As a doctor, you will be able to access special low interest rates and other benefits on home loans. To make sure you get the most out of these offers, it is important to know what affects your borrowing power and what steps you can take to maximise it.
Let’s take a closer look at the lending process and borrowing power, then we’ll find out what one of Home Loan Experts’ mortgage specialists can do to help you get the most out of your profession’s favoured status with lenders.
How Is The Home Loan Process Different For Doctors?
Many types of doctors receive benefits and discounts on their home loans that are not available to most other borrowers. Some of these include:
- No Lenders Mortgage Insurance (LMI) on home loans with up to 90% LVR
- Use of 100% of overtime income when assessing your eligibility with some lenders
- Lower interest rates
- Waived home loan application fees and more
Something to note: Doctors need to provide their brokers with their registration certificates to claim the above benefits. Refer to our page on doctor home loans for more details.
How Is My Borrowing Power Assessed?
Like any other home loan, doctor home loans have different processes depending on your individual situation. But the following are the things a lender usually considers while calculating your serviceability:
- Living expenses
- Eligibility for doctor home loans
- Qualification for LMI waiver
- Credit history
Our How Much Can I Borrow Home Loan Calculator can give you an estimate of how much a lender will give you. Or let our specialist brokers do it for you by giving us a call on 1300 889 743 or filling our online enquiry form.
Increasing Your Borrowing Power
Here are some of the ways you can get lenders to increase the amount you can borrow.
Choose the right lender (the multi-lender strategy)
A multi-lender strategy can help you move up the property ladder. It works this way: You begin with the cheapest lender for your first few properties, then use lenders that are slightly higher priced but offer more borrowing power to get the next few properties. This allows you to take advantage of the most money available to you each step along the way.
Stay On Top Of Repayments
Keep your credit score healthy by paying all of your bills on time and in full. Any late or missed payments on your credit report can lower the amount a borrower is willing to lend you.
Find Longer Mortgage Terms
Opting for a longer-term mortgage will improve your borrowing power. For example, if you have a $500,000 loan at 6% annual interest, the monthly repayment over 20 years would be calculated at $3,582 a month. But if the mortgage term is 30 years for the same loan, your monthly repayments start at $2,998. However, remember that a longer loan term also means you are signing up to pay substantially more interest over the life of the loan.
Talk to one of our mortgage specialists before you pick a term.
Make A Larger Deposit
Putting down more money as your deposit is one of the best ways to increase your borrowing capacity. Saving for a deposit shows your capacity to make regular loan repayments and may help you get a better interest rate, too.
Keep Credit Health Strong
Take time to check your credit report with rating agencies like Equifax and Illion. Make sure you have cleared any defaults or at least can explain them.
Our Mortgage Brokers Can Help You Maximise Your Borrowing Power
Our Home Loan Experts know how to help you get the most out of your loan.
Here’s an example of how a Home Loan Experts broker was able to help a doctor increase their borrowing power.
Dr. R, a medical professional, along with her partner, Mr. W, reached out to Home Loan Experts to find a lender that would waive LMI at up to 95% LVR.
As an existing client of a major bank, getting a pre-approval wasn’t a problem; however, the couple later decided they wanted a higher loan amount, based on Mr W’s pay rise.
In addition to that, the interest rate they had been pre-approved for was no longer valid, as they had not locked in a fixed rate and the lender had increased the rate it offered.
Our Home Loan Experts solution
When the clients showed dissatisfaction with the increased interest rate, Prakash and his team advised the couple to change to a five-year fixed rate mortgage. After the clients agreed, Prakash sent the loan application back to the bank for formal approval of the change.
How our broker, Prakash, helped Dr R and Mr. W
- Increased their initial borrowing power of $1,833,000 to $1,899,800
- Secured a five-year, fixed rate home loan when the bank’s rates increased
- Got increased loan amount approved from lender using an accountant’s letter verifying client’s pay rise
- Secured the clients a pre-approval, allowing them to search for a property while maintaining their budget
- Suggested locking in their fixed rate, so that rate fluctuations would not affect them
- Got the lender to agree to increase the amount of the loan after already granting a conditional pre-approval. Had the broker not liaised with the lender directly, Dr R would have had to reapply for the home loan.
Use Home Loan Experts As Your Mortgage Guide
Our mortgage brokers at Home Loan Experts have access to home loan deals from over 50 lenders and can help you maximise your borrowing power.
Call us on 1300 889 743 or fill in our free assessment form and we’ll help you find the best deal, while also handling the paperwork.