Getting a home loan can be confusing, time-consuming, and stressful. But, as a lawyer, there is good news. Banks and lenders assess legal professionals differently than they do the average person.
Why is this?
Put simply, legal professionals are considered by lenders as having a low-risk profile. This is because there is a higher level of job security and steady pay increase than almost all other industries, with more than half of legal practitioners receiving increases at or above CPI year on year*.
So, what are the advantages for lawyers?
Most notably, the ability to borrow up to 90 per cent of property value without having to pay Lenders Mortgage Insurance (LMI) or use a parental guarantee. LMI is an additional upfront fee that is typically charged when borrowing an amount greater than 80 per cent of the property value. For a property at the median Sydney house price of $1M value, this can amount to over $20,000. That is a lot of money better kept in your pocket.
This benefit applies to both owner-occupied and investment properties, so is advantageous regardless of where you may currently be on the property ladder.
In addition, many lenders also have legal-specific credit policies that may allow you to borrow a higher amount sooner.
What if I’m looking to borrow less than 80 per cent?
Still great news. If you’re in a good financial position and are looking to borrow less than 80 per cent of the value of a property, you can access discounted interest rates. This can be considerably lower than standard rates charged by the banks.
This also applies to refinancing your existing mortgage.
You may be missing out on privileged loan rates on your current home loan. As a lawyer, you’re able to refinance up to 90% of property value in order to release equity in the form of cash out should you need it. Say, to purchase your next property or for that dream bathroom renovation you have been waiting to do.
How do I qualify?
As long as you have a practicing certificate and a membership with one of Australia’s key industry associations. As a member of the Law Society of NSW, you are highly likely to qualify for these exemptions.
Ok, so how do I know which bank to go to?
Financial institutions often do not advertise these lawyer-specific credit policies, and it can be tricky to navigate access to them by going straight to the bank. To ensure the best possible result for your unique financial situation, speaking to a knowledgeable broker can make a world of difference.
A broker is a third party that will organise your loan application from sourcing to settlement. A broker is not tied to any specific bank or lender, and therefore acts as your advocate in finding you the loan best suited to your unique situation.
Legal Home Loans are Australia’s only mortgage and finance broking firm that specialise in lending to lawyers. As a Law Society of NSW member, you receive $500 cashback upon settlement of your first loan with us. Apply to refinance your home loan by 30 June 2021 and receive an additional $500 cashback upon settlement – that’s a total of $1,000 back in your pocket.
*Australasian Legal Practice Management Association Annual Salary & HR Issues Survey 2015-2020