Note: Due to the COVID-19 pandemic, lenders have reduced the maximum loan amount available with waived LMI. Please contact us for more information.
What income types are acceptable?
Getting your home loan approved as a self-employed doctor depends on your employment type:
- Standard employment
- Contracting via an ABN
- Contracting as an employee
- Medical partnerships
- Profit share / commissions
- Depending on your situation, you may still qualify for exclusive interest rate discounts and avoid the cost of Lenders Mortgage Insurance (LMI) when borrowing up to 100% of the property value.
Our mortgage brokers are specialists in helping doctors with unique income types to not just get approved but to qualify for exclusive home loan discounts not available to the general public.
Call us on 1300 889 743 or fill in our online enquiry form to find out if you qualify for a self employed doctor home loan.
What discounts are available?
Doctors have access to two main discounts that aren’t readily available to other professions:
- Waived LMI (Lenders Mortgage Insurance) when borrowing up to 100% of the property value.
- Discounted interest rates when borrowing at a higher amount.
As a general rule, if you’re borrowing over 80% of the property value, your focus should be on avoiding mortgage insurance.
If your loan has been paid down to below 80% then it’s about finding a low interest rate and a loan that otherwise meets your long term objectives.
Contracting via an ABN
Many doctors have their own Australian Business Number (ABN) and then act as an independent contractor with one or more practices.
Typically, the income evidence we need is:
- Your last 3 months invoices.
- Your last 3 months bank statements.
- Any contracts with the practice(s) you work with
- Tax returns if you have them available (optional)
We can then calculate your income by deducing GST, annualising your income and then taking 46 weeks to allow for 4 weeks holiday and 2 weeks sick leave.
So, as a general rule, if you earn $1,000 per week including GST, this would mean an assessable income of $41,818 p.a.
You can effectively get your weekly income inc GST and multiply it by 41.8 to find your assessable income for a home loan application.
Not all lenders accept this method of calculating your income. Many will require two years tax returns instead which may not be a true reflection of your current income.
Call us on 1300 889 743 or complete our free assessment form to discover if you qualify for doctor home loan discounts.
Contracting as an employee
Fixed term contracts and employment agency work can be very lucrative to doctors, particularly for specialists with skills in high demand.
To submit your applicatio, we’ll typicall ask for more documents than the lender actually requires.
We’ll then pick and choose the best way to present your application based on your needs, borrowing power and the documents you can provide.
In most cases, we ask for:
- Two recent payslips
- A copy of your contract
- (Optional) Evidence of prior work on a similar income
We have some lenders that can accept doctors or GPs on contracts with a fixed term of 3 months or less with no option to renew.
This could either be with a private practice or a public hospital.
We just need to present your application in the right way and mitigate the risks to the bank with additional information and good credit notes.
Medical partnerships are often formed by groups of doctors of the same profession who want to share the overheads of running a practice together.
In particular we often see this structure with radiologists.
Many lenders get confused because of the complex nature of the income and the income being a mix of wages and distributions from a partnership.
What documents will we need?
- Two years personal tax returns
- Two years partnership tax returns
- Alternative options are available
In many cases, a doctor earns enough from their salary from the partnership such that we don’t need to prove any of the partnership income at all.
In these cases, we may just get an accountant’s letter to confirm the partnership is trading profitably and then ignore its income and liabilities.
Partnership income can be complex.
In many cases, the last years tax returns are not a true reflection of your current income so we instead look at a variety of alternative methods of income verification to get your mortgage approved.
Profit share / commission income
For example, it may be that in a particular month they bill $50,000 and get paid 40% or $20,000 for the month.
This structure is most common with doctors that hold an ABN but can also be for PAYG employees.
What documents will we need?
- 3 months invoices or a payslip with a 3 month YTD income
- (Optional) A copy of your contract
- (Optional) Your tax returns
The exact documents we will require will depend on the nature of how you are paid.
What types of doctors can we help?
- Cardio Thoracic Surgeon
- Cardiothoracic Surgeon
- Clinical Pharmacologist
- Cosmetic Surgeon
- Dental Specialist
- Ear and Throat Surgeon
- Emergency Doctor
- Emergency Medicine Specialist
- Emergency Surgeon
- Gastro Intestinal Surgeon (Upper/Lower)
- General Practitioner (GP)
- General Surgeon
- GP Registrar
- Heart Doctor
- Heart Surgeon
- Hospital-employed doctors including interns, residents, registrars and staff specialists
- Maxillofacial Surgeon
- Medical Administrator
- Medical Practitioner
- Medical Registrar
- Oral and Maxillofacial Surgeon
- Oral Surgeon
- Orthopaedic Registrars
- Orthopaedic Surgeon
- Paediatric Surgeon (Neonatal/Perinatal)
- Paediatric Surgeo (Neonatal/perinatal)
- Plastic Surgeon
- Radiation Oncologist
- Reconstructive Surgeon
- Resident Medical Officer
- Respiratory Surgeon
- Respiratory/Thoracic Surgeon
- Specialist Physician
- Surgical Registrar
- Thoracic Surgeon
- Vascular Surgeon
We’re experts in helping self employed doctors, GPs and other medical professionals who have trouble proving their income with banks.
Call us on 1300 889 743 or fill in our free assessment form and we can help you qualify!