03 Jan How Your Profession Can Dictate Your Home Loan Discount
Firstly let me quickly wish everyone a Happy New Year. We are looking forward to helping you achieve their dreams in 2017. So if it is your first home, a property investment, or refinancing so you can save money. We can help.
There are a few professions that stand out in the mortgage world as low risk to lenders. People in these professions can benefit from better deals on home loans.
If you are in the medical profession and paying a standard mortgage rate, then it is definitely time to do a check up on your home loan. Banks have a list of preferred borrowers and doctors top that list not surprisingly, as the lowest risk. This because they almost never default on their loans. In addition to this their income tends to grow exponentially as their career progresses. This means they buy investment properties and apply for more loans with their bank.
Doctors can choose between waived lenders mortgage insurance and a discounted interest rate. If you are borrowing more than 80% of the property value, it is usually best to go for the waived LMI. But, if you are borrowing under 80% and LMI is not an issue, it is advised that borrowers should negotiate a lower interest rate.
Teachers and Nurses
Teachers and nurses are considered a lower risk for the banks than other professions. This is because they have stable employment and tend to be very conservative in their spending habits. While banks do not offer special discounts for these professionals they will bend their lending guidelines to approve their loans.
There are also specialised lenders that cater specifically to people employed in the education sector. Teachers Mutual Bank offer very competitive rates. They also offer the same rates to immediate family members of anyone working in the education sector.
On the other end of the scale, developers and builders (not tradesmen) are considered high risk due to the fluctuating nature of their income. Professional property investors that rely on investment as their sole source of income are also considered high risk as many become over committed. In particular banks are very conservative when assessing a low doc loan for people in these professions. However if you can prove your income and have a good credit history and genuine savings then you should have no trouble getting your approval.
Each individual lender will have their own policy regarding length of employment. Most lenders will require that you are not on probation, and that you have been in a job at least 6 months. However there are a few lenders that will approve your loan even if you have just started your job today. It is probably best to speak to your broker and they can advise you on your options.
University graduates will struggle to get a good deal on a home loan. This is because they cannot prove they have been working in the same industry for at least two years. As a result, they usually will not meet the approval criteria of some lenders. However keep in mind some lenders will consider lending to new university graduates. This will be when they are working in a job that is in the same field that they were studying in. 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.
Rates and features
It can be confusing to know whether to get a variable rate or fixed rate mortgage, and what features are important. That is why it is important to not only check the right rates, but make sure you are getting the right features in your home loan. Your broker can do all the leg work for you and advise you of the best deals and features to suit you at no charge.
Advanced Finance Solutions has two friendly professional brokers Anita and Marion that can help you make sure you are getting the best deal available at the time for your circumstances. Please call 02 4919 0478 to book a free appointment.
We are wishing all a wonderfully fruitful year and look forward to meeting you.