LMI Waiver for Teachers in Australia

LMI Waiver for Teachers: Get a No LMI Home Loan [Up to 90% LVR]

Are you a teacher seeking to sign a new home under your name? Read this guide on LMI waiver for teachers… it might just save you thousands on your upcoming home loan.

Becoming a homeowner is a huge milestone, and for many of us, it can feel like a bit of a stretch. The rising cost of property and the need to save for a hefty deposit make the dream of homeownership seem out of reach.

But here’s the good news–you can take advantage of the LMI waiver, which could make the whole process a lot easier and more affordable.

Click here to speak to one of our mortgage brokers today to find out if you can waiver LMI as a teacher.

What Is Lender’s Mortgage Insurance (LMI)?

Lender’s Mortgage Insurance (LMI) is a type of insurance in the home loan market. Essentially, a lender takes out LMI to protect itself in case the borrower is unable to repay the home loan.

That means if you default on your loan and the property is sold, LMI covers the lender for any shortfall between the sale price and the remaining loan balance. And keep in mind that LMI only covers the lender, not the borrower.

Who Pays the LMI Premium?

Although LMI protects the lender, the premium is charged to the borrower as a fee. This fee is paid along with the loan; either added to the loan amount or paid upfront.

The cost of LMI is 1-5% of your home loan amount, depending on your loan-to-value ratio (LVR). Lenders also calculate LMI cost using other various factors.

While 1-5% may not seem like a lot, LMI certainly isn’t cheap as it can add thousands to the cost of your home loan! That’s why an LMI waiver for teachers makes all the difference when you’re in need of a home loan.

How It Helps the Borrower

When you apply for a loan, the lender assesses the risk associated with lending you money. If you do not have a considerable deposit (20% in Australia), your loan might be considered a higher risk.

To mitigate this risk, some lenders require LMI. 

But how does it help you? You can still get a home loan even if you have a smaller deposit. This helps first-time homebuyers or those with less savings purchase a home sooner.

LMI Waiver for Teachers: Eligibility, Income Requirements, Employment Stability, and How to Apply

Teachers and educators in Australia are eligible for LMI waivers and other discounts on home loans. Some lenders offer home loans at up to 90% Loan-to-Value Ratio (LVR) without LMI. That’s a great relief, right?

So, keep reading if you work as a permanent employee in one of these:

• High school teacher

• Preschool/kindergarten teacher

• Primary school teacher

• Specialist teacher

• Student studying teaching

• TAFE lecturer

• Teacher at a government or private school

• Trainer working in the education space in some professional capacity

• Tutor

• University lecturer or professor

Even if you are a casual teacher, lenders will still consider your home loan application as long as certain conditions are met (more on that below.)

Eligibility Criteria for LMI Waiver for Teachers

To qualify for such no LMI loans, you have to fulfill the eligibility criteria set by the lenders:

• Australian Citizenship or Permanent Residency

• Must be at least 18 years old

• Borrowing of less than $1 million

• Buying a property that is established and within a metro area

• A clean credit file with a high score

• Stable employment

Income Requirements To Get LMI Waiver for Teachers

Your normal base salary and supporting documents like salary slips and bank statements are the first things that lenders will look at.

Other than that, to solidify your income potential, you may submit one or both of these applicable items:

• Higher Duties Allowance (HDA): Lenders will take 100% of the HDA as income if you can give a letter from your employer confirming that the HDA is ongoing and appears on at least 2 recent payslips.

• Overtime: Accepted only if it’s ongoing and appears on your last 2 months’ payslips. Lenders only use a part of this amount for income calculation (usually 80% of overtime income.)

Employment Stability To Get LMI Waiver for Teachers

Permanent teachers are usually required to be active in their current role for at least 6-12 months.

As for casual or part-time teachers, a consistent employment history of at least 3-6 months is required, backed by payslips for at least 3 months in the current year.

Depending on the lender, you may also be required to submit an employment letter from your employer, confirming your current position, duration of employment, and salary details.

How to Apply for No LMI Home Loan as a Teacher?

To apply for a home loan with an LMI waiver for teachers, we would highly recommend a professional mortgage broker to help you weigh and navigate the myriad of options you have.

Not all lenders provide an LMI waiver for teachers, so you have to find those select lenders that will help you out.

Summary

Cutting down on hefty LMI costs is a huge deal for many of us. And being able to do that means you’re well on your way to securing your dream home sooner than you thought!

That’s why lenders that provide LMI waivers for teachers are of great help. You get to save thousands of dollars and you get to purchase a new home under your name. That’s the dream, right?

And working with the right mortgage broker can make all the difference here. If you want the best deal, you need someone like us to connect you with select lenders that offer LMI waiver for teachers.

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