As a dental hygienist looking to purchase your first property or upgrade your current home, understanding how different property types impact your home loan application is crucial. Property type significantly influences your borrowing capacity, loan to value ratio (LVR), and the interest rate you'll receive from lenders.
Established Houses: The Traditional Choice
Established houses remain the most popular choice among Australian homebuyers and are typically viewed favourably by banks and lenders across Australia. These properties offer several advantages when applying for a home loan:
• Lower deposit requirements, often allowing LVR ratios up to 95%
• Reduced lenders mortgage insurance (LMI) premiums
• More favourable interest rate discounts
• Streamlined application process due to established market values
When calculating home loan repayments for an established house, you'll generally find more home loan options available. Most lenders offer both variable interest rate and fixed interest rate home loan products for these properties.
Units and Apartments: Urban Living Solutions
Units and apartments are increasingly popular, particularly in major Australian cities. However, these property types can present unique considerations for your Home Loan application:
• Some lenders impose restrictions on unit purchases above certain floor levels
• Loan amounts may be capped at lower LVR ratios (typically 80-90%)
• Strata fees and building insurance must be factored into your financial situation
• Body corporate regulations may affect future property value
Despite these considerations, many lenders offer competitive home loan interest rates for unit purchases, and you can still access various Home Loan Rates including variable home loan rates and fixed options.
Townhouses: The Middle Ground
Townhouses often provide the perfect balance between house and unit living. From a lending perspective, they're generally treated similarly to established houses:
• Access to standard loan to value ratios
• Competitive interest rate offerings
• Standard application process requirements
• Potential for offset account benefits
When buying a home in this category, you'll typically find that banks statements requirements and borrowing capacity calculations follow standard procedures.
New Construction and Off-the-Plan Properties
Purchasing new construction or off-the-plan properties requires careful consideration of your home loan structure:
• Progress payment loans may be necessary during construction
• Valuations can be challenging, affecting loan amount approvals
• Some lenders charge higher interest rates for these property types
• Extended settlement periods may impact your financial planning
As a dental hygienist with steady income, you may still qualify for attractive home loan options, but it's essential to understand the additional complexities involved.
Investment Properties vs Owner-Occupied
Whether you're purchasing a property to live in or as an investment significantly affects your home loan terms:
Owner-Occupied Properties:
• Lower interest rates
• Higher available LVR ratios
• Access to government grants and stamp duty concessions
• Priority processing from most lenders
Investment Properties:
• Typically 0.3-0.7% higher interest rates
• Maximum LVR usually capped at 80-90%
• Different tax implications affecting borrowing capacity
• Rental income can be included in serviceability calculations
Rural and Regional Properties
Properties in rural or regional areas may present unique challenges:
• Limited lender appetite in some locations
• Potentially higher interest rates
• More stringent valuation requirements
• Consideration of local property market conditions
However, many dental hygienists working in regional areas find excellent home loan opportunities, particularly with specialist rural lenders.
Getting Pre-Approved for Different Property Types
Regardless of your chosen property type, obtaining Home Loan pre-approval provides several advantages:
• Clear understanding of your borrowing capacity
• Confidence when making offers
• Faster settlement once you find the right property
• Ability to budget accurately for stamp duty and other costs
To get pre-approved, you'll need to provide documentation including recent banks statements, employment verification, and details about your intended property type.
Maximising Your Home Equity Position
Understanding how different property types affect home equity is vital for long-term wealth building. Properties in established areas with strong growth potential typically provide superior equity growth over time.
Consider properties that allow you to add value through renovation or improvement, as this can accelerate your home equity position and provide opportunities for future refinancing at improved rates.
Working with experienced Mortgage Brokers who understand the healthcare industry can help you access Home Loan options from banks and lenders across Australia. A specialised Home Finance & Mortgage Broker will ensure you receive appropriate interest rate discounts and structure your loan optimally for your property type and professional circumstances.
Call one of our team or book an appointment at a time that works for you to discuss your property purchase goals and explore the most suitable home loan structure for your chosen property type.
