What is a physician mortgage loan?
These are doctor loans geared towards helping medical professionals secure their dream home. The loans help dentists, doctors, and veterinarians to overcome hurdles when obtaining financing. It is not that easy at times for a physician trying to purchase a home. However, physician mortgage loans have targeted benefits and straightforward solutions to home financing needs for medical practitioners.
Most of these medical professionals have huge student loan balances. For some, their earning potential is not reflected in their work history, which makes it hard to qualify for a standard mortgage. That is why physician loan lenders understand what medical healthcare professionals go through and provide them with outstanding mortgages.
Here are some of the benefits of physician mortgage loans:
No down payment
Saving money during training as a medical practitioner is technically impossible. Money is used up in various ways that one is barely left with something to finance a loan, let alone have fun around. Since doctors cannot save up some cash during training, the mortgage loan lenders choose to put only a small amount of down payment while some have no down payment at all.
Most of the physician mortgage loans will have only a 5% down payment. Some lenders will have even way less than that as the down payment for the loan.
Any lender will look at your student loan debts, and this could be a huge determinant of whether you are going to secure the mortgage or not. The lender will count 1% of the loan balance as a monthly installment, making the mortgage a hard dream to achieve. However, the doctor loan lenders view the scenario from a different angle.
The physician loan lender will use income-based payments to assess the student debt, while some lenders will not look at the physician’s student loan debt when giving the loan. That is one impressive advantage of physician mortgage loans.
For the traditional mortgages, if you are not paying a 20% down payment, you will have to pay mortgage insurance. However, for physicians, there is no mortgage insurance. Assessing closely, the premium adds up to 0.75% to the total yearly mortgage payment. That is a huge amount that can be saved if there is no insurance premium, making the physician loans a doctor’s go-to solution.
With the doctor loans, you can buy a home 60 days before starting your new job. With the other loan lenders, you have to prove you are already in a stable job earning a sufficient salary to cater to the mortgage. That becomes hard when you are in a new city and have just started at your new workplace. However, the physician mortgage loan lender will let you settle in two months in advance. That means as long as you already have a signed employment contract, you can be allowed into your home, unlike traditional loan lenders.
Our preferred resource for learning and getting quotes for physician mortgage loans is LeverageRX. LeverageRX has an array of meticulously in-depth and informational articles and vetted companies that offer doctor loans that are all updated regularly.
Common Questions on Physician Mortgage Loans:
What is a physician mortgage loan?
It is a doctor’s home mortgage with unique qualities and attractive terms. These terms and benefits are not found with other mortgages, only for the dentists and doctors.
At what point do I qualify for the loan?
The physician home loan can be acquired even before you commence the residency. All you need is a signed residency contract. You should start the residency within 60 days of closing.
How much am I allowed to borrow?
Well, it is not possible to answer this since your financial situation is not known. However, the total amount you can borrow will be calculated using the Debt-to-Income-Ratio. To get an accurate image of your financial situation, the lender will assess your financial picture.
Is this loan a Government, Conforming, or Conventional Loan?
Physician mortgage loans are portfolio loans meaning they would be classified under conventional financing. The physician loan does not have a secondary market as with the conforming loans.
Can we use my spouses’ income, who is not a medical practitioner?
Yes. You are allowed to use your spouses’ income as long as one is a qualified dentist or doctor. They will be part of the loan process with all their financial information.
What are the properties eligible for the doctor loans?
Properties eligible for physician mortgage loans include townhomes, condominiums, and single-family homes.