1 Jul, 2020
If you work in the law industry, you may be eligible for discounts and special rates on your home loan and flexible lending criteria when funding your legal practice.
Lawyers, barristers and solicitors all qualify for discounted rates on their home loan and other legal professionals are taken on a case by case basis. Law professionals can potentially qualify for a home loan of up to 90% of the property value without needing to pay Lenders Mortgage Insurance (LMI).
On top of this, other special terms include higher exposure limits when having multiple investment properties, flexible credit criteria, a higher maximum loan size ($2.7 million against the typical $2 million) and the home loan can either be in the name of a company or trust structure.
Currently, the banks that are offering waived LMI for lawyers and accountants are:
Other professions besides lawyers, solicitors and barristers are also eligible for an LMI waiver (assessed on an individual basis).
These professions include:
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The waived LMI is offered by some lenders, each with their own income criteria and requirements. Generally, you must be earning a minimum of $150,000 per year in NSW, ACT, VIC and QLD. In WA, SA, NT and TAS, the qualifying income is a minimum of $120,000 per year.
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LMI is charged as a fee to the lender when you want to borrow over 80% of the property value. This can quickly add up depending on how much you need to borrow over that 80% threshold. For example, an 90% loan on a $1,000,000 property would mean you have to pay an extra $24,000 for LMI. For those working in the law industry, having LMI waived is very advantageous and can potentially save you tens of thousands of dollars to put towards other expenses.
Most lenders require you to be a member of an industry association. Other industry bodies are also accepted on a case by case basis. Several lenders do not require evidence of any association membership, but they will need a copy of your degree or any evidence you can provide to show you are currently practicing or working in law in order to have LMI waived and get access to other special benefits.
Industry associations include:
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Judges and Magistrates can also be eligible for the LMI waiver but they must meet the same income requirements as lawyers, solicitors and barristers. They must also provide evidence that one or part of their employment conditions means they are prohibited to hold a Practicing Certificate.
Lawyers that work for the state or federal government are eligible to receive the same benefits as lawyers who are privately employed or running their own business. However, most government lawyers often do not meet the minimum income requirements for no LMI loans. Still, it’s essential to note that government lawyers can still be eligible for an interest rate discount.
As a member of the legal profession, lawyers are entitled to a variety of special benefits on their home loan or investment property loan, such as the ones listed above. However, lenders typically don’t tend to advertise these benefits publicly unless asked. As the home loan experts, mortgage brokers are at an advantage to explain what you may or may not be eligible for. They also know which lenders offer LMI savings to legal professionals, and can progress with all the necessary negotiations on your behalf to help cut the cost of LMI.
Many lenders offer packages with home loans for lawyers, solicitors and barristers. These packages offer a number of inclusions, many of which can be tailored and personalised to the individual’s needs. Mortgage brokers have strong working relationships with a wide range of lenders, and have access to all the package offers that can be given to those in the legal profession. They can also negotiate a proper professional package on the borrower’s behalf.
You may run into some restrictions when trying to apply for waived LMI home loan. Some restrictions may include:
If you intend to purchase the property with one or more other borrowers, you will need to hold at least 50% interest in the mortgage. So for example, if there are two borrowers in the home loan, you must have 50% or more ownership interest in the loan as a lawyer.
Words by Joanne Ly
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On the lookout for a home loan? Try contacting an eChoice broker. With access to 100s of mortgage products from over 25 lenders, eChoice brokers have the resources to find YOU the right home loan deal.