Would I qualify for a discount on my home loan?

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Kubuki
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Joined: Fri Jul 26, 2013 7:02 pm

Would I qualify for a discount on my home loan?

Post by Kubuki »

Hi home loan experts!
I am thinking about buying a two-bedroom apartment in South Sydney. The property is worth around $600,000. I need a home loan to complete the purchase. I am an optometrist and I make about $65,000 a year. A friend of mine had recently bought a house and he had borrowed around 90% from the bank for this. The weird thing is that he didn’t have to pay LMI on his loan. Actually, he too is an optometrist like me.

What I want to know is if I too could get a similar discount on my home loan. So can I?

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Otto Dargan
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Re: Would I qualify for a discount on my home loan?

Post by Otto Dargan »

Hi and welcome to the forums Kubuki,

Some lenders can offer a home loan discount to borrowers who are optometrist.

This means that like your friend, you may also qualify for a waived LMI and be able to borrow up to 90% of the property value. Beside this, you may also be entitled to a special interest rates discount on your loan.

The percentage of the interest rate discount may depend on the following factors:
  • The amount that you need to borrow.
  • If the LMI is waived on your loan.
  • If you are a member of the Optometrists Association Australia (OAA).
Currently, two of the lenders are offering to waive the LMI for optometrists and other medical professionals. This means that you may be able to borrow up to 90% of $600,000 i.e. $540,000 and not have to have to for the LMI.

Cheers,
Otto
Otto Dargan
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P | 1300 889 743
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Kubuki
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Joined: Fri Jul 26, 2013 7:02 pm

Re: Would I qualify for a discount on my home loan?

Post by Kubuki »

Well, what percentages of discount do banks usually offer on the interest rate? I mean, is it 1%, 2% or higher than that?

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Otto Dargan
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Re: Would I qualify for a discount on my home loan?

Post by Otto Dargan »

Hi Kubuki,

Some of the possible discounts you may be able to obtain with the help of the brokers are as follows:
  • 1.00% discount for loans over $250,000.
  • 1.10% discount for loans over $500,000.
  • 1.10% to 1.15% discount for loans over $1,000,000.
  • 1.15% or more discount for loans over $1,500,000.
  • If you are planning to borrow more than $2,500,000 then other discount rates may also be negotiated. This however may be on a case by case basis.
The percentages of discount can vary according to the loan amount, among other things. Therefore, please keep in mind the above rates should be used as a guide only and the real percentage may differ.

If you would like to know more about these then you can check out our website. We can also be reached on 1300 889 743 or you can fill in our free assessment form to see if you qualify for a loan or not.

Cheers,
Otto
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

Kubuki
Posts: 42
Joined: Fri Jul 26, 2013 7:02 pm

Re: Would I qualify for a discount on my home loan?

Post by Kubuki »

Oh okay, doesn’t sound bad at all. Thanks for your answers Otto! Much appreciated. :)

Bruce
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Joined: Thu Jun 20, 2013 6:21 pm

Re: Would I qualify for a discount on my home loan?

Post by Bruce »

Hello brokers, I too am an optometrist and I was going through this forum thread. Actually I want to know a bit about LMI. I’m not really sure what this means. Can you tell me a bit about this please?

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Otto Dargan
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Re: Would I qualify for a discount on my home loan?

Post by Otto Dargan »

Hi Bruce,

LMI (Lenders Mortgage Insurance) is a one time, non-refundable fee charged by the lenders. This amount is usually taken out of the borrower’s loan funds before it is advanced to their bank account.

To get an understanding of how LMI works, let’s say you have borrowed $600,000 and your LMI premium is $6,000. Now you will only get $594,000 when your loan is advanced. If you want to get the full loan amount then you can choose to get your LMI capitalized. In such case, the LMI fee will be added on top of your loan. Suppose you wanted to borrow $600,000 and your LMI fee was $6,000 then you can capitalize your LMI and increase your total loan amount to $606,000. This means that when your loan is advanced, you will get $600,000.

You are usually required to pay this fee when borrowing more than 80% of the purchase price. However, if you are seen as a low risk borrower then the lender may waive this requirement entirely. For example, as an optometrist you can be eligible and borrow up to 90% of the property value and have your LMI waived.

Cheers,
Otto
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

Bruce
Posts: 34
Joined: Thu Jun 20, 2013 6:21 pm

Re: Would I qualify for a discount on my home loan?

Post by Bruce »

Well, I will call you up to confirm if it will be possible for me to have my LMI waived. By the way, thanks for providing explanation on LMI. Cheers!

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