Doctor buying a home - need a loan from the bank

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captainjacksparrow
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Joined: Fri Jul 19, 2013 2:45 am

Doctor buying a home - need a loan from the bank

Post by captainjacksparrow »

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Both my wife and I are medical doctors working in Perth. We are both dentists and share a practice. We only lease the space for our clinic but we do own the unit that we live in.

Recently we have been thinking of putting our money towards investing in property. We have looked at a few properties nearby which we think would be easy to rent out.

When we bought our current home we were able to get discounts on our loan and we were wondering if this has changed or not since we would still like to borrow most of the money from the bank to help cover the purchase costs.

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Otto Dargan
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Re: Doctor buying a home - need a loan from the bank

Post by Otto Dargan »

Hi and welcome to the forums captainjacksparrow,

Although some lenders have withdrawn their packages for doctors you can still get a discount on your home loan if you apply with the right lender.

Since I am not aware of when you bought your first home please let me walk you through the current situation.

As it was before, lenders still prefer borrowers who are medical doctors due to their track record of being low risk borrowers with high incomes. They are also known to have the lowest default rate in the industry.

You can opt to either waive your LMI fee or get a discount on your interest rate depending on your loan amount.

For example if you are borrowing over 80% LVR then you would be required to pay an LMI fee. In this case you can apply with a lender who is willing to waive the fee for you. If you are borrowing less than 80% then you will not be required to pay an LMI fee in the first place so you can find a lender who can give you a discount on your interest rate.

To get your LMI waived you would have to make sure that you meet the following criteria:
  • Your loan amount is less than $4.5 million
  • Your LVR is less than 90% - sometimes you may be able to borrow more than this
  • You have to be a member of the relevant industry organisation
  • You have to be on the list of preferred medical professionals
Lenders will also favour medical doctors who are purchasing a commercial property. Someone who is not a doctor would usually only be allowed to borrow up to 75% or 80% of the property value however doctors can even get up to 100% from lenders to invest in a medical centre.

Regardless you will still need to have a strong financial background with a good income and savings to get approved.

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

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captainjacksparrow
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Re: Doctor buying a home - need a loan from the bank

Post by captainjacksparrow »

Okay can also you tell us which specialists are preferred and the organisations as well?

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Otto Dargan
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Re: Doctor buying a home - need a loan from the bank

Post by Otto Dargan »

captainjacksparrow,

The list of preferred medical doctors preferred are as follows:
  • Anaesthetist
  • Cardio Thoracic Surgeon
  • Cardiologist
  • Chiropractor
  • Clinical Pharmacologist
  • Cosmetic Surgeon
  • Dentist
  • Dermatologist
  • Ear and Throat Surgeon
  • Emergency Surgeon
  • Endocrinologist
  • Gastro Intestinal Surgeon (Upper/Lower)
  • Gastroenterologist
  • General Practitioner
  • General Surgeon
  • Gynaecologist
  • Haematologist
  • Hepatologist
  • Immunologist
  • Nephrologist
  • Neurosurgeon
  • Neurologist
  • Obstetrician
  • Oncologist
  • Opthalmologist
  • Optometrist
  • Oral and Maxillofacial Surgeon
  • Orthopaedic Surgeon
  • Otolaryngologist
  • Paediatric Surgeon (Neonatal/Perinatal)
  • Pathologist
  • Pharmacist
  • Physiotherapist
  • Plastic Surgeon
  • Psychiatrist
  • Radiologist
  • Reconstructive Surgeon
  • Respiratory/Thoracic Surgeon
  • Rheumatologist
  • Urologist
  • Vascular Surgeon
  • Veterinarian
The list of associations that you need to be a member of are as follows:
  • Australian Veterinary Business Association
  • Australian Association of Practice Managers
  • Australian Veterinary Association
  • Australian Dental Association (ADA)
  • Australian Medical Association (AMA)
  • Royal Australasian College of Surgeons (RACS)
  • Royal Australasian College of Physicians (RACP)
  • Optometrists Association
  • Urological Society of Australia and New Zealand
  • Australian College of Cosmetic Surgery
  • Other associations on a case by case basis
Cheers,
Otto
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

Halle
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Joined: Thu Jul 25, 2013 6:57 pm

Re: Doctor buying a home - need a loan from the bank

Post by Halle »

Hi, also a doctor thinking of investing in some real estate. Obviously I have no idea what I’m doing because I don’t even know what LMI stands for.. and LVR too!

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Otto Dargan
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Re: Doctor buying a home - need a loan from the bank

Post by Otto Dargan »

Hi halle,

LVR or Loan to Value Ratio is basically the percentage of the property that you wish to borrow. You can calculate this for your home loan by dividing your loan amount by the total property value.

For example if you want to borrow $500,000 and the property value is $600,000 then your LVR would be 83.33%

In Australia lenders consider loans of 80% LVR and above as risky loans. For this they usually charge a fee known as LMI or Lenders Mortgage Insurance. This is a one-time, non-refundable fee that is paid when your loan is advanced. Usually the amount is deducted from your loan funds once your loan has been settled. This means that you will only be receiving the amount you had applied to borrow minus the LMI fee.

The higher your LVR is, the higher your LMI will be as well. As a doctor however, you can still find lenders who will waive this fee for you.

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

Halle
Posts: 48
Joined: Thu Jul 25, 2013 6:57 pm

Re: Doctor buying a home - need a loan from the bank

Post by Halle »

Thanks, that sounds good. But what about non-doctors? My brother-in-law also wants to apply for a home loan and we were thinking of going to the same bank.

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Otto Dargan
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Re: Doctor buying a home - need a loan from the bank

Post by Otto Dargan »

Hi halle,

Your brother may not have to pay an LMI fee if he is an accountant, lawyer or engineer and meets the following requirements:
  • The loan amount is less than $2 million
  • The loan amount is less than 90% LVR
  • He is a member of the relevant industry organisation
  • His income is over $150,000 per annum or he will be earning a similar amount soon
  • (In the case of an engineer) he works in the mining and resource sector
If he wants to, he can contact us on 1300 889 743 or send us an enquiry and we can find a lender who can give him the best rates.

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

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