LMI Waived Loans in Melbourne

Understanding LMI Waived Loans

Lenders Mortgage Insurance (LMI) – a type of insurance that protects lenders if you fail to pay off your loan – is usually required when your deposit is less than 20% of the property’s value. This can amount to thousands of dollars, significantly increasing your expenses. However, if you’re eligible for an LMI waiver, you can skip this payment.

Benefits of a No LMI Home Loan

Choosing a loan with waived LMI comes with several benefits for eligible borrowers. Here’s how it can work in your favour:

Significant Cost Savings and Increased Budget Flexibility

One of the biggest advantages of an LMI waived loan is the potential to save a huge amount of money. LMI can often reach tens of thousands, especially if you’re borrowing a high percentage of the property’s value. By not having to pay LMI, you can keep that money or use it towards other costs, like home improvements. Also, saving on LMI can provide you with extra funds that might improve your overall financial flexibility, letting you consider homes that might have been otherwise outside your reach but are still within your lender’s policies on LMI waivers.

Reduced Borrowing Costs and Faster Market Entry

With LMI waived, you can avoid the lengthy wait to save a huge deposit. This not only significantly lowers your initial expenses but also lets you quickly and confidently make offers when you find the right property.

Borrowers Eligible for LMI Waivers

LMI waivers are primarily available to specific groups of borrowers that lenders consider low-risk:

Professionals

Some professions are viewed by lenders as low-risk due to their high earning potential and job security, making them prime candidates for LMI waivers.

• Doctors, Dentists, and Other Medical Professionals: Under these professions, you may be able to borrow up to 90-100% of the property’s value with an LMI waiver for health professionals. To qualify, you’ll typically need to be part of an industry organisation, such as the Australian Medical Association (AMA), and work in a preferred medical field like dentistry, veterinary medicine, or pharmacy.
• Accountants and Legal Professionals: If you’re an accountant, lawyer, barrister, or auditor, you might qualify for waived LMI on loans generally up to 90% of the property value, with loan limits varying by lender. Being a member of a relevant industry organisation can boost your eligibility for this benefit.
• Professional Athletes and Entertainment Industry Professionals: Some lenders may consider offering LMI waivers to athletes and entertainment professionals. However, eligibility is typically subject to strict conditions, such as having an accredited manager or agent and a stable income source.

First Home Buyers with a Guarantor

When purchasing your first house, a first home buyer LMI waiver can make a significant difference in your upfront costs. If you have a guarantor – usually a close relative who owns property in Australia – you may be able to borrow up to 100% or even 105% of the property’s value, covering both the purchase price and stamp duty. This option allows you to avoid LMI and eliminates the need for a deposit. However, keep in mind that the exact borrowing limit can depend on the lender’s policies.

Considerations and Requirements of LMI Waived Loans

While LMI waived loans offer significant benefits, there are some key considerations to keep in mind to ensure you meet the criteria and make the most of this opportunity:

Proof of Profession

Lenders usually require evidence of profession to grant LMI waivers, especially for those in fields like medicine, law, or accounting. This proof can include your membership in relevant industry organisations, such as the AMA for doctors or the Certified Practising Accountant (CPA) Australia for accountants. It’s important to have this documentation ready, as it demonstrates your profession’s stability and reduces the lender’s perceived risk.

Income and Employment Criteria

For many lenders, a strong employment record and consistent income can boost your chances of getting an LMI waiver. Professionals, like doctors, may not have a minimum income requirement when getting an LMI waived home loan for healthcare workers in Australia. Others, such as accountants and lawyers, might need to meet certain income thresholds. Lenders will also look at your employment history to assess your financial stability.

Loan Size Limits

LMI waivers often come with specific loan size limits that vary depending on your profession. For example, doctors may be eligible for waived LMI on loans up to $4.5 million, while other professionals might have different limits, varying significantly between lenders. Understanding these limits is crucial when planning your property purchase, as exceeding them could mean paying LMI.

Property Location

When exploring properties, it’s essential to consider how the location might impact your loan options, as lenders might have stricter requirements for properties located in high-risk areas, such as rural or non-metro regions. Since location can affect the property’s value stability, some lenders may impose conditions or limit the loan-to-value ratio (LVR) for these areas, even if you’re eligible for an LMI discount.

Loan Options with Waived LMI

There are several options available if you’re seeking LMI waived loans:

90% Loan with No LMI

This allows you to borrow up to 90% of the property’s value without paying LMI, providing a great opportunity if you want to keep your deposit small. You don’t need to belong to a specific profession to qualify, but you must have a solid employment and credit history. Self-employed? No worries! Lenders may accept a minimum of 6 months of Business Activity Statements (BAS) and bank statements if you don’t have complete tax records. This flexibility can be a game-changer for those looking to invest in property without being burdened by LMI costs.

85% Loan with No LMI and No Guarantor

With this loan, you can borrow up to 85% of the property’s value without needing a guarantor. However, lenders typically require a flawless credit history to qualify. This option is best suited for properties located in major metropolitan areas, as lenders often restrict this loan to ensure the property maintains its value. It’s an excellent choice for those who have a strong financial profile but want to avoid the hassle of involving a guarantor.

105% Loan with No LMI (Guarantor Loan)

If you have a family member willing to be your guarantor, you might be able to borrow up to 100% of the property purchase price plus additional costs like stamp duty. Your guarantor must own property in Australia, but there are no restrictions on your profession. It’s a practical way to enter the property market sooner.

Government Schemes with LMI Waivers for First Home Buyers

If you’re a first home buyer looking to avoid the added cost of LMI, there are several government schemes that can help you. Here’s what you need to know:

First Home Guarantee (FHBG)

The First Home Guarantee is a scheme that allows you to purchase a home with as little as a 5% deposit. The government acts as a guarantor, reducing the lender’s risk, which means you can avoid paying LMI. There are a limited number of spots available each year, so it’s essential to plan and apply early if you’re interested.

Regional First Home Buyer Guarantee (RFHBG)

This scheme is similar to the First Home Guarantee but specifically tailored for those looking to buy in regional areas of Australia. If you’re planning to settle outside the major cities, the Regional First Home Buyer Guarantee can help you purchase a property with just a 5% deposit, eliminating the need for LMI.

Get Expert Advice to Find the Best LMI Waived Loans

Finding lenders that offer LMI discounts can be challenging, as not all banks or financial institutions provide this option. Each lender has its own eligibility criteria, which is why working with experienced mortgage brokers is crucial. At Trusted Finance Solutions, we specialise in navigating the complexities of LMI waivers, whether it’s for home loans for doctors, home loans for lawyers, home loans for accountants, or home loans for engineers. We help you identify the lenders that match your unique needs and offer the most competitive interest rates.

Securing an LMI waiver can be a game-changer, saving thousands on your property purchase. Whether you’re a professional in a recognised field or a first home buyer with a guarantor, we can help you determine your eligibility for LMI savings and guide you through your options. We’re here to simplify your home buying journey, making it more cost-effective and stress-free.

Wondering how to get started? Contact us today, and let’s get you closer to owning your dream home in Moonee Ponds or Melbourne.

Why Use Our Brokers Instead of Going Directly to Your Bank?

Choose Trusted Finance Solutions to receive a tailored loan that aligns perfectly with your current and future financial goals, thanks to our personalised assessment and expertise. Unlike banks, we prioritise your financial well-being and navigate the complexities to ensure you get the best deal available.

With Trusted Finance Solutions:

• Thorough Assessment: We thoroughly assess your situation to provide a comprehensive lending solution.
• Future Consideration: Our brokers consider both your current needs and future goals.
• Personal Representation: Our brokers liaise on your behalf to secure a loan through a bank or lender.
• Policy Navigation: We navigate Australian banks and lenders’ various policies and loan requirements.
• Best Possible Loan: We ensure you receive the best possible loan tailored to your unique requirements.

Applying Directly to a Lender:

• Quantity Over Quality: Many banks prioritise meeting quotas over your financial future.
• Limited Options: Lenders can only offer a limited range of loan products.
• Complex Policies: The complexity of mortgage applications means even bank staff may not fully understand their own policies, leading to delays or unnecessary declines.