Fletcher Rowe | September 18 2017
At the end of the day, the only thing banks think about when handing out money is minimising the risk to them in doing so.
Banks have a list of preferred borrowers and occupations, and there is no prize for guessing that Doctors are atop that list.
Generally revered by the public, bank assessors are no different; the medical elite are considered low risk, high return customers who, like a fine wine, only improve with age. Practitioners’ incomes tend to increase significantly with age and experience, and become highly likely to continue borrowing deep into life through further investments and business loans.
They also have the lowest repayment default rates of any employment sector.
It’s only fitting that years of hard work and dedicating their lives to the health of others sees them rewarded for their hard work in the form of favourable lending policy.
Special deals are out there if you know where to look – promisingly, these deals are not just limited to those bearing the title of medical doctor.
Dentists, veterinarians, optometrists, pharmacists and physiotherapists are also eligible to apply via certain lenders.
What is the benefit of a Medico Package?
The biggest benefit for HCPs is the discount on Lenders Mortgage Insurance (LMI). LMI is a type of insurance for borrowers who have not saved up a large enough deposit. Generally, your bank wants to see you save up a deposit of 20% or more of the purchase price, or else they will charge you LMI on top of your loan, which could prove a very expensive (and not always accounted for) cost of owning property.
For medicos, banks will accept a smaller deposit of only 10% of purchase price, and waive this LMI premium. On a $1,000,000 property, this is a saving of almost $25,000. Further, banks tend to look at applicants under the medico profile more favourably, increasing the likelihood of loan approval and offering a larger borrowing capacity.
They are also eligible for increased discounts on their home loan interest rate. In fact, all medical professionals listed above should be wondering why they aren’t on a below market rate if this isn’t the case.
People under the medico umbrella are able to apply as co-borrowers with their partner, even if they do not share a relevant role in the medical industry.
Applicants can also take advantage of the benefits to help purchase their own home or an investment property.
Banks are also willing to extend their finance offer to include medical equipment, recognising the benefit to your practice and the treatment of your patients.
Medico Packages are only offered by a select panel of lenders, and it is important to speak to someone who understands their policies to maximise the benefit to you. Finding a trusted mortgage adviser is just as paramount as speaking to a healthcare professional to get the best advice for you.
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