Lawyers, barristers, solicitors, and other legal professionals may qualify for a home loan or investment loan of up to 90% of property value without having to take out Lenders Mortgage Insurance (LMI). You may also be able to borrow more on owner occupied and investment properties.
Other privileges include flexible credit criteria and loan interest discounts not available to the average borrower. Legal professionals may also get loans through a company or a trust. And if you have just graduated, you too may qualify for all these benefits due to your high income potential and excellent career prospects.
Home loan applicants are typically asked to take LMI to qualify for a loan if they have an initial deposit less than 20% of their property value. But LMI premiums don’t come cheap and can add thousands of dollars to the total cost of your loan since the premiums become part of your loan instalment, to be paid over the life of the loan. LMI waivers for lawyers can save you a lot of money over the life of the loan.
Apart from the usual ID and income verification, banks will run various other checks to certify your eligibility.
A copy of your degree and other evidence is required to show you are practicing law or working in a legal capacity at present.
Judges and Magistrates also qualify for LMI waivers and will have to meet the income requirements just like other lawyers, solicitors and barristers. They will be asked to provide evidence that their employment conditions prevent them from holding a Practicing Certificate.
Most lenders will ask you for proof of your membership in a professional or industry association while some lenders may not. The following professional associations are recognised while others may be considered on a case by case basis.
- Australian Corporate Lawyers Association
- Australian Insurance Law Association
- Australian Labour Law Association
- Law Council of Australia
- Law Institute of Victoria
- Law Society of NSW
- Law Society of South Australia
- Queensland Law Society
- The Australian Bar Association
- The Commercial Law Association of Australia
Lenders may ask you for a payment receipt for your annual membership, a current and valid membership card, or written confirmation from the relevant association that you are a member. Some lenders may ask to see a practicing certificate.
Income criteria for LMI waivers can differ by the lender. In general, a minimum annual income of $150,000 is required in NSW, ACT, VIC and QLD while in WA, SA, NT and TAS, the qualifying minimum is $120,000 per year.
You may include any incomes you earn from rental properties in this amount. The income of your spouse cannot be included unless they are also in practice as an eligible legal professional in the capacity of a lawyer, barrister or solicitor.
Lawyers that work in government may not meet the income criteria for LMI waivers purely on their employment income. However, they can qualify with other incomes such as rental income and spousal income, if the spouse is also a practicing lawyer. Regardless, they will still be eligible for interest rate discounts and other benefits given to other lawyers.
Can LMI be waived on investment property?
As a lawyer you are considered a low-risk borrower. So loans to expand your property investment portfolio also come with LMI waivers similar to your first home loan.
Should you go with a professional package?
Professional packages are an option for you if you plan to borrow more than $250,000 and are interested in investment properties and other banking products and services including credit cards, bank accounts, etc.
Professional packages come with a single annual fee — ranging from $300 to $750 — that covers the entire portfolio of services you wish to use. Before making the decision, compare this fee against the total fees you would end up paying if you were to take each of the different banking products separately.
LMI waiver for lawyers with overseas qualifications
Lawyers with an overseas qualification are required to undergo special training and obtain membership of a professional association before they can practice law in Australia. Lawyers from some countries, such as the UK may not need that training.
LMI waivers for overseas qualified lawyers may not be automatic and you may have to work with an experienced mortgage broker who can help convince lenders to waive the LMI, especially until you get professional membership.
Consider working with a mortgage broker
Mortgage brokers work with many lenders and have access to hundreds of loan products. They can help you find the most advantageous deals after comparing interest rates, closing costs, product features and payment terms.
You can schedule a meeting with a mortgage broker at a time that suits you with our broker finder service.