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Has COVID-19 made it harder for lawyers to buy a home?
With the global pandemic creating economic uncertainty and volatility, legal professionals should be asking if now is the best time to purchase property.
Jerome Doraisamy
Speaking last week on The Lawyers Weekly Show, Legal Home Loans director of sales Cullen Haynes said that “compelling” lending parameters for lawyers mean that such professionals are still very well placed to buy a home.
“None of the bank policies around lending for lawyers have changed. That is quite handy, especially because [property] valuations are coming in lower than expected.
“And, if you do have [the] capacity and are looking out [for] any rates that are 3.5 per cent or above, now’s the perfect time. This is the cheapest they’ve ever been… they’re starting from 2.09 per cent, owner-occupied. So, it’s quite a paradox: there’s all this doom and gloom in the market, but lending has never been cheaper.”
This all said, it will be important for lawyers to have honest conversations with their employers about job security, given the number of large law firms making cuts to salary and staff in the wake of the pandemic, Mr Haynes ceded.
“Legal professionals, in general, cut to the quick. They have these candid conversations already with their employer. They’re very upfront with their promotions, their salary increases. This is just as important. A house is the most important thing you’re going to do in your financial career, if you want to look at it like that,” he explained.
“Given the turbulent times, I don’t think it’s unreasonable to ask, ‘I’m a valuable team member, you know the work I’ve put in, is anything going to change in future? And if it is, by what? So, I need to factor that in. So, if I’m going to get a 20 per cent cut next month, I need to know, because I’ll be more conservative in our application’.”
The unprecedented nature of the pandemic, Mr Haynes continued, means that even lawyers who are not comfortable having such transparent dialogue with their superiors will have to do so if they wish to purchase property in the near future.
“Get some clarity in terms of the future. If it’s your first home, it’s a great time. However, you – and the bank, obviously – need to be quite sure that your income isn’t going to change now. Lending is funny, it’s like a test. Lending is a snapshot in time,” he said.
“So, if the bank knows that you’re in stable employment for now, and you’ve been upfront with all your information, such as not having any dependents, or knowing your spouse is not pregnant, etc. and you service the loan, once it settles, you can lose your job afterwards, but you’ve still got that loan in place.
“It’s a fine line between if the information that we’ve got now in that snapshot is accurate, so we can put an application in. But that’s where I say have a candid chat [with your employer], because if things are going to change, even though the bank can legally approve you, you might know something that the bank doesn’t know and that’s where hardship comes into place.”
To listen to the full conversation with Cullen Haynes, click below:
Jerome Doraisamy
Jerome Doraisamy is the editor of Lawyers Weekly and HR Leader. He has worked at Momentum Media as a journalist on Lawyers Weekly since February 2018, and has served as editor since March 2022. In June 2024, he also assumed the editorship of HR Leader. Jerome is also the author of The Wellness Doctrines book series, an admitted solicitor in NSW, and a board director of the Minds Count Foundation.
You can email Jerome at:
