105% No Deposit Home Loans For Doctors

The Story

After graduating with a double medical degree, Dr Clarence moved from the UK to Australia in 2016 and established a medical clinic with her husband.

She specialized in dermatology and also provided GP services and maternity services.

Her partner worked as the director of the company and received a salary and shared 40% of the profits.

They were currently renting an apartment paying $5,000 per month, but they had found a property that they were keen on, which was priced at $1.1 million.

Since their combined annual income was around $300,000 (after-tax), they thought that banks and lenders would be happy to take them on as a client.

The couple wanted to start investing in real estate and build their property portfolio.

She thought they checked all the boxes for a waived LMI home loan and she had a good credit score too.

Little did she know that lenders looked more closely at the couple’s income.

The Problem

Despite being a high-income earner working as a specialist doctor, Dr Clarence had not saved enough deposit for her home loan.

She had spent her savings on:

• Lending $140,000 to her sister to support her education and also to help a best friend who was in a difficult situation as the friend was waiting for the inheritance to be released.
• She invested a lot in her professional development and had just completed her second degree. She had taken out a student loan in the UK to fund her studies. She paid off the mortgage within the first two years of working in Australia, which was over $90,000.
• The relocation from the UK to Australia was not smooth. She was without work for two months as she needed time to settle things. She used her savings to fund the relocation.

Furthermore, her family’s living expenses including rent were quite high, and it totalled over $10,000 per month.

She had enquired with BOQ and CBA, but they could not offer her want she wanted.

The Solution

Undeterred, Dr Clarence searched online for a solution to her unique situation, and she found Home Loan Experts.

She filled in the assessment form and was connected with Mohit Lal Pradhan, a young mortgage broker who had risen to become one of the ‘Young Guns’ in Australia. It is an award which honours the top 30 young superstar brokers.

During the pre-assessment, Mohit noted that their income tax returns for 2017 was not as strong as 2018.

In 2017, the clients had invested in capital assets for their clinic, which led to lower taxable incomes.

While assessing the income for self-employed clients, lenders tend to take an average of two years’ income or take 120% of the lower year’s income.

Some lenders might also only use the lowest income of the last two years.

However, Mohit found a lender who only looked at their most recent year’s income.

Moreover, Dr Clarence was also making monthly payments of $5,000 on her $55,000 ATO Debt.

The ATO Debt was cleared off to help with servicing.

The timely repayments on her existing liabilities and rent was a good indicator to lenders that Dr Clarence and her husband were committed to making timely repayments on the home loan.

After talking with the clients, they agreed to cut down on their living expenses and were able to meet the bank’s serviceability calculation.

Loan structure

Furthermore, as the property address was considered a medium risk location, Mohit split the loan 80:20 instead of the usual 90:10.

80% of the loan was a standard home loan with an interest rate of 3.79% p.a., while the remaining 20% was a specialist cash flow loan with an interest rate of 5.95% p.a. and a loan term of 10 years.

A 105% waived LMI home loan at a competitive interest rate was just what the doctor ordered.

Dr Clarence and her husband gladly signed the loan offer documents, and as an added bonus, the loan repayments (P&I) were $5,100 monthly, which almost equalled their rent payments!

A Happy Ending

Dr Clarence and her family have already moved into their new home.

Our brokers specialise in doctor home loans and can help clients like Dr Clarence get the amount they need with the LMI waived.

Are you looking for a waived LMI home loan?

Give us a call on 1300 889 743 or fill in our free online assessment form to find out if you can qualify for a waived LMI home loan.