional. Although this option doesn’t suit everyone, the first home buyers can benefit from it by stepping a foot into the market.
Why do Lenders Accept Certain Professionals and Not Others for waived LMI?
The reason is fairly simple; professionals in the above-mentioned fields hardly ever default on their loans, borrow at a high loan value, and make timely repayments.
Moreover, they have connections with highly influential people in the same industry. This makes them favourable clients in the eyes of a lender.
How Can You Reduce the LMI Premium?
If you don’t fall into any of the categories for the professions mentioned above, it might be hard for you to qualify for waived LMI. However, you can get a reduced LMI premium if you keep the following factors in mind:
- Proof of genuine savings
- Qualification for a guarantor loan
- Choosing the right insurer and lender
- Loan to value ratio
- Loam amount
All in all, the above-mentioned professions are the chosen few that qualify for a waived LMI. Other than that, you can apply for a reduced premium, but LMI will not be waived completely.