If you shuffle between important meetings at work and are responsible for making big decisions, then the odds are, you’re working in a professional capacity. And if this is the case, you could stand to save tends of thousands of dollars when you decide to buy your next home or investment property.
A professional home loan package can save you a significant amount off the cost of your loan. Why? Because lenders want to attract low risk borrowers and high-income earners, so they offer special features and rates that aren’t always available to the general public.
Could you qualify for a professional home loan package and what are the benefits?
Who is considered a professional?
Professional home loan packages were once restricted to medical professionals, lawyers and accountants, but now they are available to all sorts of people with sufficient income and assets. Teachers, nurses, defense force personnel, scientists and engineers are among the most widely recognised professions.
Interest rate discounts
People who qualify for a professional home loan package are eligible for a discount of up to 1% p.a. interest on variable rate loans and 0.25% p.a. interest on fixed rate loans. On a loan worth $600,000, a 1% annual rate discount equates to $6,000 annually in interest savings.
This is where the savings can really add up. Many professionals who work in recognised industries can qualify for waived Lenders Mortgage Insurance (LMI) for up to 85% LVR, instead of the standard 80%. Furthermore, medical, finance, legal and select mining professionals can qualify for waived LMI up to 90% LVR, provided you belong to an industry association, and meet income requirements and certain financial/property criteria as well. Borrowers can save $5-10,000 in LMI costs alone, on a $500,000 property with a mortgage of $450,000.
Reduction of fees
It is becoming more and more common foe lenders to waive application fees on professional home loan packages, leading to a saving of $500 to $800. In addition, they offer reduced fees and interest rates when bundling different products like transaction accounts, credit cards and insurance policies together in exchange for your loyalty. This offers you yet another chance to lock in savings of several hundred to several thousand dollars.
Often, professionals who qualify for a professional package get the benefit of flexibility in their home loan. Offset accounts are usually set up to enable borrowers to pay their loan off quicker and redraw when necessary. You may also have the option of making additional payments without penalty.
At MAP Home Loans, we have developed strong relationships with various lenders who have a range of options tailored to professionals. If you’re ready to buy and you want to save money on your home loan, call us today on 1300 397 387 to discuss your options.