When it comes to saving on your mortgage, some of you may not have to look further than your job. If yours is a profession that classifies you as a ‘low risk’ borrower in the eyes of lenders, then you may be entitled to special discounts.
The lucky ones
Accountants, lawyers and teachers are commonly eligible for home loan discounts, or particular loan types without fees, based on their professions. The benefits differ depending on specific professions. It depends on what industry the lenders decide to target as it’s a constantly changing situation, so what’s here today may not be around tomorrow.
An example of this is the slowing down of the mining industry in 2015, which saw mining engineers lose their ‘in demand’ status and their profession-based discounts.
Doctors take the cake
Lenders have their own target lists of professions, but doctors are the big winners. They’ll get waived Lenders Mortgage Insurance (LMI), lower interest rates and, in many cases, banks will even go outside of their normal policy to get their loans approved. However, not all medical professionals, such as psychiatrists, chiropractors, vets and pharmacists, are accepted by all lenders so it’s always advisable to confirm with your broker.
How the perks work
Simply being in a certain profession won’t automatically save you on your home loan. To qualify you must apply with a lender that offers your profession a special discount and meet that lender’s criteria. You’ll often need to provide evidence of membership of a certain industry body such as the Australian Medical Association. Waived LMI is usually approved without any problems if you meet the criteria, however your mortgage broker may need to negotiate to get a better deal as well.
Because lenders don’t publish these better interest rates, to benefit from the discounts it’s best to have your broker by your side. Not only will they know which lenders to apply to, they will also assist you with pricing requests and negotiating for the best possible outcome for you.
…And that’s our 3 min Wednesday finance tip series for this week! Until next week, have a great hump day and enjoy rest of the week!! ?