Home Loans For Emergency Services Workers
October 31, 2023
Finance Focus – November
November 17, 2023
Home Loans For Healthcare Workers
In the fast-paced world of healthcare, where every day is a whirlwind of dedication and hard work, one thing you shouldn’t have to worry about is securing the perfect home. At Parrington Finance, we understand the unique challenges faced by healthcare professionals.
This guide will walk you through the ins and outs of home loans for healthcare workers and the current grants & opportunities on offer in Australia.
Whether you’re a newcomer or a seasoned veteran in the healthcare sector, specialised home loans for medical professionals offer advantageous features such as reduced interest rates, lower down payments, and exemptions from lenders’ mortgage insurance (LMI).
Looking for a home loan that’s right for you? Get in touch today.
What does home loans for medical professionals mean?
Medico loans, also recognised as home loans for medical professionals, have been tailored to support healthcare workers in Australia in their pursuit of homeownership. Lenders understand the unique financial profile of healthcare professionals, which includes stable income, higher-than-average salaries, and a track record of responsible financial management. To reward their financial stability, these loans come with a range of exclusive discounts and benefits.
In a nutshell, medical practitioners such as doctors and registered nurses now have the opportunity to borrow up to 95% of a home’s value without the burden of paying lender’s mortgage insurance (LMI).
Typically, when the loan-to-value ratio (LVR) exceeds 80%, lenders require borrowers to pay for LMI. However, for healthcare workers, this requirement is waived as of June 2023, making homeownership more accessible than ever before.
What are the benefits of getting a home loan for healthcare workers?
There are a number of benefits to getting a home loan for healthcare workers in Australia.
Some of the most common benefits include:
- Waived or reduced LMI: Lenders mortgage insurance (LMI) is a type of insurance that protects the lender in the event that the borrower defaults on their loan. It is typically required for loans with a loan-to-value ratio (LVR) of over 80%. However, many lenders offer waived or reduced LMI for healthcare workers. This can save borrowers thousands of dollars.
- Higher loan amounts: Some lenders may be willing to lend healthcare workers more money than they would to other borrowers. This is because healthcare workers are typically seen as low-risk borrowers.
- Competitive interest rates: Healthcare workers may also be able to qualify for competitive interest rates on their home loans. This is because lenders are keen to attract and retain healthcare workers as customers.
In addition to the above benefits, healthcare workers may also be eligible for other benefits, such as:
- Flexible repayment options: Some lenders may offer healthcare workers flexible repayment options, such as the ability to pause or reduce repayments for a period of time. This can be helpful for healthcare workers who may experience periods of unemployment or reduced income.
- Professional package benefits: Some lenders offer professional package loans to healthcare workers. These loans may include a range of benefits, such as waived LMI, higher loan amounts, competitive interest rates, and other professional services, such as accounting and financial planning advice.
Healthcare workers should compare offers from multiple lenders to get the best possible interest rate and terms.
Speak to our team today to get expert advice on finding a home loan today.
Why are medical professionals favoured by lenders?
There are various reasons why medical professionals are favoured by lenders.
- They are often considered as low risk borrowers.
- They have a higher income than most people in other industries,
- They have a stable income therefore less chances of defaulting.
Most lenders have strict policies for home loans and consider your financial situation and credit score before any approval. All of the above reasons work in favour of healthcare workers and make it easy for them to to secure a loan without LMI.
What are the different types of home loans available to healthcare workers?
There are a number of different types of home loans available to healthcare workers in Australia. Some of the most common include:
- Variable interest rate loans: These loans feature interest rates that can change over time. They suit borrowers comfortable with the prospect of interest rate fluctuations.
- Fixed interest rate loans: Unlike their variable counterparts, these loans lock in interest rates for a specific period. They are ideal for borrowers seeking financial predictability and a clear monthly budget.
- Split loans: Offering a balance between flexibility and certainty, split loans allow borrowers to divide their loan into parts, one with a variable interest rate and the other with a fixed interest rate. This enables borrowers to make extra repayments on the variable portion while knowing their fixed portion remains stable.
- Professional package loans: Tailored for professionals like healthcare workers, these loans come with perks, such as waived LMI, higher loan limits, and competitive interest rates.
- First home buyer loans: Geared towards helping first-time home buyers, these loans may offer benefits like waived LMI, lower deposit requirements, and potential government grants.
It is also important to note that some lenders may have specific requirements for healthcare workers who are applying for a home loan. For example, they may require borrowers to have a certain level of income or to be employed in a certain profession.
If you are a healthcare worker and are interested in buying a home, get in touch today!
What is the eligibility criteria for a home loan for healthcare workers?
The eligibility criteria for a home loan for healthcare workers will vary depending on the lender. However, some common criteria include:
- You must be an Australian Citizen or Permanent Resident.
- Be employed as a healthcare worker in a qualified profession. This includes doctors, registered nurses, midwives, dentists, pharmacists, and other allied health professionals.
- Have a good credit history.
- Be able to afford the monthly repayments on the loan.
- Meet the lender’s credit requirements.
Some lenders may also have additional requirements, such as a minimum income requirement or a requirement to be employed in a certain location.
If you are unsure whether you are eligible for a home loan for healthcare workers, it is best to speak to a mortgage broker. Our team can help you to assess your eligibility and find the right home loan for your needs.
Which medical professionals qualify for waived LMI?
Different medical practitioners may be eligible for waived LMI (lenders’ mortgage insurance), but the specific criteria can vary from one lender to another.
If you are one of the below then most likely you are qualified for medico loans:
According to data from Westpac, a $90k per year minimum income is needed for these professions (casual income calculated over 48 weeks), with a maximum LVR of 90%:
- Audiologist
- Chiropractor
- Midwife
- Occupational Therapist
- Osteopath
- Physiotherapist
- Podiatrist
- Psychologist
- Registered Nurse
- Radiographer
- Sonographer
- Speech Pathologist
- Optometrists
- Pharmacists
- Veterinary Practitioners
If your profession falls under one of the below categories then there is no requirement for a minimum income. You are eligible for a maximum LVR of 95%.
- Dentist
- General Practitioners
- Hospital-employed Doctors (Intern, Resident, Registrar, Staff Specialist)
- Medical Specialists (as per the Medical Board of Australia)
How to apply for a home loan for healthcare workers?
To apply for a home loan for healthcare workers, you will need to follow these steps:
- Choose a lender. There are a number of lenders that offer home loans for healthcare workers. You should compare offers from multiple lenders to get the best possible interest rate and terms. You may also want to consider speaking to a mortgage broker to get expert advice on the best home loan for your needs.
- Gather your documents. You will need to provide the lender with a range of documentation, including:
- Proof of income, such as your payslips or tax returns.
- Proof of employment, such as a letter from your employer.
- Proof of identity, such as your driver’s licence or passport.
- Proof of address, such as a utility bill or bank statement.
- A deposit statement.
- Complete the loan application. The lender will provide you with a loan application form to complete. You will need to provide information about your income, employment, expenses, and assets. You will also need to sign a declaration of your financial position.
- Submit your application. After you’ve completed the loan application form and gathered all of the required documentation, you can submit your application to the lender.
- Get pre-approved. Once the lender has received your application, they will assess your eligibility and provide you with a pre-approval. This will tell you how much money you are able to borrow and the interest rate that you will be offered.
- Find a property. Once you have pre-approval, you can start looking for a property to buy. You should keep in mind that your pre-approval will only be valid for a certain period of time, typically 3-6 months.
- Make an offer. After finding a property that you want to buy, you can make an offer to the seller. If your offer is accepted, you will need to sign a contract of sale, following advice from your conveyancer.
- Get final approval. Once you have signed a contract of sale, you will need to get final approval for your loan. The lender will assess the property to make sure that it is a good security for the loan.
- Settle the loan. Congratulations, the lender has approved your loan! Now you can settle the loan and take ownership of the property.
Here are some additional tips for applying for a home loan for healthcare workers:
- Make sure that you have a good credit history. Lenders will check your credit history to assess your risk. A good credit history will help you to qualify for a loan and get a better interest rate.
- Get your finances in order. Before you apply for a loan, it is important to get your finances in order. This includes reducing your debt and saving as much money as possible for a deposit.
- Be honest and upfront with the lender. When you are applying for a loan, it is important to be honest and upfront with the lender about your financial situation. This will help them to assess your eligibility and provide you with the best possible loan offer.
