Are there any interest only doctor loan with no LMI?

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Gonzalez99
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Joined: Tue Mar 27, 2018 1:47 pm

Are there any interest only doctor loan with no LMI?

Postby Gonzalez99 » Mon Jun 11, 2018 12:45 pm

Hi Home Loan Experts.

I’m a chiropractor and I am working at Royal Melbourne hospital. I’m planning to invest in a property because it's been suggested that prices have dropped compared to previous years.

I’m looking to buy a property in the range of $1 mil and have almost $150,000 saved up. I’m also looking to invest in shares and other assets, so I want to borrow as much as I can and repay interest only or the time being. Will lenders approve an interest only doctor home loan?

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Otto Dargan
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Re: Are there any interest only doctor loan with no LMI?

Postby Otto Dargan » Mon Jun 11, 2018 2:04 pm

Hi Gonzalez99. Welcome to the forums.

Yes, we can assist you with an interest only doctor home loan as long as the property you're purchasing is for investment purposes, not to live in.

Banks rarely approve an interest only term for properties that the borrower plans to live in. You can read more about how interest only loans work here. Some lenders offer 90% no LMI for chiropractors and other discounts including significantly reduced interest rates and fee waivers

You can save literally thousands of dollars by avoiding the cost of Lenders Mortgage Insurance (LMI)!

By getting an LMI waiver and paying interest only mortgage repayments, you're essentially retaining more of your cash flow for future investments you plan to undertake.

Also, because of your professional status, banks are willing to go above their standard mortgage exposure limits so you can purchase a number of real estate assets quickly. That's if you get sick of buying shares!

To learn more about interest only doctor loans, you can speak with one of our mortgage brokers on 1300 889 743 or complete our free online assessment form.

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

Gonzalez99
Posts: 9
Joined: Tue Mar 27, 2018 1:47 pm

Re: Are there any interest only doctor loan with no LMI?

Postby Gonzalez99 » Mon Jun 11, 2018 3:31 pm

Thanks for that. I have gathered the benefits of interest only loan. Could you explain to me the disadvantages interest only loans so I can make an informed decision?

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Otto Dargan
Mortgage Specialist
Posts: 7021
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
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Re: Are there any interest only doctor loan with no LMI?

Postby Otto Dargan » Mon Jun 11, 2018 7:59 pm

Hi Gonzalez99,

It’s a good thing to compare alternatives when making a decision. These could be summed up as the downsides of an interest-only loan.
  • Lower borrowing power: Most lenders have restricted interest only (IO) loans to 80% of the property value (some up to 90%). However, you can potentially borrow up to 95% or even 105% with a guarantor by choosing principal and interest (P&I).
  • Higher interest rates: Making interest only repayments makes you an increased risk than a borrower making P&I repayments, so banks will often charge you higher interest rates.
  • You’re not paying off the loan: Although the size of your repayments will be smaller, you’re only paying off the interest portion on loan. You may have a tough time once the interest-only period ends and you have to start making large principal and interest payments.
  • Sudden repayment increase: Interest only loan terms are usually for five years, after which your repayments will switch to P&I and you could be caught by surprise.
  • It’s tough to refinance: Extending your interest-only period with your lender is tough. Also, getting approved for a P&I refinance is a lot easier compared to IO loan.
  • You’re building equity slowly: A strong market will see the value of your property continue to grow. While P&I allows you to maximise this equity growth and avoid negative equity by further reducing your principal, IO repayments won’t allow you such advantage.
You could try our IO or P&I calculator to work out the costs of just paying interest only and whether it makes sense for your long-term financial goals.

You can also discuss things directly with one of our specialist mortgage brokers by calling us on 1300 889 743 or by filling in our free assessment form and know which lenders provide interest-only doctor loans.

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

Gonzalez99
Posts: 9
Joined: Tue Mar 27, 2018 1:47 pm

Re: Are there any interest only doctor loan with no LMI?

Postby Gonzalez99 » Mon Jun 11, 2018 8:35 pm

I’m glad you pointed everything out before asking me to contact you. I’ll browse through your website for now and contact you guys later on. Have a nice day.


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