Greg is a senior registrar in Cardiology and like the majority of people in his field, he has worked exceptionally hard over the last ten years. Studying didn’t come easily to him; however, he was determined to get into a field where he could improve the lives of many, hence why he chose Cardiology as a specialty.
Greg, in his final registrar year, is finally earning a strong income of just over $230,000 p.a. and enjoying the lifestyle this affords. A few years ago, he met his long-term partner Andrea who is a newly qualified lawyer earning $85,000 p.a.
With a combined annual income of $315,000, they decide it’s time to find a place with more space than their rented shoebox apartment. A place to call home, where they can entertain friends and maybe even buy a dog or cat to live with them. Since moving in together a year ago, they’ve been able to set aside a decent deposit while paying off most of their HELP debts.
Can they afford an inner-city suburban home, in a good school-zone, with a backyard and be close to transport?
Getting their dream home comes down to…
Being clear on their goal
Greg’s medical tax accountant had mentioned in the past that they could introduce him to a mortgage broker for doctors should he ever want to discuss his options. He had no experience using a broker, so he asked for a meeting to be scheduled.
During the meeting, the medical broker discussed Greg and Andrea’s goals and identified what was most important to them. Purchasing a family home was key and ideally a home that could accommodate a child in the future.
Getting help from a medical broker to crunch the numbers
After looking at their current position, the amount they were able to borrow was better than expected, however they didn’t hold the required savings to cover a standard 20% deposit. The medical broker advised this wasn’t a problem and that they had several options available to them. They could consider lenders who offer up to 90% or 95% of the security property without charging lenders mortgage insurance. There was also the option to use the support of a guarantor with sufficient equity. Alternatively, they could hit pause until they were able to build further savings.
After going through the details with the medical broker to understand how each option worked in more detail, they decided to progress with a loan up to 95% of the property value. They also committed to cutting back on spending to save additional funds to help cover the associated costs they would incur.
Just like with a wedding, there are always additional costs to allow for including stamp duty, transfer fees, conveyancer costs, building inspection, small improvements, moving costs, and new furniture, the list goes on!
Landing approval for their dream home
Greg and Andrea sought pre-approval for a loan of $1,710,000 from a lender who offered lending up to 95% for medical professionals without incurring LMI (lenders mortgage insurance).
The couple had $180,000 in savings which was just enough to cover a 10% deposit. While the couple planned to borrow 95% of the purchase price, that doesn’t change the fact that a vendor would want a 10% deposit at the time they purchased. This meant they only had to save a little bit more to cover the additional costs such as stamp duty, transfer of land and conveyancer costs.
Greg and Andrea were able to purchase a home that ticked all their boxes. They were guided throughout the process by a specialist in the field and understood what was required to reach their goal. Now the money coming out of their account was going towards paying off their own asset, not someone else’s.
To understand your options to reach your goal more effectively, we recommend speaking with a DPM accountant or a mortgage broker. Click here if you’d like to arrange a no-obligation chat with a Consultant from the DPM Lending team.
Disclaimer: This information has been provided by DPM Lending Pty Ltd ACL number 374850 and is general in nature so it may not be right for your personal circumstances. DPM Financial Services recommends you obtain advice concerning specific matters before making a decision.