The Complete Guide To Physician Mortgage Loans

Physician mortgages have always looked awesome. No jumbo limits, no money down and no private mortgage insurance (PMI). It seems as if you have finally found a product that rewards you for the time spent training to be a physician. It must have been tough watching most of your friends become homeowners.

While you were concentrating on your studies, your friends were busy posting photos of a fun-filled DIY home renovation. As you were sitting through longboard exams (8 hours), your friends were hosting a barbecue party in their backyard.

Let’s finally get real. Lenders are in the business of mortgage loans to make money. This means you don’t get a free ride. How do mortgage loans compare to other available loans? Are they as good as they look and sound? Let’s find out the truth.

As part of the home buying process, you would have already decided how much you want to spend. The next step is deciding how to finance your dream home. You will also be looking at whether the physician mortgage loan is the best option available.

You will be able to make an informed choice if you know:

• How Physician Mortgage Loans Work
• Alternatives to Physician Mortgage Loans and How They Compare
• Deciding on The Best Mortgage Depending on Your Situation

Contents

• Physician Mortgage Loans
• Special Features of Physician Mortgage Loans
• Who is a Qualified Borrower?
• List of Lenders Offering Physician Mortgage Loans
• Mortgage Expenses
• Rates and Costs of Physician Mortgage Loans
• Options to Choose
• Is It Necessary to Put Cash Down?
• What to Do If You Already Have a Physician Mortgage?
• When to Avoid Physician Mortgage Loans
• Alternatives to Consider Before Signing Physician Mortgage Loans
• Other Mortgage Resources

Physician Mortgage Loans

First and foremost, let us find out why physician mortgage loans exist. Physicians are profitable customers for lenders. They usually avail big loans early in their careers and pay them off on time.

Lenders provide big mortgage loans to physicians early in their careers with fewer conditions than their competitors. The mortgage loan is made more attractive to physicians as it is marketed as a special program just for them.

The ultimate goal of the lender is to get the physician to avail the mortgage loan. This will enable the lender to sell other financial products to the physician depending on their specific needs.

It is important to remember that a medical student making the transition to residency with no cash, no earnings history and a load of student loans will never qualify for a mortgage. Physician mortgage loans are what will help them buy their dream home.

Remember that not everything is as good as it looks. Even though the physician mortgage loans are initially appealing, they end up being expensive than the alternatives.

Before you make the all-important decision about mortgage loans, it is advisable to compare the physician mortgage loans with other types of mortgage loans.

Special Features of Physician Mortgage Loans

What makes the physician mortgage loans different and special from other types of mortgage loans? The special features include:

• Zero or very low-down payment.
• Private mortgage insurance is not required.
• No interest rate increase on jumbo loans. Jumbo loans are those that are larger than $417K.
• The mortgage loan is provided based on the signed employment contract of the physician.
• Student loan debt is not an important consideration.

Who is a Qualified Borrower?

A qualified borrower is a medical resident, attending or fellow physician with a signed contract for employment. Lenders may also include, other doctors, dentists, and veterinarians.

Physician Mortgage Loan Lenders

• Bank of America
• Bank of Nashville
• BancorpSouth
• BankSNB
• BB&T Bank
• BBVA
• BMO Harris Bank
• Cadence Bank
• Central Bank
• Chemical Bank
• Citizens Bank
• CrossCountry Mortgage
• Fairway Independent Mortgage
• Fifth Third Bank
• Financial One Mortgage
• First Federal of Lakewood
• First Financial Bank
• First National Bank
• First United
• Flagstar Bank
• Horizon Bank
• Huntington Bank
• iBERIABANK
• KeyBank
• Lake Michigan Credit Union
• Midland States Bank
• Opes Advisors
• Physician Loans
• Regions Bank
• Republic Bank
• SunTrust (now Truist)
• SouthCrest Bank
• TD Bank
• TIAA Bank
• US Bank
• Washington Trust

We do not have a financial relationship with any of the lenders mentioned above. All that we want to do is to help you explore the many options available. Contact us if you are a lender and want your name added to the list.

Mortgage Expenses

Now that you are aware of physician mortgage loans and their unique features, it is time to learn about mortgage expenses.

The focus is mostly on monthly payments when buying a home. You do need to remember that there are several other costs that contribute to mortgage expenses.

• Interest – The cost of interest is based on the loan balance, interest rate, and repayment term of the loan.
• Closing Cost – The expense (one-time) is paid at closing. It is often part of the loan balance and is charged as a higher interest rate.
• Private Mortgage Insurance (PMI) – It is the monthly fee that is paid until the equity reaches 20%.

Most lenders who provide physician mortgage loans lower fees especially when it is competitive. Clients often get discounts from lenders when they learn that the clients have approached multiple lenders.

Get the best deal from lenders by informing them that you have contacted multiple lenders and are yet to finalize the loan.

Interest rates and closing costs have a strange relationship. When closing costs on a mortgage are reduced, it increases the interest rate. Lower interest rates will mean higher closing costs.