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In Australia, pharmacists are considered as being at a lower risk of not repaying their home loans and therefore, can get more flexible home loan options.

While lenders may not offer pharmacist-specific home loan programs, you may be eligible for discounts on interest rates or a waiver on Lender’s Mortgage Insurance (LMI) waiver when you borrow up to 90 per cent of the property value.

These offers generally depend on your income and credit history. It would be smart to compare several lenders or consult a mortgage broker to find the best deal for you.

As a pharmacist, what home loan deals can I expect?

For pharmacists, home loans in Australia may not be as tailor-made as for some other professions. However, as one of the many medical professionals seen as a lower risk by lenders, you can expect some flexibility in terms of home loan options. Some of the options you may be offered by lenders include: 

  • LMI Waivers: Pharmacists are generally considered low-risk borrowers that are unlikely to default on a home loan. For this reason, you may qualify for a waiver on LMI, which covers the lender if a borrower defaults on a loan. LMI is typically applied when you want to borrow more than 80 per cent of the property’s value, but as a pharmacist, you may not be required to pay it. However, lenders may only allow a loan of up to 90 per cent when offering this LMI waiver.
  • Lower Interest Rate: Another advantage of being considered a low-risk borrower is that pharmacists may be eligible for discounted home loan interest rates. These could be significantly lower than the standard variable rate. The exact discount on the interest rate will depend on the lender, the loan amount and your borrowing power.
  • Higher Loan Amount: Even when offering loans to low-risk borrowers, lenders set strict limits on the maximum loan amount. This limit may be much higher for low-risk borrowers such as pharmacists and other medical professionals. This can be particularly useful if you’re planning to buy an investment property rather than as an owner-occupier.

Another benefit is that even if you are a new pharmacist, you may get a home loan approved more easily than your counterparts in other professions. As a new pharmacist, you may also be able to apply for a guarantor home loan. This is if you can ask someone, like your parents, to take responsibility for the home loan amount.

If you qualify for a guarantor home loan, you can potentially avoid paying any deposit, speeding up the home buying process. Most lenders offer these deals to pharmacists buying a new home to live in, property investments or refinancing existing mortgages. 

How can pharmacists qualify for special home loan deals?

Different lenders have different eligibility criteria for the various home loan deals available to pharmacists. These usually don’t include a minimum income threshold for you, the borrower. Lenders may ask you to show one or all of the following:

  • You’re registered with the Pharmacy Board of Australia
  • Are employed full-time as a pharmacist
  • You’re membership to either the Australian Pharmacy Council, the Australian Medical Association, or other reputed professional organisations

You’ll still need to meet standard home loan criteria such as a good credit rating, with no repayment issues reported on your file, and few other outstanding debts.

You should check what lenders eligibility requirements are for specific discounts. For instance, lenders may prefer approving loans with a 20 per cent deposit. But they could be comfortable with a smaller deposit of 15 per cent if you have an excellent credit rating and no previous loan repayment issues. If you’re unable to pay the 20 per cent deposit, some lenders may accept a guarantor for just that part of your home loan. 

LMI waivers for home loans up to 90 per cent may be available to any full-time pharmacist registered with or a member of an industry body. If you don’t qualify for a full LMI waiver, you may get a discount if you can show you’ve been working as a pharmacist with the same employer for over two years. A good employment history may also strengthen your chances of getting a better deal on interest rates. 

If you’re a consultant or a self-employed pharmacist, lenders may be less willing to approve your home loan application. Or they may ask you to submit more documentation before they approve your application. As a self-employed pharmacist, you may not have payslips which to submit as proof of income which means you’ll need to submit your tax returns instead. In this case, lenders typically ask you for at least two years of tax returns along with notices of assessment.

They may not always consider the taxable income shown on your most recent tax return as your income. They may instead use their calculations to estimate your income. Some lenders also ask for additional documents such as an accountant’s letter and business or personal financial statements. 

If you’re refinancing your current home loan, you should compare the home loan terms and the eligibility requirements of lenders. Whether that’s your current lender or potential new lenders. You may get a lower interest when you switch lenders. Still, your existing lender may offer to match the rate without the hassle of changing lenders. Comparing home loans from multiple lenders often helps you get a better deal, even if you choose to stay with your current lender.

As a pharmacist, can I get a cheap home loan?

While pharmacists may often get LMI waivers or lower interest rates, there are other options to help you keep your home loan costs low. The simplest option is to borrow only as much as you can realistically afford to repay, which is generally all a lender will offer you. You can calculate how much this is by looking at what you have left from your pay after you’ve paid your bills, personal and household expenses and saved for emergencies. This leftover amount is realistically the maximum you can use to repay your home loan and will be considered your borrowing power by a lender. You can use a borrowing power calculator to help with these calculations.

If the leftover amount isn’t significant, lenders may suggest that you borrow a lesser amount and save a higher deposit. This may take you longer to save due to the limitations on what you can set aside from your monthly income. You can also check whether you are eligible for a guarantor loan, either for the entire value of your home or just to cover the deposit. With the borrowing flexibility available to you as a member of the medical profession, such options may not be too hard to find.

Some lenders may offer interest-only home loans. These involve repaying just the interest for a set period and then switching to repaying both the principal and interest later. While such an option may help you budget your home loan repayments, it may come with a higher interest rate. You can also keep an eye on the market to see if you can get a lower interest rate from another lender, in which case you can refinance the loan and end up paying less. Even if you don’t switch to another lender, you may be able to negotiate with your current lender to get the reduced interest rate.

You should also review your credit history and any other outstanding debts before applying for a home loan. Many lenders recommend cancelling any credit cards that you’re no longer using to reduce the estimated debt you need to clear. Even if you haven’t made any purchases using the card, it may still negatively impact your application. If your credit rating took a hit because you’ve had payment issues in the past for, say a utility bill, you might want to take steps to improve your credit score first. These steps can help you to negotiate better terms for your home loan. 

Home loans are a long term debt which means that the longer you have them, the more you are likely to pay, due to interest accruing on the principal of the loan. If you anticipate either a pay rise or having extra money in the family income, consider extra repayments or altering the repayment frequency. This will help you repay the home loan sooner and therefore save you on interest in the long term. For instance, if you make monthly repayments, but your circumstances allow you to make weekly or fortnightly payments, you may end up repaying your loan faster. Similarly, if you receive bonuses, you could use them to repay your loan and help finalise the loan sooner.

Many of these considerations can be addressed even before you sign the loan agreement.  By researching the various loan options available, you can find out which lenders offer the options most suitable for you. You can compare different home loan offers online and choose the home loan offering your desired loan amount at a competitive interest rate. Speaking to a mortgage broker may also help you identify the right home loan and the right lender. If you consult a mortgage broker, you can elaborate on your personal and financial situation to get reliable advice that caters specifically to you.

How does consulting a mortgage broker help a pharmacist?

When comparing offers from different home loan lenders online, you may see advice that’s generally meant for pharmacists. Such information may not be entirely useful for you if it doesn’t apply to your specific circumstances. For instance, you could be a locum pharmacist working a flexible number of hours every week, which might still make you a fair amount of money.

Sadly, to lenders, this can be seen as unstable employment. They may ask you to submit additional documentation and even then only approve a smaller home loan amount or charge you higher interest rates.

You can avoid difficult negotiations, like the one above, by taking advantage of a mortgage broker’s experience of dealing with various lenders. These licensed industry professionals are trained to review your financial profile and guide you through the process of applying for a home loan.

They can suggest which lenders might view your application favourably and offer you the most suitable deals. You can discuss any of the deals available with a mortgage broker to gauge if there are any additional conditions you need to fulfil. If you want, the broker can advise you through every step of the process to the settlement of your property purchase.

An example of how a broker can help is if you’re hoping to borrow 90 per cent of the property value without needing to pay for LMI. A mortgage broker can identify different lenders that will offer you this loan and can help you understand the different offers. They will also consider factors such as interest rate, loan duration, and documentation required. You may also benefit from a broker's ability to negotiate with the lender of your choice.

This will help you get you a better interest rate or faster pre-approval on your home loan. You can also ask the mortgage broker about their preferred lenders so you can be confident you are getting advice genuinely tailored for you.

Find out how a mortgage broker can help

Frequently asked questions

Can I get a home loan if I am on an employment contract?

Some lenders will allow you to apply for a mortgage if you are a contractor or freelancer. However, many lenders prefer you to be in a permanent, ongoing role, because a more stable income means you’re more likely to keep up with your repayments.

If you’re a contractor, freelancer, or are otherwise self-employed, it may still be possible to apply for a low-doc home loan, as these mortgages require less specific proof of income.

How do I apply for a home improvement loan?

When you want to renovate your home, you may need to take out a loan to cover the costs. You could apply for a home improvement loan, which is a personal loan that you use to cover the costs of your home renovations. There is no difference between applying for this type of home improvement loan and applying for a standard personal loan. It would be best to check and compare the features, fees and details of the loan before applying. 

Besides taking out a home improvement loan, you could also:

  1. Use the equity in your house: Equity is the difference between your property’s value and the amount you still owe on your home loan. You may be able to access this equity by refinancing your home loan and then using it to finance your home improvement.  Speak with your lender or a mortgage broker about accessing your equity.
  2. Utilise the redraw facility of your home loan: Check whether the existing home loan has a redraw facility. A redraw facility allows you to access additional funds you’ve repaid into your home loan. Some lenders offer this on variable rate home loans but not on fixed. If this option is available to you, contact your lender to discuss how to access it.
  3. Apply for a construction loan: A construction loan is typically used when constructing a new property but can also be used as a home renovation loan. You may find that a construction loan is a suitable option as it enables you to draw funds as your renovation project progresses. You can compare construction home loans online or speak to a mortgage broker about taking out such a loan.
  4. Look into government grants: Check whether there are any government grants offered when you need the funds and whether you qualify. Initiatives like the HomeBuilder Grant were offered by the Federal Government for a limited period until April 2021. They could help fund your renovations either in full or just partially.  

Can I take a personal loan after a home loan?

Are you struggling to pay the deposit for your dream home? A personal loan can help you pay the deposit. The question that may arise in your mind is can I take a home loan after a personal loan, or can you take a personal loan at the same time as a home loan, as it is. The answer is that, yes, provided you can meet the general eligibility criteria for both a personal loan and a home loan, your application should be approved. Those eligibility criteria may include:

  • Higher-income to show repayment capability for both the loans
  • Clear credit history with no delays in bill payments or defaults on debts
  • Zero or minimal current outstanding debt
  • Some amount of savings
  • Proven rent history will be positively perceived by the lenders

A personal loan after or during a home loan may impact serviceability, however, as the numbers can seriously add up. Every loan you avail of increases your monthly installments and the amount you use to repay the personal loan will be considered to lower the money available for the repayment of your home loan.

As to whether you can get a personal loan after your home loan, the answer is a very likely "yes", though it does come with a caveat: as long as you can show sufficient income to repay both the loans on time, you should be able to get that personal loan approved. A personal loan can also help to improve your credit score showing financial discipline and responsibility, which may benefit you with more favorable terms for your home loan.

How much deposit do I need for a home loan from ANZ?

Like other mortgage lenders, ANZ often prefers a home loan deposit of 20 per cent or more of the property value when you’re applying for a home loan. It may be possible to get a home loan with a smaller deposit of 10 per cent or even 5 per cent, but there are a few reasons to consider saving a larger deposit if possible:

  • A larger deposit tells a lender that you’re a great saver, which could help increase the chances of your home loan application getting approved.
  • The more money you pay as a deposit, the less you’ll have to borrow in your home loan. This could mean paying off your loan sooner, and being charged less total interest.
  • If your deposit is less than 20 per cent of the property value, you might incur additional costs, such as Lenders Mortgage Insurance (LMI).

Can you borrow the deposit for a home loan?

Most lenders will want the majority of your home loan deposit to be made up of ‘genuine savings’ which is income earned from your job. While a small number of lenders may let you use a personal loan or a credit card to help cover the cost of your deposit, this may potentially cost you more in interest, and put your finances at higher risk.

If you haven’t saved a full deposit, it may be possible to effectively borrow the deposit for a mortgage with the help of a guarantor. This is usually a parent of other family member who guarantees your mortgage with the equity in their own property.

It may also be possible to borrow the money for a home loan deposit from a family member (e.g. the Bank of Mum & Dad) or a friend, provided you draw up a formal legal agreement to pay this money back, showing your mortgage lender that you’re taking responsibility.

Can I get a NAB home loan on casual employment?

While many lenders consider casual employees as high-risk borrowers because of their fluctuating incomes, there are a few specialist lenders, such as NAB, which may provide home loans to individuals employed on a casual basis. A NAB home loan for casual employment is essentially a low doc home loan specifically designed to help casually employed individuals who may be unable to provide standard financial documents. However, since such loans are deemed high risk compared to regular home loans, you could be charged higher rates and receive lower maximum LVRs (Loan to Value Ratio, which is the loan amount you can borrow against the value of the property).

While applying for a home loan as a casual employee, you will likely be asked to demonstrate that you've been working steadily and might need to provide group certificates for the last two years. It is at the lender’s discretion to pick either of the two group certificates and consider that to be your income. If you’ve not had the same job for several years, providing proof of income could be a bit of a challenge for you. In this scenario, some lenders may rely on your year to date (YTD) income, and instead calculate your yearly income from that.

How do you determine which home loan rates/products I’m shown?

When you check your home loan rate, you’ll supply some basic information about your current loan, including the amount owing on your mortgage and your current interest rate.

We’ll compare this information to the home loan options in the RateCity database and show you which home loan products you may be eligible to apply for.

 

Can I get a home renovation loan with bad credit?

If you're looking for funds to pay for repairs or renovations to your home, but you have a low credit score, you need to carefully consider your options. If you already have a mortgage, a good starting point is to check whether you can redraw money from that. You could also consider applying for a new home loan. 

Before taking out a new loan, it’s good to note that lenders are likely to charge higher interest rates on home repair loans for bad credit customers. Alternatively, they may be willing to lend you a smaller amount than a standard loan. You may also face some challenges with getting your home renovation loan application approved. If you do run into trouble, you can speak to your lender and ask whether they would be willing to approve your application if you have a guarantor or co-signer. You should also explain the reasons behind your bad credit rating and the steps that you’re taking to improve it. 

Consulting a financial advisor or mortgage broker can help you understand your options and make the right choice.

How do you qualify for a CBA home loan with casual employment?

Qualifying for a home loan without a full-time job may be challenging, but it can be done. The first step is to understand how a CBA home loan is assessed when you have casual employment.

Most lenders will assess your expenses and savings while checking your loan eligibility, checking on factors crucial to home loan approval, such as if your bills are paid on time and what your credit score presently looks like. 

Your income can be one of the most critical factors to determine your final approved home loan amount. As such, you’ll need to provide payslip copies to lenders to assist them in assessing your income during the loan tenure, regardless of your employment status, full-time, part-time, or otherwise.

Casual employees will want to be casually employed for at least 12 months to be eligible for a home loan. Alternatively, you want to have worked as a permanent casual worker (working for a fixed number of hours per week) for at least one month, or you should have been in your current job for a minimum of three months (if the hours are irregular) to be eligible for the loan.

What is a secured home loan?

When the lender creates a mortgage on your property, they’re offering you a secured home loan. It means you’re offering the property as security to the lender who holds this security against the risk of default or any delays in home loan repayments. Suppose you’re unable to repay the loan. In this case, the lender can take ownership of your property and sell it to recover any outstanding funds you owe. The lender retains this hold over your property until you repay the entire loan amount.

If you take out a secured home loan, you may be charged a lower interest rate. The amount you can borrow depends on the property’s value and the deposit you can pay upfront. Generally, lenders allow you to borrow between 80 per cent and 90 per cent of the property value as the loan. Often, you’ll need Lenders Mortgage Insurance (LMI) if the deposit is less than 20 per cent of the property value. Lenders will also do a property valuation to ensure you’re borrowing enough to cover the purchase. 

What are the different types of home loan interest rates?

A home loan interest rate is used to calculate how much you’ll pay the lender, usually annually, above the amount you borrow. It’s what the lenders charge you for them lending you money and will impact the total amount you’ll pay over the life of your home loan. 

Having understood what are home loan rates in general, here are the two types you usually have with a home loan:

Fixed rates

These interest rates remain constant for a specific period and are a good option if you’re a first-time buyer or if you’re looking for a fixed monthly repayment. One possible downside of a fixed rate is that it may be higher than a variable rate. Also, you don’t benefit from any lowering of interest rates in the market. On the flip side, if rates go up, your rate won’t change, possibly saving you money.

Variable rates

With variable interest rates, the lender can change them at any time. This change can be based on economic conditions or other reasons. Changes in interest rates could be beneficial if your monthly repayment decreases but can be a problem if it increases. Variable interest rates offer several other benefits often not available with fixed rate home loans like redraw and offset facilities and free extra repayments. 

How long does ANZ take to approve a home loan?

The process of applying for a home loan usually stays the same across all lenders. On the other hand, the time it takes for a lender to approve the home loan differs from lender to lender. When it comes to ANZ, it takes anywhere between 15 to 18 business days to approve a home loan from the day of the application to approval. This timeframe is highly dependent on the credibility and availability of your documentation. You can apply for an ANZ home loan in two ways; a Quick Start home loan application or a full online application.

If you opt for the Quick Start home loan option, you’ll need to fill out a form with basic details. During this stage, you don’t need to add any supporting information. An ANZ representative will then call you within 48 hours. The representative will help take your application forward, including assessing all relevant information, documentation and conducting a credit check.

You can also submit your entire home loan application with ANZ online by filling out a comprehensive form with all the information and documentation needed.

Once ANZ has conducted the preliminary checks, you’ll be informed of the pre-approved amount they’re willing to offer. Based on this amount, you can set a budget for your property search and make sure you stay inside your budget. Pre-approval will last for three months but can be extended by applying with ANZ if you don’t find a property. But it’s best to find a property as soon as possible as ANZ may decide to change the amount if your financial situation changes.

After you find a property and have your offer accepted, ANZ may send an assessor to the property to verify it’s value. If everything is per their terms and conditions, ANZ will finalise your home loan’s approval and release the funds.

Can you remove a cosigner from a home loan?

Taking out a home loan is an act of financial responsibility and a cosigner on a home loan shares that responsibility. For this reason, removing a cosigner from a home loan may not be straightforward. Usually, you can add a cosigner, or become a cosigner, when applying for the home loan. In such a circumstance, the lender may ask you to stipulate the conditions for a cosigner release, which are the terms for removing a cosigner from the home loan. For instance, you may agree that you can remove a cosigner once half the loan amount has been repaid.

However, not stipulating such conditions doesn’t mean it’s impossible to remove a cosigner. If the primary home loan applicant has a sufficiently high credit score and has not delayed any repayments, the lender may be willing to remove the cosigner. You should confirm that doing so doesn’t affect the terms of the loan. If the lender doesn’t agree to remove the cosigner, the primary home loan applicant may have to refinance the loan in order to do so. If there were specific reasons for needing a cosigner and those reasons are still valid, then you may have some challenges with refinancing.

How do I apply for Westpac’s first home buyer loan?

If you’re a first home buyer looking to apply for a home loan with Westpac, they offer an online home loan application. They suggest the application can be completed in about 20 minutes. Based on the information you provide, Westpac will advise you the amount you can borrow and the costs associated with any possible home loan. 

You can use Westpac’s online mortgage calculators to estimate your borrowing power. You can also work out the time it might take to save up for the deposit, and the size of your home loan repayments

When applying for a home loan with Westpac, you’re assigned a home finance manager who can address your concerns and provide information. The manager will also offer guidance on any government grants you may be eligible for. 

What is the average length of a home loan?

Most Aussie lenders offer home loans with a 30-year term, meaning that you should pay back the full loan amount and the interest you owe on the amount in 30 years. 

However, home loans can also have a shorter or longer term. They may be as low as ten years or up to 45 years, depending on the product and lender. 

It’s worth remembering that a longer loan term usually means you’ll end up paying a lot more interest in total, but your scheduled repayments may be more manageable. In contrast, you could opt for a shorter loan term if you are comfortable making large repayments in exchange for paying less interest over the term of the loan.

What are the responsibilities of a mortgage broker?

Mortgage brokers act as the go-between for borrowers looking for a home loan and the lenders offering the loan. They offer personalised advice to help borrowers choose the right home loan for their needs.

In Australia, mortgage brokers are required by law to carry an Australian Credit License (ACL) if they offer credit assistance services. Which is the legal term for guidance regarding the different kinds of credit offered by lenders, including home loan mortgages. They may not need this license if they are working for an aggregator, for instance, as a franchisee. In both these situations, they need to comply with the regulations laid down by the Australian Securities and Investments Commission (ASIC).

These regulations, which are stipulated by Australian legislation, require mortgage brokers to comply with what are called “responsible lending” and “best interest” obligations. Responsible lending obligations mean brokers have to suggest “suitable” home loans. This means loans that you can easily qualify for,  actually meet your needs, and don’t prove unnecessarily challenging for you.

Starting 1 January 2021, mortgage brokers must comply with best interest obligations in addition to responsible lending obligations. These require mortgage brokers to act in the best interest of their customers and also requires them to prioritise their customers’ interests over their own. For instance, a mortgage broker may not recommend a lender who gives them a commission if that lender’s home loan offer does not benefit that particular customer.

How do I refinance my home loan?

Refinancing your home loan can involve a bit of paperwork but if you are moving on to a lower rate, it can save you thousands of dollars in the long-run. The first step is finding another loan on the market that you think will save you money over time or offer features that your current loan does not have. Once you have selected a couple of loans you are interested in, compare them with your current loan to see if you will save money in the long term on interest rates and fees. Remember to factor in any break fees and set up fees when assessing the cost of switching.

Once you have decided on a new loan it is simply a matter of contacting your existing and future lender to get the new loan set up. Beware that some lenders will revert your loan back to a 25 or 30 year term when you refinance which may mean initial lower repayments but may cost you more in the long run.

Who has the best home loan?

Determining who has the ‘best’ home loan really does depend on your own personal circumstances and requirements. It may be tempting to judge a loan merely on the interest rate but there can be added value in the extras on offer, such as offset and redraw facilities, that aren’t available with all low rate loans.

To determine which loan is the best for you, think about whether you would prefer the consistency of a fixed loan or the flexibility and potential benefits of a variable loan. Then determine which features will be necessary throughout the life of your loan. Thirdly, consider how much you are willing to pay in fees for the loan you want. Once you find the perfect combination of these three elements you are on your way to determining the best loan for you. 

Can I change jobs while I am applying for a home loan?

Whether you’re a new borrower or you’re refinancing your home loan, many lenders require you to be in a permanent job with the same employer for at least 6 months before applying for a home loan. Different lenders have different requirements. 

If your work situation changes for any reason while you’re applying for a mortgage, this could reduce your chances of successfully completing the process. Contacting the lender as soon as you know your employment situation is changing may allow you to work something out. 

What are the features of home loans for expats from Westpac?

If you’re an Australian citizen living and working abroad, you can borrow to buy a property in Australia. With a Westpac non-resident home loan, you can borrow up to 80 per cent of the property value to purchase a property whilst living overseas. The minimum loan amount for these loans is $25,000, with a maximum loan term of 30 years.

The interest rates and other fees for Westpac non-resident home loans are the same as regular home loans offered to borrowers living in Australia. You’ll have to submit proof of income, six-month bank statements, an employment letter, and your last two payslips. You may also be required to submit a copy of your passport and visa that shows you’re allowed to live and work abroad.