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Types of Home Loans for Medical Professionals

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Medical professionals are considered low-risk borrowers by most lenders due to the stable nature of your job. In fact, Medical professionals are eligible for various types of loans. 

However, finding the right loan is as complex as giving a diagnosis. That’s why Excellence Finance has created a quick guide that will help Medical professionals determine the types of loans and which is the best for their requirements. 

Let’s dissect these now, shall we? 

How Many Types of Mortgages Are Available for Medical Professionals? 

There are several home loans for medical professionals. While it means an option is perfect for their needs, selecting the right loan can be overwhelming. Often, it could lead to a wrong decision. Similar to a medical diagnosis, a wrong type of home loan can drastically affect their finances.

What are the Home Loans Commonly Offered to Medical Professionals in Australia? 

Check out the types of loans below. 

Owner-Occupier Home Loans 

The owner-occupier home loans are for borrowers where the property they purchase will be their main residence. It often has lower interest rates compared to other investment property loans. Also known as the stock-standard home loans, you can find several offers in the market from banks and lenders. This is available for both first-time home buyers and a refinancer. 

Guarantor Home Loans 

Some lenders allow guarantors to have your loan approved. The guarantor is usually a close family member like your parents and will take responsibility for making repayments once you cannot fulfil it. This is ideal if a borrower has a lower income than required. 

Investment Home Loans 

As the name suggests, investment home loans are for borrowers looking for a property for investment purposes. For example, they will have the property rented out, or they will get profit once the property’s value increases. 

In most cases, these investment loans have higher interest rates. Apart from that, the eligibility criteria are higher and stricter than those of the owner-occupier home loan borrowers, as investors are high-risk borrowers. . 

Low-Doc Home Loans 

This is an option for those who cannot provide the correct proof of income documents. These include: 

  • Recent payslips 
  • Pay summaries 
  • Rental income statements 
  • Dividends

Low-doc home loans are usually offered with higher interest rates and fees, considering that the lenders are more lenient with their documents. 

Reverse Mortgages 

Reverse mortgages are ideal for people with huge assets but are poor in cash. In most cases, these are offered for 60 years old and above. 

They don’t have to make repayments while they are still living in the property. However, the interest is charged on the balance. If they sell the home or pass away, their loan will have to be repaid in full together with the interest. 

Bridging Loans 

The bridging loan can help those who are transitioning from selling their old homes to buying a new one. You can consider this an additional loan on top of your current one, wherein you can utilise the money to acquire a new property while the other is being put up in the market. This is usually shorter, a maximum of 12 months. 

Line of Credit Home Loans 

This is the type of loan borrowed against the equity of your home. It is reusable, wherein you can borrow and repay funds until you reach your credit limit. Think of it as a credit card, but with lower rates. You may use it for home renovation and repairs.

Construction Loans 

These are perfect if you plan to build a new home from the ground up or do a major renovation. It covers the expenses during the construction process and the payments are made at every stage. Prepare for higher interest rates. Below are the following stages: 

  • Deposit – Beginning of the construction 
  • Base – Completion of concrete slab or footings 
  • Frame – Approved house frame 
  • Lockup – Doors, windows, brickwork, insulation, roofing 
  • Fixing – Appliances, kitchen cupboards, toilet 
  • Completion – Fencing, clean up  

Refinance Home Loans 

With a refinancing, you can get a new loan with a lower interest rate. This can save you hundreds of dollars in the long run. But before you sign any refinance home loan agreement, understand the entirety of the contract. You must gauge first if you can indeed get savings from it.  

To further understand what type of home loan is perfect for a medical professional, we encourage talking to experts. They can equip you with the right knowledge and assist you with the requirements to fast-track your home loan application.  

 

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