Specialist medical loans – not so special?
Are you a medical professional seeking finance? Some lenders offer special deals for those in the medical industry, such as doctors, physiotherapists and dentists, among others. But are these exclusive loans all they’re cracked up to be?
A wide variety of lenders offer special rates and fee packages for medical professionals, including GPs, specialists, surgeons, vets, physiotherapists and dentists, among others.
While some of these deals might seem great, it’s important to examine the lending requirements and structures more closely before signing on the dotted line.
Cross collateralisation risks
Some lenders will require such special loans to be cross collateralised, which can tie you to a particular lender and restrict your lending capacity in the future.
This might not be specified upfront, so it pays to ask, and the lender may require security over your business.
This can create problems when it comes time to review your loan, and in the event that one of your properties underperforms, you may not be able to secure finance again or could even be forced to sell your property.
No LMI loans
Some lenders also offer a ‘no lenders mortgage insurance loan’, which can be an advantage for some borrowers and help them purchase their property sooner.
However, in some cases, the total cost of the loan over the period of time (including rates, charges etc) is higher than the saving, meaning it’s not a better option in the long term.
One 100% loan – or is it?
There are also 100% loans on offer to medical professionals, meaning you’ll require no deposit or lenders mortgage insurance.
In some instances this can actually be 2 loans though, consisting of an 80% loan with one lender and a 20% loan with a second lender. The second loan is usually at a higher rate though (presently about 8%).
In these circumstances it may be better to save a 10% deposit and apply for a 90% loan – with no lenders mortgage insurance – rather than pay the extra costs.
Obtaining a specialist package can be beneficial, but it’s essential to compare your options and understand the fine print before committing.
A good finance broker will be able to assist you with this, and recommend packages that suit your individual circumstances and work for you now and into the future.