Why do lawyers get special treatment when applying for a home loan?
Applying for a home loan can be confusing, time-consuming and stressful. But as a lawyer, there is good news for you! Banks and lenders assess legal professionals differently than they do the average person.
Why is this?
Simply put, legal professionals are considered low risk by lenders. This is because there is a higher level of job security than most other industries, and historically a very high rate of meeting mortgage repayments. Therefore, they are more willing to offer certain benefits to you.
What are these benefits for lawyers?
Most notably, the ability to buy with a 10% deposit without having to pay Lenders Mortgage Insurance (LMI) or use a parental guarantor. Lenders Mortgage Insurance (LMI) is a one-off insurance fee that’s added to your home loan if you borrow more than 80% of the property value. The purpose of LMI is to protect the lender from financial loss if the borrower can’t afford to meet their home loan repayments.
For a property at the median Sydney house price of $1.5M value, this can amount to over $20,000 in LMI. That’s a huge amount of money that you could avoid!
This benefit is applicable to both owner-occupied and investment properties, so is beneficial regardless of where you may currently be on the property ladder.
In addition to this, 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%?
Even better news. If you’re in a strong financial position and are looking to borrow less than 80% of the value of a property, you could access discounted interest rates. This can be considerably lower than standard rates charged by banks.
This also applies to refinancing your existing mortgage.
As a lawyer, you’re able to refinance up to 90% of property value to release equity in the form of cash out should you need it. Say, to purchase your next property or for that dream kitchen renovation you have been waiting to do.
What do I need to access these benefits?
If you hold a legal practising certificate, you are likely to qualify for these exemptions.
Plus, if you’re a member of any of the following organisations, you’ll receive $500 cashback when settling your loan via Legal Home Loans due to partnerships we have in place. You can learn more about member benefits here.
- The Law Society of NSW
- Law Institute of Victoria
- Victorian Bar Association
- The Law Society of Western Australia
- ACT Bar Association
What difference does it make if I go for a mortgage broker vs. bank?
Financial institutions often do not train branch staff on or advertise these lawyer-specific credit policies, so it can be tricky to access them by going straight to the bank. Policies also vary from lender to lender. To ensure you get the best possible result for your financial situation, speaking to a knowledgeable broker can make a world of difference.
Mortgage brokers can offer you far more options than a bank, which allows you to snap up the best deal possible. A good broker will guide you through every step of the loan process and will regularly assess your mortgage to see if the rates you are getting are still competitive, something banks are not obliged to do. Working with a broker can save you time and effort during the application process, and potentially a lot of money over the life of the loan.
Want to access exclusive benefits on your home loan? To find out if you’re eligible, speak to us today.
Disclaimer: Eligibility will depend on your unique situation. To find out what is possible for your needs, please contact us and speak to our specialists for a tailored solution. This page provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances.