Hi guys,

I wanted to find out your mortgage experiences and also get some advice.

It is possible that I will end up in michigan/ohio/illinois. I am looking to buy a house, more likely a condo, for ~$250k.

I have looked at a few mortgage companies including Tower (physician loans), Doctorsloans.com, Bank of America, and several local mortgage companies.

Both my wife and I have good credit 700-720. My wife is making $42K/year + overtime and I will be making $40K+-. I have no credit card debt at this point. But I have about $170K in student loans and my wife about $15K. I will defer my loans and we will pay hers.

I am looking for a mortgage that is 0 PMI, 0 Points, as minimal as possible of closing fees and as best as possible morgage interest rate and to pay interest only. I also need the lender to aprove my loan hopefully 30-60 days prior to me starting residency and not take my school loans (that will be deferred) into consideration. I have been running into the 5/ARM mortgages that seem to be good for my situation. Nobody yet has the perfect loan.

I am hoping that you guys would give me good advice on which companies I should check out and which companies you guys had good experience with.

Other questions;
1. have you guys seen any 3/ARM loans (I figure I will move at the end of residency and would get rid of the ARM). I am hoping that I can find a better rate with 3/ARM then 5/ARM.

2. What do you guys think about getting an 80/20 type of loan with HELOC (home equaty line of credit) as the other 20% for second mortgage versus the one mortgage of 100% if all other parameters were the same.

3. Is it risky to go with a broker/mortgage company that is out of state but claims that they can set up a morgage for you in the state you are interested in.

4. What is the deal with sellers conscessions. All the mortgage companies are telling me that I will be able to cover the closing costs with seller's conscessions. It seems to me that this is all dependent on the negotiations that I will have with the seller and this is not the thing I should rely on. Are there any ways that the mortgage lenders would be willing to pay the closing fees or part of them?

5. Am I looking to early for a mortgage at this point, since match is in march. I get a lot of "ohh it is possible that the interest rates may change by march and the loan might be a little different". I am a little worried that I will get excited about a deal but when the time comes to sign the paper I will get a big surprise.

Looking forward to your advice.

PCN

I was in almost the identical situation. Our budget was $250k and we went with the BOA doctor's loan. Zero down, 1% origination fee (which could be considered one point) and no PMI. We chose the 5/1 ARM - not interest only and have been VERY happy with everything. BOA was kind of shady by sneaking the orignation fee into the deal, but overall we found a house 30k below its appraised value, and financed the full amount, leaving us with 30k to put into a new kitchen, hardwood floors, and a complete makeover with plasma TV. In all, we financed the appraised value of the home and have already seen comps in the neigborhood 30k more than our appraisal. I would stay clear of the interest-only loan for one reason - equity. If you run into a stale market, at least you are putting some payment into the home, which can be used to cover closing costs if you need to in 3-5 years. Where I live, housing prices will only continue to rise :)

Tower Mortgage (physicians loans)

also has 3/1 ARM options
I am in the process currently as well.
Thank God houses here are cheaper in Oklahoma!

If you are buying a new condo do you need a realistate agent? Do the developers allow you to negotiate or give you a better price when you don't have an agent (so that they don't have to pay commission). What benefits do I get in having an agent. Also, I am feeling that my agent may not show all of the new properties because apperently some of the developers will not pay commission.

I was in almost the identical situation. Our budget was $250k and we went with the BOA doctor's loan. Zero down, 1% origination fee (which could be considered one point) and no PMI. We chose the 5/1 ARM - not interest only and have been VERY happy with everything. BOA was kind of shady by sneaking the orignation fee into the deal, but overall we found a house 30k below its appraised value, and financed the full amount, leaving us with 30k to put into a new kitchen, hardwood floors, and a complete makeover with plasma TV. In all, we financed the appraised value of the home and have already seen comps in the neigborhood 30k more than our appraisal. I would stay clear of the interest-only loan for one reason - equity. If you run into a stale market, at least you are putting some payment into the home, which can be used to cover closing costs if you need to in 3-5 years. Where I live, housing prices will only continue to rise :)

I have a 3 year ARM, at 3.75. My loan is for 138k through a local bank here in Ohio. No problems, i certainly WOULD hesitate getting a home worth 250k jesus that is alot even on two salaries. My question is why do you need such a big home (your business of course)? You may run into some resistance from lenders since your school debt is so high...

DocWagner - $250k does not go far here, in fact it got us a 3 bedroom townhouse. For comparison, a lease on a 2 bedroom apartment will cost $1200-1300/month - the price of our home.

PCN - you do not NEED a real-estate agent to buy and yes, some agents will not disclose some properties due to their reduction in comission. You will, however, need a lawyer to prepare your paperwork. I will not try to be an expert in this field, but it is much cheaper if you go without an agent. Research the laws where you live and see what you need to do on your own if you want this route.

i have done a minimal amount of research on this---

AmSouth does a "professional loan" and will finance 100% without the PMI insurance. BOA will do the same. I think I will be looking at the 5/1 ARM just because what if I do not get out of the house in 3 years or decide to stay, then the rates could be much higher. BOA charges $713 origination fee from what they tell me plus all the other crap. AmSouth stated that closing costs would be around $2300. Just my 2 cents, but i will probably be loaning 200K. These two banks do not look at debt to income ratio either, shich will help b/c i have 120,000+ in loans as well.

One more question before the big game.

How do you guys feel about using mortgage brokers that are out of state, like tower. The only access you have to them is by phone, never getting to meet them. Is it ever an issue where you get screwed at closing?

I tried to work with lending tree and hated the out of town, never available reps I was matched up with (bankers ought to keep bankers hours and be available during the normal business day--i.e. tuesday at 10:00).

In the end, this was one of the things I love about working with ING direct. I did not have a personal representative, so I could call at any time and talk to anyone about my account. There were not working on comission and were truly helpful. I highly recommend them to anyone (who can come up with 10% down--I think their loans are the lowest cost because they only lend to low risk customers).

Just to throw in my 2 cents...I would find the 250k to be a little high as well. I am planning on starting at Ohio State, and am obviously interested in the Columbus area housing market. My wife makes around 70k and I will make around 40k and we are looking for a house under 150k. I've been looking at FSBO sites to get a reasonable idea of what the market is like. I use these sites b/c owners tend to overshoot what they think their house is worth, thus putting me on the high end of what I should expect to pay. I appreciate this thread and will check back soon for any other advice given.
As far as the price of the house, $250K being high or low depends on where you live. I know in Ohio the realistate is very affordable. I think $250K is the upper max that I would consider. I think more realistically, I would like to be $180K-225K depending on a few factors.

In regards to having or not having a realistate agent: I am in a situation where my top three choices are in three different states. There is a possibility for me to end at any of these despite applying to IM. We started looking at places that are close to my number one choice. I like having a realistate agent to show us around and educate us. However, I am affraid that the agent may be trying to sell us something that we may not want (just to make a good commission). Plus the agent may not be showing us some of the new developments. Even bigger problem is that I might end up in my number 2 or 3 (hopefully not lower). If I do end up in number 2 or 3 I will probably strongly consider renting. I feel like I have a good idea of the mortgage situation, but the realistate agent situation I am not sure. I know that without the agent it will be cheaper, but it will be a lot harder to arrange to visit the old properties (considering my limited time). On the other hand, with an agent I am affraid that we will not see the new stuff. Also I don't know if I should start looking after I match. I am essentially going to have 2.5 month, but I don't know if thats enough.


Anyone have any coments on the seller's conscesions to avoid closing fees?

Just to do the calculations about being able to afford a house for you guys. I have been recently thinking deep and this is what I got.

if you get a 5/1 ARM mortgage with 100% financing (like an 80/20) with no PMI and no origination points with great credit, at this time, you could prob pull off 5.1-5.5% interest rate. Lets take a realistic 200K house. Your combined mortgage payment would be arond $1050-1200/mo on interest only mortgage (there are advantages and disadvantages to interest only. Advantage is that mortgage payments are less, 100-150/mo and the money that you would put for your principle on a principle + interest mortgage could be saved by yourself if you are disciplined. If you invest this money you will have a higher rate of return. The disadvantage of an interest only loan would be that the interest would usually go up by 0.125 and that would mean 20-50/month up for your mortgage), your taxes depending on where you buy could be 2K-3K (about $250/mo, a little on the high side), and your association fees would be $250-300/mo if you buy a condo. One should also not forget the closing fees. These fees are comprised of lender/broker fees (sometimes negotiable 600-1200), third party fees (title company... up to 1000) and gov fees (escrow... could be several thousend, I am still not totally clear on this), also second mortgage fees one time 300 if you go with 80/20 type of deal. Total closing could be 3K-6K. The lenders that I have been talking to are pushing this idea of sellers conscessions wher you negotiate with the seller to pay your closing fees. This essentially makes it a more difficult negotiation, and you will still pay the money although not upfront but when you sell the house. Basically, for a condo 200K one would pay about $1600-1800/mo and on a house it might be a little less without association fees although with higher taxes. Of course, with the house you will cut your own grass or get someone to do it, fix stuff outside (roof leaking...) so in the long run it might be very close b/w condo and house. I am kinda attracted to the new condos because the odds are that there will be the least amount of maintanance.

Now to do more global calculations.

over three years $1700/month would be 61,200 + 4.5K (closing fees) = 65.7K/3years

If you sell the place in three years and the place appreciates 5%/year (unfortunately the market for realistate is not looking great in the near future, so it could definately be lower, also depending on where you buy). This would look like making 30K. Unfortunately when you sell the property and that is if you sell it without any problems you will pay 6% realtor fees, so subtract 13K. You have left 17K profit in three years ideally when you move on to your fellowship.

Basically the total you have paid for three years would be 65K-17K=48K to live for three years.

Now just to be very objective, where we are looking, we could get a townhouse apartment that is not as great as a 200K condo but close for say 1400/month. If you consider a security deposit at max 1400 then over three years that would be about 52K total. Now, compare the 52K for apartment to 48K for condo. Not that big of a difference. There is certainly less of a hassle in renting an appartment, and don't have to worry about selling it, and certainly don't have to worry about maintanance.

As far as being able to afford it on two incomes: if you and your wife make 40K each, that is roughly 1200-1300/2weeks x 2 people after taxes = 5000/month roghly for two people. I don't think this should be an issue in affording a place for 200K and most likey 250K. If you are a good saver and are cheap, you could even probably go for 300K if you are approved.

just to add a few good websites that I have been reading.

bankrate.com

hsh.com <== get a report on mortgage companies in your area. I have seen many recommendations of this website. The website looks kinda funky, but I called and ordered a report of mortgages in my area for $11, and got in next day by email in excel format

http://www.memag.com/memag/ <==go to personal finances, it has a lot of good info

http://www.mortgages-loans-calculators.com/calculator-adjustable-rate-mortgage.asp <== use this mortgage calculator

hope this helps someone, if you guys have any good suggestions of websites, post them here

The mortgage professor website has alot of great info, worth a bit of your time.
http://www.mtgprofessor.com
Also, I must say I had a very pleasant experience with ING last year when I went through this - not to mention their fantastic rates.

Dear beriberi and jwolfe,

Thanks so much for the advice about ING direct. I looked through the website, and they do indeed have very good rates and are upfront with their closing costs, which are relatively low. I will try and call them sometime this week. The only thing is that with their mortgage calculator it seems that they only process loans that are 20% down. I want no down payment and no PMI. Just curious how much did you guys end up putting down?

Also, since I will be starting my residency in about 5 month and will not have an income till then, I found out that some of the companies will not approve me until I have worked for atleast 30 days. I want to buy obviously before I start residency. Did you guys have any such issues with ING

Your combined mortgage payment would be arond $1050-1200/mo on interest only mortgage (there are advantages and disadvantages to interest only. Advantage is that mortgage payments are less, 100-150/mo and the money that you would put for your principle on a principle + interest mortgage could be saved by yourself if you are disciplined. If you invest this money you will have a higher rate of return. The disadvantage of an interest only loan would be that the interest would usually go up by 0.125 and that would mean 20-50/month up for your mortgage), your taxes depending on where you buy could be 2K-3K (about $250/mo, a little on the high side), and your association fees would be $250-300/mo if you buy a condo.


A couple things here. You propose getting an interest only loan and using the money you would have paid into principle and investing it. If you do this, you'd have to earn more on that money than your current mortgage interest rate to make it worth it. Lately, a 5.5% gain per year in the stock market has been difficult. You take into account brokers fees, taxes, etc on money invested and it's going to be hard to beat the 5.5% interest rate.

Also, pay attention that buying a house allows you to deduct from your fed withholding taxes the money you pay in property tax and interest on the mortgage. So, for us in the early years of a mortgage, you're mostly paying interest. Add to that property taxes and you're deducting well over $10,000 a year in from your taxable income. This can yield over a $1000 in less taxes paid per year as compared to renting.

I won't argue about the deductions. So say over 3 years in residency you can save 3K. This is not significant enough by itself to make a decision to buy rather then rent. I disagree with what you say about paying interest and principle, at least in my situation. I guess, if you plan on living in the house for > 5 years then maybe. However, if you are like me and are thinking of buying a house for 200K, are going to live in it for ~3years, but decide to pay the principle, you will contribute between 8-9K/3years. How, much money will you be making on your 9K over 3 years at 5.5%? We are talking a few hundreds of dollars. On the other hand to reduce your mortgage payments over the three years by ~200/month may be more meaningful as you are going to be limited on cash during residency. I think it is better to look at the global picture rather than focus only on the interest rate percentages. Also the amount of money that you will be making on your principle, if I am not mistaken is more related to the appreciation of the house rather then the mortgage rate (I maybe wrong on this). The realistate market unfortunately is not predicted to be doing very well in the near future, and you might not even get a 5%/year appreciation for your house.

A couple things here. You propose getting an interest only loan and using the money you would have paid into principle and investing it. If you do this, you'd have to earn more on that money than your current mortgage interest rate to make it worth it. Lately, a 5.5% gain per year in the stock market has been difficult. You take into account brokers fees, taxes, etc on money invested and it's going to be hard to beat the 5.5% interest rate.

Also, pay attention that buying a house allows you to deduct from your fed withholding taxes the money you pay in property tax and interest on the mortgage. So, for us in the early years of a mortgage, you're mostly paying interest. Add to that property taxes and you're deducting well over $10,000 a year in from your taxable income. This can yield over a $1000 in less taxes paid per year as compared to renting.

PCN-
I actually put down a little over 20% because I wanted the ING loan and the amount I was approved wasn't quite enough for the house I wanted. Many would say with such low interest rates that you should keep your $ working for you in some other way rather than putting the 20% down - it is a personal decision. In any event, I do not know what ING's policy is on 100% loans.
I will say that ING's rates are phenomenal and the closing costs are unbeatable -> No points and none of the typical bull$hit that mortgage broker's will add to cushion the deal for them.
As far as deducting interest, remember that if you decide to purchase a house and then itemize your deductions to include mortgage interest that you will not get the "standard deduction." You will likely still be better off (at least after the first year) but the marginal increase won't be quite as dramatic as stated above.
Finally, it is a bit early to actually apply for the loan. Keep on educating yourself and talking to a lot of people so you know what you want to do when the time comes. As I said earlier, spend some time on the mortgage professor website so that if you decide to use a broker you know the advantages and pitfalls. It definately saved me from making some bad decisions.

However, if you are like me and are thinking of buying a house for 200K, are going to live in it for ~3years, but decide to pay the principle, you will contribute between 8-9K/3years. How, much money will you be making on your 9K over 3 years at 5.5%? We are talking a few hundreds of dollars. On the other hand to reduce your mortgage payments over the three years by ~200/month may be more meaningful as you are going to be limited on cash during residency.


PCN, good post. I think the interest only loan is a good option if you're trying to buy more house and need the extra money to pay for living expenses. I'd be somewhat reluctant to get an interest only loan for a home and then use the money to invest in a stock, pork bellies, junk bonds, etc. By not paying principle on your mortgage, you will continue to lose 5% or whatever your interest rate is on your mortgage principle. You'll never see this money again. However, if you pay principle on the mortgage, you'll be able to get that money back when you sell your house. If you put the money saved from an interest only loan in stock, you'd have to beat 5% or whatever your interest rate is to make it a valuable use.

Check out the mortgage professor link above. I think it describes the concept better.

http://www.mtgprofessor.com/Tutorials2/Interest_Only.htm

THaks for the advice. Unfortunately, I don't have 20% or anywhere close to it. I am trying to cut down my costs upfront as much as possible. Even more importantly the make it or break it issue for me is that I am trying to buy a house prior to having an income as I am still a 4th year. There are only a few mortgage lenders that are willing to offer a loan without two paystubs. I called ING direct today and they will not process my application unless I have a jobby job. I didn't even ask about 100% financing.

To "Dr. Banker" please state clearly that you are advertising your BOA program. This post and SDN in general is not meant for free advertisements. Most people reading these posts would rather see experiences that people have had with different mortgage lenders. If you are however trying to get a free plug, please specify clearly who you are and what you are offering. I also want to mension that BOA does offer good deals but they are not offered in the states I am looking at for residency unfortunately.

PCN-
I actually put down a little over 20% because I wanted the ING loan and the amount I was approved wasn't quite enough for the house I wanted. Many would say with such low interest rates that you should keep your $ working for you in some other way rather than putting the 20% down - it is a personal decision. In any event, I do not know what ING's policy is on 100% loans.
I will say that ING's rates are phenomenal and the closing costs are unbeatable -> No points and none of the typical bull$hit that mortgage broker's will add to cushion the deal for them.
As far as deducting interest, remember that if you decide to purchase a house and then itemize your deductions to include mortgage interest that you will not get the "standard deduction." You will likely still be better off (at least after the first year) but the marginal increase won't be quite as dramatic as stated above.
Finally, it is a bit early to actually apply for the loan. Keep on educating yourself and talking to a lot of people so you know what you want to do when the time comes. As I said earlier, spend some time on the mortgage professor website so that if you decide to use a broker you know the advantages and pitfalls. It definately saved me from making some bad decisions.

Great thread, guys.

I too, am looking to drop a significant chunk o' change for a condo (and thanks for the info on ING).

Have y'all found any good websites/web resources on trying to ascertain historical home sale prices for a given area? I've been trying to compare prices of the condo I am looking at (brand spanking new) with older single homes of similar square footage (yes, I know it isn't comparing apples to apples). The possibility of buying at the wrong point in the housing market unnerves me :scared:

Personally, I'm leaning more towards a 5 year ARM, although it may restrict my fellowship opportunities if I lean in that direction :)

Not to interject here, but these discussion about buying are worthless without researching resale trends in the area you want to buy in. Look up the tax records and see which areas have consistently risen over time and buy there. As for the market - the overall trend is still an incredible investment over 10-20 year intervals. Buy where it has been consistently appreciating and hold on to what you buy. If you can afford it through residency, you can easily afford it out of residency and the income you will generate will be comparable to if not better than the market...

Just to add my 2 cents on B of A. As residents/interns we pretty much get paid the same (around $40-$44K, depending on the state). I just finished working with B of A on a pre-approval of a $250,000 Doctor's loan and the result was less than positive. They would not approve me for this much based on my income alone(my FICO score is around 800). They offered me $80,000 loan, which I can not use to buy a dog house where I am going.My SO is in medical school, so I could not use her income. I tried using my father as a co-signer, but this program does not allow a non-occupant borrower. So, unless you are moving to Idaho or you wife makes a good living, forget about B of A.

P.S. I am in the process with SunTrust right now; I'll let you guys know how that turns out.


Bank of America does actually offer the zero down Physician loan in one of your states:Illinois along with 28 other states.
Someone earlier had requested good websites that address mortgages. Well www.mortgagesforphysicians.com is specifically designed to help answer many of the questions residents/phyicians/med. students have.

Great!

I think this is the exact type of info I need (and I am assuming many others who are reading this thread need).

if you guys can post quick three liners

1. Mortgage company, used/planning on using (experience), target loan amount, your credit score

2. Pertanent +/-, (interest rate, closing fees, +/-PMI, +/- origination points, 100% financing or 80/20, will they approve before having an income for the 4th years like me )

3. anything else



Just to add my 2 cents on B of A. As residents/interns we pretty much get paid the same (around $40-$44K, depending on the state). I just finished working with B of A on a pre-approval of a $250,000 Doctor's loan and the result was less than positive. They would not approve me for this much based on my income alone(my FICO score is around 800). They offered me $80,000 loan, which I can not use to buy a dog house where I am going.My SO is in medical school, so I could not use her income. I tried using my father as a co-signer, but this program does not allow a non-occupant borrower. So, unless you are moving to Idaho or you wife makes a good living, forget about B of A.

P.S. I am in the process with SunTrust right now; I'll let you guys know how that turns out.

Great!

I think this is the exact type of info I need (and I am assuming many others who are reading this thread need).

if you guys can post quick three liners

1. Mortgage company, used/planning on using (experience), target loan amount, your credit score

2. Pertanent +/-, (interest rate, closing fees, +/-PMI, +/- origination points, 100% financing or 80/20, will they approve before having an income for the 4th years like me )

3. anything else


First quote:

Tower
State: Iowa (hopefully)
target loan: $175k
credit score: 752
5 ARM 80/20 (5.5%/6.375) Interest only increases rate 1/8 point.
1% origination fee
They will approve before I have an income.

So, I've noticed that my rate is higher than those posted on bankrate.com. Am I getting quoted a higher rate because it's a 100% loan? And what makes these loans special? Is it that we get a bigger loan for our meager incomes?

Keep posting your experiences guys!

So, I've noticed that my rate is higher than those posted on bankrate.com. Am I getting quoted a higher rate because it's a 100% loan? And what makes these loans special? Is it that we get a bigger loan for our meager incomes?

Keep posting your experiences guys!

So, I spoke with a rep from Bank of America today. He told me that they can't offer the 100% physician loan to residents in states where there are no Bank of America locations. So, even with all the mergers and acquisitions that BOA has done recently, I'm still left in the cold.

On the bright side, they do offer an 80/20 loan to cover it.

I'm probably going to maximize my student loans to use as a down payment and look at ING direct.

Well, the state I am looking at has plenty of B of A locations. I was turned down for other reasons. And, of btw, they were quick to offer a 80/20 option as well :)

What rates are you being quoted on the 80/20's? How much higher is the 20% part?

It looks like all lenders but 1 (maybe 2) offer physician loans in Iowa, so my choices are limited. I wonder if I shouldn't just rent until I can qualify for a regular loan.

It is actually not too bad (? I think):

Wells Fargo
80/15/5
$250K
5 ARM
$12.5K down
$20,900 due at closing (incl down, closing costs, county tx, insurance, etc.)

If regular- interest 4.8% ($1520 per month)
If interest only option- 5.1% ($1319 per month)

What do you guys think of this? Is this a reasonable offer? This is my first real estate purchase and I am kind of nervous about this whole thing...

It is actually not too bad (? I think):

Wells Fargo
80/15/15
$250K
5 ARM
$12.5K down
$20,900 due at closing (incl down, closing costs, county tx, insurance, etc.)

If regular- interest 4.8% ($1520 per month)
If interest only option- 5.1% ($1319 per month)



I don't get it. What's a 80/15/15? They are going to give you 110%? Is the down payment you are talking about from the loan money or your money? The rate is fantastic.

I don't get it. What's a 80/15/15? They are going to give you 110%? Is the down payment you are talking about from the loan money or your money? The rate is fantastic.

Oops, that was 80/15/5. 80% loan, 15% credit line, 5% down. That way you avoid PMI, but your overall payment is lower. Down and closing is my cash.

So, why did they offer me a $80,000 loan? I have no other debts except for a leased car. I have excellent credit. Is this BOA agent's fault? Did he present my info incorrectly to underwriter? Should I try someone else with BOA?

Just to add my 2 cents on B of A. As residents/interns we pretty much get paid the same (around $40-$44K, depending on the state). I just finished working with B of A on a pre-approval of a $250,000 Doctor's loan and the result was less than positive. They would not approve me for this much based on my income alone(my FICO score is around 800). They offered me $80,000 loan, which I can not use to buy a dog house where I am going.My SO is in medical school, so I could not use her income. I tried using my father as a co-signer, but this program does not allow a non-occupant borrower. So, unless you are moving to Idaho or you wife makes a good living, forget about B of A.

P.S. I am in the process with SunTrust right now; I'll let you guys know how that turns out.

As someone already mentioned, you should qualify for more than $80k based on your salary alone. I am working on the pre-approval process with B of A in another state and was told that I qualify for $180-200k based on my resident's salary of $40-41k (at the current interest rates). I'd contact a different B of A office if you are looking for a no down payment, no pmi loan.

I ran into the same problem with B of A--I wasns't moving to a state with a doctor loan, but they were happy to set me up with a high interest 80/20 plan. (for around 80k--since my husband did not have a job in the new city).

ING made our loan before I started residency--they were happy to take my contract as proof of employment. They do an 80% loan, with a 10% home equity and 10% down, but you can't beat their rates and service.

As niner-nine(nineninenine) pointed out, and I would like to concur, the real estate market is very complex. There will be no list of areas likely to go up and areas likely to go down. A good real estate agent should be able to provide you with comps to any house/condo you are buying (and don't compare condos with houses, the markets are very different). A comp would include what very similar properties in nearly the exact same area have sold for over the past few years.

However, asking someone to predict the real estate market is like asking someone to predict the stock market. I would put your money in Apple, Fed Ex and anything Pharma. You would do best to not take advice from some strager on the internet, and realize that no one can predict with any certainty which way the market will go (though over the long term, most stocks go up and so does most real estate). Fortunes are made and lost in both markets, and if there is no certainty in either.

Anyone on this forum looking to buy a house needs to have a good reference other than the people purusing sdn (Did you know doctors are infamous for mismanaging our personal assets?). Though this forum is great to let you know which lenders will work best with you, how they will treat you loans, etc, but you should buy Real Estate for Dummies, Home Buying for idiots, The Incompetent Person's First House or something and read it carefully. The 19.95 investment will serve you well.

Great point beriberi!!

serveral points.

1. I called ING Direct and they told me that they would not be able to offer me a lone without 2 paystubs. In addition they don't have 100% financing nor 80/20. So you have to put money down. For people like me who have no money now to put down, are trying to find the cheapest out of pocket purchase and are comparing buying a condo w/ renting a nice appartment these 20% down loans won't do.

2. Just so that the BofA guy doesn't confuse you 80/20 loans are not that bad. Take Tower for example, 80% loan at 5.5% and 20% loan at 6.325%, do weighted averages and you get 5.625% overall. Also I think tower offerest a 5/1 ARM on 20% mortgage. Moreover, don't let interest rates totally confuse. Interest rates are not the thing that necessarily makes money for the broker/lender. Use the mortgage calculator and you'll find out that difference in monthly payments between 5.5% and 6.5% interest rate is only like 100-150/month, not to mension comparing something like 5.1% and 5.5%. The downside of an 80/20 deal is that you have to pay like $500 to set up a second mortgage and you will pay two mortgage payments. For those who don't want to spend lots of money upfront the thing you have to look at is the closing fees. You need to get a good faith estimate of all closing fees BEFORE YOU APPLY FOR THE LOAN. Remeber 1% origination point on a 200K house is going to cost you 2K upfront in addition with other 3-4K for closing fees.

3. Finally, I am in a situation where I am no longer am sure if this is all worth it. Don't get me wrong I really want to buy a condo. But as beriberi explained it, you just can't know where the market is going to go. Moreover, is it worth going into all this trouble, if I only may live in the condo for 3 years and then have to sell it because I will do a fellowship somewhere else. I guess if you know you are matching into a 5 year program you know you will keep your place long enough to realistically expect a reasonable profit. For three years, I don't know.

I ran into the same problem with B of A--I wasns't moving to a state with a doctor loan, but they were happy to set me up with a high interest 80/20 plan. (for around 80k--since my husband did not have a job in the new city).

ING made our loan before I started residency--they were happy to take my contract as proof of employment. They do an 80% loan, with a 10% home equity and 10% down, but you can't beat their rates and service.

As niner-nine(nineninenine) pointed out, and I would like to concur, the real estate market is very complex. There will be no list of areas likely to go up and areas likely to go down. A good real estate agent should be able to provide you with comps to any house/condo you are buying (and don't compare condos with houses, the markets are very different). A comp would include what very similar properties in nearly the exact same area have sold for over the past few years.

However, asking someone to predict the real estate market is like asking someone to predict the stock market. I would put your money in Apple, Fed Ex and anything Pharma. You would do best to not take advice from some strager on the internet, and realize that no one can predict with any certainty which way the market will go (though over the long term, most stocks go up and so does most real estate). Fortunes are made and lost in both markets, and if there is no certainty in either.

Anyone on this forum looking to buy a house needs to have a good reference other than the people purusing sdn (Did you know doctors are infamous for mismanaging our personal assets?). Though this forum is great to let you know which lenders will work best with you, how they will treat you loans, etc, but you should buy Real Estate for Dummies, Home Buying for idiots, The Incompetent Person's First House or something and read it carefully. The 19.95 investment will serve you well.

So, why did they offer me a $80,000 loan? I have no other debts except for a leased car. I have excellent credit. Is this BOA agent's fault? Did he present my info incorrectly to underwriter? Should I try someone else with BOA?

we tried BofA as well-- but they wouldn't budge on their requirement of a 720 credit score. Even though we've banked with them for years, and intended to for a long time. We went to suntrust and were given the exact same deal (no money down, no PMI, 5 year ARM), not to mention great service. i'm military with dependents and make around 60k a year and qualified for 250k no problem. We probably could have gotten more but we didn't need it-- we found a suitable place for around 195k.

good luck

--your friendly neighborhood homeowning caveman

So, why did they offer me a $80,000 loan? I have no other debts except for a leased car. I have excellent credit. Is this BOA agent's fault? Did he present my info incorrectly to underwriter? Should I try someone else with BOA?


I am guessing that having a significant other in med school may have been a problem. This is what I got from BofA:

5/1ARM @ 5%
Nothing down, No PMI
1% Origination Fee (Seems a little steep?)

I have no other loans (besides med school loans), middle credit score of 755, and on a 41K/year salary, approved for 180K mortgage. My biggest problem is that where I will be for residency (Upstate NY), the houses are cheap but the property taxes are through the roof! Otherwise I could have gotten more. If I add my wife to the equation, assuming she make at least 40K, ceiling goes up to about 240K. This seems to be the best deal so far. Would like to find a similar deal with less in orig. fees...5% is a pretty good rate imho considering the circumstances...

Great thread - thanks so much for contributing to this. I'm an M4, about to graduate from med school, I've already matched to a program at my home school - I was hoping to buy a house right away since I matched here at home and I'm trying to find a bank that will loan me the dough before I actually start working. While my wife makes a good salary 45k, our combined ed debt is about 200k, plus we're paying on 2 cars (could probably pay one off if we had too). Despite our good credit & savings BOA wouldn't give us the Dr. Loan until I started residency - so I'm looking for alternatives. Looks like Suntrust and ING may be more receptive, been talking with a guy at Welles Fargo, maybe a local bank will help us out. I thought BOA would be satisfied with a letter showing I was accepted but they gave me the big no. darn bureaucrats.

BOA will give you the loan before you start residency - you just need to give them a copy of the signed contract before you close (you will sign your contract about 3-4 weeks after match day).

I have a different sort of question for you guys.

Since this is my 1st home purchase, I am not that up to speed on what exactly constitutes "closing costs". I found what I think is a good deal, but they are charging me $6000 in "closing costs". This includes all the lawer fees, transfer fees, bla, bla,bla. On a $250,000 loan $6000 is about 2.5%; I think that's kind of steep. When I went back to talk to the banker about this, he said that these are costs through many 3rd parties who are doing the appraisal, inspection, conteract, etc. and there is nothing he can do about this. He honestly told me that his cut is $800. Do you guys think he is being truthful or is this just a bunch of BS in order to justify overcharging me?

This loan has no origination fees, no PMI.

Any input is appreciated.

JR - make sure your banker provides you with a good faith estimate of costs (which break down everything from points, to origination fees, to titles, transfer stamps, tax, legal fees, filing fees, first years insurance, first year's HOA fees, processing and copying fees, etc). Then take this list to your realtor and see what their comission will be. Expect 3-4% of the cost of the home for comission (which is usually either paid by the seller or split to reduce closing costs). If your banker won't give you an itemized good faith estimate - ask for a signed copy of one. If he won't give you one, find a new banker. There will also be a few "surprise" costs when you close, such as title fee, inspection fee, etc which you should be prepared for up front. Some of these cannot be financed and must be paid before closing. Also - make sure your banker knows that all closing costs are to be financed (unless you plan to pay at closing).

I have a different sort of question for you guys.

Since this is my 1st home purchase, I am not that up to speed on what exactly constitutes "closing costs". I found what I think is a good deal, but they are charging me $6000 in "closing costs". This includes all the lawer fees, transfer fees, bla, bla,bla. On a $250,000 loan $6000 is about 2.5%; I think that's kind of steep. When I went back to talk to the banker about this, he said that these are costs through many 3rd parties who are doing the appraisal, inspection, conteract, etc. and there is nothing he can do about this. He honestly told me that his cut is $800. Do you guys think he is being truthful or is this just a bunch of BS in order to justify overcharging me?

This loan has no origination fees, no PMI.

Any input is appreciated.

i'm an M4 also looking to purchase my first piece of real estate.. and i'm probably as confused if not more confused than everyone else on this thread..

thankfully.. i'm reading personal finances for dummies and real estate for dummies.. it's been pretty helpful thus far.. :D


anyone else got a book they can suggest??

i am reading realistate 4 dummies. its ok, but i am returning the book soon b/c its not a keeper

i have also decided to drop my realistate agent. i am now planing to limit my search to only new condos for several reasons:
1. to limit my search, since there appears to be too many options otherwise.
2. my realistate agent is interested in getting commission and not the best value for me
3. the odds of having fix up problems (that will take up time and get on my nerves) are a lot smaller w/ new condos.
4. i also found out that like a car which depreciates in value the most in 1st two years, the condo appreciates in value the most in the first two years. on a short term investment a new condo is probably the best investment for me withot going crazy to find an underprised old condo.



i'm an M4 also looking to purchase my first piece of real estate.. and i'm probably as confused if not more confused than everyone else on this thread..

thankfully.. i'm reading personal finances for dummies and real estate for dummies.. it's been pretty helpful thus far.. :D


anyone else got a book they can suggest??

Thanks for the reply. The figures are from the GFE; I had no problems getting one. I guess maybe I am not getting screwed; maybe this is just the way it is. I really like the % and monthly from these people, I just want to make sure I am not getting overcharged on closing. I went through the itemized closing cost list once again; it looks legit: transfer tax, lawer fees, filing fees... I guess, however, there is no way of knowing if legal fees are lets say $400, but you are getting charged $1800.

JR - make sure your banker provides you with a good faith estimate of costs (which break down everything from points, to origination fees, to titles, transfer stamps, tax, legal fees, filing fees, first years insurance, first year's HOA fees, processing and copying fees, etc). Then take this list to your realtor and see what their comission will be. Expect 3-4% of the cost of the home for comission (which is usually either paid by the seller or split to reduce closing costs). If your banker won't give you an itemized good faith estimate - ask for a signed copy of one. If he won't give you one, find a new banker. There will also be a few "surprise" costs when you close, such as title fee, inspection fee, etc which you should be prepared for up front. Some of these cannot be financed and must be paid before closing. Also - make sure your banker knows that all closing costs are to be financed (unless you plan to pay at closing).

JR-
You are right, it will be difficult to tell what is reasonable since this is not something you do regularly, or have ever done. As a point of reference I paid approximately $2400 (actually $400 after sellers contribution) for all of the closing costs and fees on a $220k loan. I would just call him back and ask him if he can do better. ninerniner seems to have closed in the baltimore area recently, so maybe he will compare notes with you. Perhaps closing costs are higher in baltimore than atlanta.
-JDW

So my saga with mortgages continues...

To recap...BOA won't offer me a physician loan in Wisconsin because they don't have a physical bank located there. They did offer me an 80/20 loan, but also informed me that they had to take into account my student loan debt. Not sure why.

I spoke with USAA. The lady there says that I need a notification from my student loan lender that I have a 3 year deferment on my payments. As far as I know, deferments/forbearances, etc are only offered on a yearly basis. How can I get a 3 year one?

Has anyone else who is not using the BOA 100% physician loan where they automatically do not look at your student loans have similar problems with this?

Thanks.

You might just want to try contacting a mortgage broker who will go out and shop for the best rates. As long as you have good credit you shouldn't have any trouble getting a loan. Banks are notorious for scrutinizing your profile, including debt and they don't have as much leeway in bending to give you a better rate. Your mortgage broker will be the one who will go out and shop for the best loan. You could also do a no doc loan and just use your credit history to get the loan, this way you don't have to provide them with an income. Your interest rate will be a little bit higher, but you always have the option to refi once you actually start working.

He may have been unfamilar with the Zero Down Physician program BofA offers. I would factor in the leased car into the ratio which would affect how much you could borrow but it would be more than 80K.
Regarding the credit score required:
720: score is required
700: if you have medical student loans(who doesn't)
680: if you have a jumbo loan and student loans.
This is why it is important to make sure you are talking to someone at BofA that is familar with this program.


not sure I understand these #'s. what you're saying is that if you have debt, then you qualify for a lower credit score, and if you're taking out a larger loan, then you qualify with an even lower credit score. can you explain the reasoning behind this? :confused:

not sure I understand these #'s. what you're saying is that if you have debt, then you qualify for a lower credit score, and if you're taking out a larger loan, then you qualify with an even lower credit score. can you explain the reasoning behind this? :confused:

I think BOA is trying to GIVE us these loans, or at least make them more accessible to us because they understand our debt and consider it to be a decent risk considering our future income. In other words, they make it easier for those of us with debt to get their loans and give them our future business...

So, I spoke with a rep from Bank of America today. He told me that they can't offer the 100% physician loan to residents in states where there are no Bank of America locations. So, even with all the mergers and acquisitions that BOA has done recently, I'm still left in the cold.

On the bright side, they do offer an 80/20 loan to cover it.

I'm probably going to maximize my student loans to use as a down payment and look at ING direct.

What do you mean maximize your student loans... as far as I know, I think I've taken out what I'm allowed to this year. already took out 12k for the residency and relocation loan, took out the max for my unsub stafford and my school "doesn't deal with the med excel loan" whatever that means.

are there other options out there that i'm not aware of?

Hey,

I haven't yet taken out the full amount offered to me because I had some extra scholarship aid that was helping me out. I didn't need all the money offered as student loans. However, now that I'm looking to buy, taking out that money in loans now and using it to pay part of my mortgage doesn't seem like a bad idea for a down payment

Could someone give me some advice on an interest only loan? Is this a sucker's deal and should I stick with a traditional 5/1 ARM? I figure I plan to move in five years or less anyway and the amount of equity built up by then isn't a whole lot at the five year point...ideas?

dear joedogma,

I am in the same situation. What I was able to find was that with interest only 5/1 ARM most lenders will increase your rate by 1/8th (0.125%). On a 200K house with about 5.5% interest rate (5.625 if interest only) the higher interest-only rate (as compared to 5.5%) would make you monthly mortgage payment go up like $30-50, but at the same time you will not be paying principle so the monthly mortgage payments will also go down $200-250. So if you are not planing to gain a significant amount of equity, save your $200/month and go shoping or add that to your car payment and get a nice lexus instead of that old ford.


Could someone give me some advice on an interest only loan? Is this a sucker's deal and should I stick with a traditional 5/1 ARM? I figure I plan to move in five years or less anyway and the amount of equity built up by then isn't a whole lot at the five year point...ideas?

dear joedogma,

I am in the same situation. What I was able to find was that with interest only 5/1 ARM most lenders will increase your rate by 1/8th (0.125%). On a 200K house with about 5.5% interest rate (5.625 if interest only) the higher interest-only rate (as compared to 5.5%) would make you monthly mortgage payment go up like $30-50, but at the same time you will not be paying principle so the monthly mortgage payments will also go down $200-250. So if you are not planing to gain a significant amount of equity, save your $200/month and go shoping or add that to your car payment and get a nice lexus instead of that old ford.


How did you know I have an old ford? Very strange.... :eek: The interest only option does make sense from a monthly stand point but in the end it feels like I would just be paying rent with nothing to show except a tax break. I have run a few numbers...

With a 200k mortgage at 5% (arbitrary numbers for simplicity sake) you pay like you said about $200 a month less with nothing going toward the mortgage with the interest only option. If I were to use a more traditional mortgage, after 5 years, I would have paid about 17K of the principal. I guess the question is do I want that 17k tied up in the house or in my hand. Any appreciation on the house is an absolute number not a percentage....if I buy at 200k and sell at 240k it doesn't matter how much principle is paid, profit is still 40k. I guess the only thing to worry about (and this is always the case) is if the house actually depreciates in value I may OWE money. It seems like a risky proposition but may make sense in the short term...

You really have a ford? That was a good guess.

I think you answered your own question. They always say you should live in a house for at least 7 years to realize your earnings. Otherwise, if its any less amount of time it is not much different then renting, except you can call it your own house. 5 years is still long enough to call it a good investment. In my case I am looking for 3 years, and this is much more of a gamble. My bigest concern is the quality of life issue, and living in a the most comfortable place my wife and I can afford.

In your case with a PI (principle + interest) mortgage you would pay somewhere in 15K on principle max/5 years. From an investment standpoint if your mortgage is like at 5% you would be earning 5% (or going less in debt by that percentage). Don't forget it is not 15K x 1.05^5=19K because you don't have 15K from day one; you are putting money away on a monthly basis. Therefore don't expect to earn more then 2K on your 15K of principle you paid over 5 years. And of course, this money is tied up for 5 years. Some have argued that you will not make 5%/year in the stock morket. I think you could average at least that over 5 years. Plus the 2K is insignificant over 5 years considering you will at least triple your income when you graduate. Quality of living is important. $200/month doesn't seem much but it could make a difference between a ford and a lexus, I guess.

BTW your house will not depreciate in value. Unless you totally get screwed and overpy on your house. Look out for crapy realistate agents. At worst your house will not appreciate. In that case you still lose money, since when you sell, unless you go FSBO you will pay 6% commissions. I am assuming you will not have the time to sell FSBO. So subtract 15K on commission
off your house that is now worth 240-250K (after 5 years). Where you can potentially get screwed is if your house appreciates at only 1-3%/year depending on the economy. If it appreciates 5-6%/year it is good, but doesn't always happen. Someone advised me to start looking at new condos/houses because the value of a property appreciates at the highest rate in the first 2-3 years as a general rule.

How did you know I have an old ford? Very strange.... :eek: The interest only option does make sense from a monthly stand point but in the end it feels like I would just be paying rent with nothing to show except a tax break. I have run a few numbers...

With a 200k mortgage at 5% (arbitrary numbers for simplicity sake) you pay like you said about $200 a month less with nothing going toward the mortgage with the interest only option. If I were to use a more traditional mortgage, after 5 years, I would have paid about 17K of the principal. I guess the question is do I want that 17k tied up in the house or in my hand. Any appreciation on the house is an absolute number not a percentage....if I buy at 200k and sell at 240k it doesn't matter how much principle is paid, profit is still 40k. I guess the only thing to worry about (and this is always the case) is if the house actually depreciates in value I may OWE money. It seems like a risky proposition but may make sense in the short term...

Gotta keep this thread alive...

This is what tower had for me:

5/1ARM 80-20 Mortgage with (rough numbers) 5.5% on the 80% and about 6.5% on the other 20%. Add 1/8 of a point for interest only option.
1% origination fee on the 80% loan, $400 application fee, $490 underwriting fee.

They said they are looking for credit scores above 680...will take contracts as proof of employment (for spouses too) Seems like a good deal. BofA deal still may be better. Want to find out if BofA offers interst only option...



Keep posting your experiences mortgage shoppers!

Dear PCN,
first of all thanks for all the info. i have been reading your posts for the last few hours deciphiring every detail and they are extremely helpful. sounds like you should consider an additional career in financial advising. I had a question about your post to joedogma: When you are refering to the interest only 5/1 ARM you mention the mortgage payment would go up (by $30-50)AND then go down (by $200-250) and what you save is the difference...but i am confused on the going up and down part of this ordeal. can you clear that up
Thanks a lot!

I am in the same situation. What I was able to find was that with interest only 5/1 ARM most lenders will increase your rate by 1/8th (0.125%). On a 200K house with about 5.5% interest rate (5.625 if interest only) the higher interest-only rate (as compared to 5.5%) would make you monthly mortgage payment go up like $30-50, but at the same time you will not be paying principle so the monthly mortgage payments will also go down $200-250. So if you are not planing to gain a significant amount of equity, save your $200/month and go shoping or add that to your car payment and get a nice lexus instead of that old ford.[/QUOTE]

I'm not him, but I'll give it a shot. Two things are at work here:
1. Interest rates
2. Paying interest only, or interest plus some principle

Lets just make up some numbers here.

In a traditional mortgage on a $200,000 home you will pay 5.0% interest and the payments will be around $1200 (again, I made up these numbers), including interest and principle. A 5.125% loan will be $1250 a month ($50 more/month)

So, if you get an interest only loan, they will raise the interest rate to 5.125% which will cost you about $50 more/month (see above), but you will be paying only the interest portion of the loan which happens to be about $950.


So instead of paying $1200/month, you will be paying $1000/month because you are now paying the interest portion of the loan $950 plus a little more interest than a traditional loan $50 (950 + 50 =1000).

hope this helps

Wooo has got it figured out...I crunched some numbers...here goes...

From bofa I was quoted at 5% 5/1 ARM (this was a few weeks ago, not sure if rate is still the same). For a hypothetical $200k mortgage, monthly payment (minus taxes and insurance) would be $1073.64

From Tower, again using a $200k mortgage with 80% (or a $160k loan) at 5.5% plus the 20% (40k loan) at 6.37%...monthly payment would be $1158.14. BofA has better deal...BUT...
If you opt for the interest only option, meaning you are not paying any principal, the rates go up 1/8 a point. Then your monthly would be $966

So, if you want lowest monthly, tower IO loan is the best I have seen so far. If you are a little frightened by the prospect of interest only and want a more traditional mortgage, bofa has a great deal. Both of these are great choices imho...and both have similar requirements for qualification etc...

Also, I found out that bofa doesn't offer the interest only option on their physician loans...

Coldwell Banker Mortgage (national)
Closed on 7 Feb 05

No origination fee
No prepayment penalty
Zero points
3/1 ARM
80/20 loan
Interest only on the 80 at 5%
Principle and interest on the 20 at 8%
Middle score of 713
Borrowed $143,000

Anyone have any experience on non-warrantable loans? My gf and I decided on a condo that just started construction & thus is still in the process of getting FMA certification. From what I've been able to find online, I'm looking at adding an eighth of a point to whatever interest rate I will close at, and it also limits my choice of lenders. Does that sound about right?

Thanks

Could someone give me some advice on an interest only loan? Is this a sucker's deal and should I stick with a traditional 5/1 ARM? I figure I plan to move in five years or less anyway and the amount of equity built up by then isn't a whole lot at the five year point...ideas?


Why not take the interest only loan, then use what you save (vs. taking traditional) and make additional payments toward your principal every month? That way you build your equity faster and in addition you can write off all your mortgage payments. Does that make sense, or have I oversimplified?

Dr. Banker,
Does Bank of America offer anything to people in states like Ohio that doesn't have a location. Just wondering.

Never thougth that people would still be posting to this thread. Actually, i thinkpeople will prob get even more excited about this stuff after march 17th.

Haven't looked at this thread since late feb. You guys have posted great comments.


1. Dear spari02, sorry for not responding. Wooo answered your question correctly.

2. I will have to check this caldwell banker mortgage as someone suggested. It sounds like a good deal.

3. I have recently been looking at sallie mae mortgages. Their rates on 80/20 are not as good as tower. However, their closing fees are lower plus they give like 250-350 discount if you have student loans with them. Plus they are a reputable company. Once, match day hits and I know exactly where I am going I will have to do little more calculations and think about who my lender will be a little more. I'll try to post who I go with.

4. You guys don't get to geeked about this "Dr. Banker" guy. He is obviously trying to sell you his product. I am not saying BofA has a bad deal, I am just getting frustrated b/c this thread should not be free advertisement for companies. This is a forum for med students/residents and their experiences with whatever. I really wish someone would get him off this site.

BTW, this "dr banker" guy, in his argument is comparing two different lenders obviously tower and bofa have different rates (bofa has better rates). However, overall, as a general rule, standing in a graduating 4th year medstudent shoes, doing an interest only mortgage to live in a house for 3-5 years is better then principle and interest mortgage. Even if you do compare tower (interest-only mortgage) and bofa (PI mortgage), aknowledging their different interest rates; the tower interest-only mortgage "$107/month" savings are garaunteed money upfront (as a monthly mortgage payment reduction) versus bofa PI mortgage you are theoretically getting this when you sell the house after 3-5 years. To follow this example, overall with tower you will save 3700-3800/3 years gauranteed in monthly payment reductions versus 8000+/3years theoretically when you sell the house with bofa mortgage. (Note, these calculations do not take into account the compound interest savings on paid off principle that you would get with bofa. However, this will be only a few hundred dollars/3 years. Also these calculations have obviously nothing to do with the appreciation of the house that will also hopefully make you some money but is obviously dependent on the property itself and has nothing to do with the mortgage deal). Bottom line is this bofa deal does look appealing, and for some people who are not expecting a significant increase in sallary after 3-5 years (or for those neurosergeons who will be in residency for 7 years and are planing to stay in the same house) may be a better choice. But, I tend to think (and you guys are welcome to disagree with me) that since when we graduate our incomes will at least tripple (or probably more then tripple), this 4K difference/3 years (and paid out after 3 years) will mean much less then having that extra 100/month, every month, during residency on our very low low-middle class 40K/year sallary (Note, depending on the interest rate differences betwen different lenders comparing PI and interest-only mortgages monthly savings could be as high as 200-250/month if the interest rate differences are more comprable then bofa vs tower).

Overall comparing a principle and interest versus an interst only mortgage from two different lenders is like comparing apples and oranges. I think you have to take into account other very significant factors like how much you will pay at closing (are there any origination points...), also what your credit score, what the lender will actually qualify you for, reputation of the lender, will the lender consider your student loans in qualifying you, will they garauntee their rates when you close, will they be able to aprove you before you start your residency, do they have prepayment penelties (basically will they screw you when you refinance)... One other situation that I encountered in looking for a new condo: a lot of builders will want you to put down a $5000 deposit on a new condo that you are considering. You have to make sure the lender will reimburse you for this deposit or else it defeats the whole purpose of getting a low closing fees type of mortgage deal since you are paying all that money upfront.

if we get a tentative mortgage offer from any of these companies to start shopping for a house, can we change if we get a better offer later. For instance, if we have the paper that pre-approves us to borrow, does that also obligate us to borrow from that company.

[QUOTE=jonwilli]if we get a tentative mortgage offer from any of these companies to start shopping for a house, can we change if we get a better offer later. For instance, if we have the paper that pre-approves us to borrow, does that also obligate us to borrow from that company.[/Q
No, you are not obligated to use a given mortgage company just because you have been pre-approved with them.

Nope, had a pre-approval from Tower and decided to go with a local company that had much better deals and NO BROKER FEE!!!

:)

FYI - for those of you who are looking at the interest-only loan: THINK CAREFULLY before you do this. Granted, you will save a little each month, but in the long run, you will probably end up paying to sell your house even with standard appreciation after 3-4 years (using my 5/1 arm I've chipped $4500 off of the principle in 7 months, meaning my closing costs will be paid by the end of this year, leaving two years of "profit" in my pocket before I factor in resale). If you do choose the interest-only route, file your taxes advantageously and save (or invest) your returns each year...

Also remember that orgination fees, points, etc, while a pain in the ass when you buy hour home, will pay themselves back within 3 years due to tax deductions. Don't be myopic about buying a home - you get more from your home when you put more into it up front! That being said, don't get ripped off either. Expect to pay 1-2% of the home up front in "points" be it true points or origination fees. If it seems like a great deal, look further into it, because the bank will win regardless, and the better it sounds to you means the better the bank will be profiting off of your monthly payment!

Also - go with any loans that exclude PMI - why pay more money to make the bank feel better that you will be able to pay a mortgage that is less? It makes no sense to me...

I called Tower Mortgage and got a similar deal as the rest of you, but they roughly quoted the closing costs as $5000. That seemed a little high and I wondered what everyone else is paying.

I called Tower Mortgage and got a similar deal as the rest of you, but they roughly quoted the closing costs as $5000.
That is about what has been quoted to us on a 160K loan for a 200k house. We are preapproved, but are checking around for the best options. It was recommended to us to look at 3-4 different options and then choose.

Has anyone in here mentioned B of A's "Neighborhood Heroes" mortgage program? It's apparently good for every state. I'm a police officer and my wife is a soon to be doctor. The loan is apparently for medical personnel, police, fire, and teachers. What about this Dr. Banker? This will likely be what we need to look into. We're hoping for Indianapolis and the doctor's loan isn't good in Indiana.

At this time we do not offer the Zero down Physicians loan in Ohio. We do however offer a 80/20 product that will help you avoid PMI. It is honestly not as good as the Physician loan and hear is why:

With the 80/20 program you put 80% of the loan on first mortgage and 20% of the loan on a second mortgage. This is a creative way to avoid putting your own 20% down but still avoiding PMI. This lowers your payment but there is a drawback. That 20% second is either fixed at a higher rate or in most cases tied to the prime rate (that rate that you hear about when Mr. Greenspan is on CNN) The prime rate right now is attractive at 5.5% but it has been raised 8 times in the last six months. So guess what that does to your monthly payment everytime it goes up.
I do recommend the 80/20 but only if you are in a state the the Dr. program is not offered such as Ohio.
For a list of states that we offer the zero down Physician program in go to www.mortgagesforphysicians.com. (That was for you PCN)

Has anyone in here mentioned B of A's "Neighborhood Heroes" mortgage program? It's apparently good for every state. I'm a police officer and my wife is a soon to be doctor. The loan is apparently for medical personnel, police, fire, and teachers. What about this Dr. Banker? This will likely be what we need to look into. We're hoping for Indianapolis and the doctor's loan isn't good in Indiana.
Those programs allow for 100% financing but require PMI and typically offer higher than market rates.

Dr. Banker

I have some questions about the Dr. Loans. What if your credit isn't the greatest? I know we all have student loans but what if we have significant consumer loans? I am not sure what my credit score is, but I am pretty sure it is not 720. I kind of have an idea about what I would like to pay, I am just not to sure that I will qualify. My wife will be starting a new job soon that will pay about 80k. Should we wait until then even though I would rather buy now.

Thanks


At this time we do not offer the Zero down Physicians loan in Ohio. We do however offer a 80/20 product that will help you avoid PMI. It is honestly not as good as the Physician loan and hear is why:

With the 80/20 program you put 80% of the loan on first mortgage and 20% of the loan on a second mortgage. This is a creative way to avoid putting your own 20% down but still avoiding PMI. This lowers your payment but there is a drawback. That 20% second is either fixed at a higher rate or in most cases tied to the prime rate (that rate that you hear about when Mr. Greenspan is on CNN) The prime rate right now is attractive at 5.5% but it has been raised 8 times in the last six months. So guess what that does to your monthly payment everytime it goes up.
I do recommend the 80/20 but only if you are in a state the the Dr. program is not offered such as Ohio.
For a list of states that we offer the zero down Physician program in go to www.mortgagesforphysicians.com. (That was for you PCN)

Dr. Banker

I have some questions about the Dr. Loans. What if your credit isn't the greatest? I know we all have student loans but what if we have significant consumer loans? I am not sure what my credit score is, but I am pretty sure it is not 720. I kind of have an idea about what I would like to pay, I am just not to sure that I will qualify. My wife will be starting a new job soon that will pay about 80k. Should we wait until then even though I would rather buy now.

Thanks
It would be a good idea for you to pre-qualify. This can be done at no cost or obligation. However, be careful about having your credit report pulled too many times as this can penalize your credit score. There are many options available to you including the possiblilty of the 100% Physician Loan and 80/20 Combo loans that have many different flavors (No Income Verification, Adjustable Rates, Interest Only, etc.). It is a good idea to get at least 3 Good Faith Estimates before you buy. Take a look at my banner ad on this site or feel free to email me at dave.jones@suntrust.com with questions.

anybody have any new mortgage experiences now that we are out shopping for homes, apt, etc.

I talked to a physician loan specialist yesterday from BOA. Not Dr. Banker and was given a quote for 140k at 6% 5/1 arm with no down or PMI. The closing costs were about $4500. My credit score is above 720. Is this interest rate good? I was hoping for around a 5% rate like Dr. Banker states they can give. Also, the closing costs seem high for a loan for this amount. I really don't know much about home mortgages so any input would be appreciated. Does it matter which BOA specialist you use or can you get different quotes from different BOA loan people?

As our economy changes and our good friend continues to come out and announce increases in note rates....so then go the mortgage rates. They are dynamic. If think you can "pay down" the interest with BOA to 5.625 but this will require paying 1pt on your loan amt, which will increase your closing costs.

Just to throw in my 2 cents...I would find the 250k to be a little high as well.

Good thing you don't live in the SF Bay Area, where the median house price is $629,005 this year...

:eek:

I talked to a physician loan specialist yesterday from BOA. Not Dr. Banker and was given a quote for 140k at 6% 5/1 arm with no down or PMI. The closing costs were about $4500. My credit score is above 720. Is this interest rate good? I was hoping for around a 5% rate like Dr. Banker states they can give. Also, the closing costs seem high for a loan for this amount. I really don't know much about home mortgages so any input would be appreciated. Does it matter which BOA specialist you use or can you get different quotes from different BOA loan people?

Rates for the Suntrust Doctor Loan are closer to 5.25% for the 3/1 Arm and closer to 5.625% for the 5/1 Arm as the Fed increased short term interest rates yesterday. The action has affected mortgage rates as well. The rate that you receive is also dependant upon the lock period which is simply the number of days that your are guaranteed the rate. Closing costs include local and state taxes, title insurance, and other fees that will vary by area so get more than one Good Faith Estimate and compare costs for the same rate.

Let me say I dont work for any of these companies but I think you will have a hard time beating ING's rate.

http://home.ingdirect.com/products/products.html

Their 5/1 ARM is at 4.95% which on a 140K loan is about $750 per month (of which 170 is principal and 580 in interest) compared to paying $840(Principal is about 140 and you pay 700 per month in interest) per month on a 6% loan. And all that extra money you are paying is 100% interest.

ING also states there are no closing costs.

Finally you can use bankrate.com and go to their calculators to figure out other information. Good luck!

Let me say I dont work for any of these companies but I think you will have a hard time beating ING's rate.

http://home.ingdirect.com/products/products.html

Their 5/1 ARM is at 4.95% which on a 140K loan is about $750 per month (of which 170 is principal and 580 in interest) compared to paying $840(Principal is about 140 and you pay 700 per month in interest) per month on a 6% loan. And all that extra money you are paying is 100% interest.

ING also states there are no closing costs.

Finally you can use bankrate.com and go to their calculators to figure out other information. Good luck!

You're right the ING rate is very attractive if you have 20% to put down or want to pay PMI. The Physican Loans are 100% financing in one loan with no PMI. The closing costs they give for the above scenario are 1339.00 pushing the APR to 5.482%.

Actually they only require 10% down with no PMI, of course they also offer the Orange Home Equity at 5.5% No closing costs or app fees on here either.

djones, I am curious what is Suntrusts APR when the closing costs are like 4K+?

In the end the only things that matter are

1) Whats my monthly payment? - by my accounts lower with ING
2) What are my closing costs? - Also appear to be lower with ING.

I am no expert so if I am missing something please let me know.

Actually they only require 10% down with no PMI, of course they also offer the Orange Home Equity at 5.5% No closing costs or app fees on here either.

djones, I am curious what is Suntrusts APR when the closing costs are like 4K+?

In the end the only things that matter are

1) Whats my monthly payment? - by my accounts lower with ING
2) What are my closing costs? - Also appear to be lower with ING.

I am no expert so if I am missing something please let me know.

It matters to those who do not have $15339.00 (10% down + closing costs) plus escrows for taxes and insurance. My earlier point is that these ING loans do carry closing costs although they are very low and that these costs do impact the APR. It appears that you have been looking at an 80/10/10 Combo Loan program with two loans and a 10% down payment. Most lenders offer these programs to avoid PMI. As I have said, it makes good sense to get more than one Good Faith Estimate to ensure that you are comparing similar programs and costs.

got an estimate today from BOA. 250K on a 5/1 ARM at 6.25% is around 1900/month payments, which includes taxes and insurance. Just some insight!!

Is the SunTrust mortgage good in states where there is no SunTrust branch. I know the BOA mortgages are not. I will be buying in NC and am wondering. I see BOA interest rates higher than most others, but consider that part of the "price I pay" for not having the downpayment AND not having to pay PMI (which is a big bunch of money). Just wondering and considering giving SunTrust a call. Also, does SunTrust have a lockin rate feature for their doctor loans? BOA does NOT lock in the rate...and with rates going up, and going up again in May, I am concerned my payments will just get higher andhigher.

Is the SunTrust mortgage good in states where there is no SunTrust branch. I know the BOA mortgages are not. I will be buying in NC and am wondering. I see BOA interest rates higher than most others, but consider that part of the "price I pay" for not having the downpayment AND not having to pay PMI (which is a big bunch of money). Just wondering and considering giving SunTrust a call. Also, does SunTrust have a lockin rate feature for their doctor loans? BOA does NOT lock in the rate...and with rates going up, and going up again in May, I am concerned my payments will just get higher andhigher.

You should be able to lock in rates with BOA if you have a property address. It may require 1/2 or 1 point, but in the grand scheme of things, it will likely save you money.

the only other thing is you can look in the paper and find much cheaper interest rates, for ex. with 5% down in the paper today, you get 4.85% on a 5/1ARM. Now this may be a crap company, who knows???

Is the SunTrust mortgage good in states where there is no SunTrust branch. I know the BOA mortgages are not. I will be buying in NC and am wondering. I see BOA interest rates higher than most others, but consider that part of the "price I pay" for not having the downpayment AND not having to pay PMI (which is a big bunch of money). Just wondering and considering giving SunTrust a call. Also, does SunTrust have a lockin rate feature for their doctor loans? BOA does NOT lock in the rate...and with rates going up, and going up again in May, I am concerned my payments will just get higher andhigher.

Suntrust does offer the program in NC(having acquired CCB and NCF)and can lock in your rate for up to 60 days or you can get pre-approved and "float" your rate. BOA should be able to lock your rate as well. Let me know if I can help, www.suntrustmortgage.com/davidj. I'll email to you a good faith estimate for you to compare.

Here are my questions.

1. It says the student loans have to be deferred for 12 months. BOA actually does not require this. Mine are deferred until Dec 1, then I have to re-apply (every year). Would this lead to disapproval?

2. My husband wants to apply with me. He is active Duty Navy, has to stay where we are one more year but then is moving where i am as his commitment with USN will be over. Would he be able to be on the application with me? BOA had some trouble with underwriting but is getting by that somehow by saying that where we are now is not his permanent residence (which I consider true since all of our stuff will be in NC he will only be here temporarily to fulfill his Navy commitment.)

Now, If he can't be on the application with me how much are residents getting pre-approved for with salary of 40K. The only other debt I pay is a carpayment of about 280, two undergrad student loans of 57 per month total. We both have excellent credit scores (above 720) and have been preapproved together for 200K from BOA (thank goodness we aren't moving to San Francisco, we wouldn't even be able to afford rent!). Just trying to get an idea if its even worth me contacting Suntrust if these issues can't be resolved.

Here are my questions.

1. It says the student loans have to be deferred for 12 months. BOA actually does not require this. Mine are deferred until Dec 1, then I have to re-apply (every year). Would this lead to disapproval?

2. My husband wants to apply with me. He is active Duty Navy, has to stay where we are one more year but then is moving where i am as his commitment with USN will be over. Would he be able to be on the application with me? BOA had some trouble with underwriting but is getting by that somehow by saying that where we are now is not his permanent residence (which I consider true since all of our stuff will be in NC he will only be here temporarily to fulfill his Navy commitment.)

Now, If he can't be on the application with me how much are residents getting pre-approved for with salary of 40K. The only other debt I pay is a carpayment of about 280, two undergrad student loans of 57 per month total. We both have excellent credit scores (above 720) and have been preapproved together for 200K from BOA (thank goodness we aren't moving to San Francisco, we wouldn't even be able to afford rent!). Just trying to get an idea if its even worth me contacting Suntrust if these issues can't be resolved.

I'll check on these issues with our underwriter tommorrow. My sense is that you will qualify for what you'll need without the deferral.

Better, you may qualify for a VA loan which is also 100% with no PMI.

has anyone done a www.lendingtree.com search and seen what they can get? There are mortgage companies that will approve you with only 5% down as well, which is 10K on a 200K loan (obviously)

Hey guys,

Are any of you guys or gals going to buy a coop? I am a PGY-I and I am in the process of buying a 2 bdrm coop in NY. It's a lot cheaper than buying a condo, actually a $100,000 cheaper. What are the pros and cons of buying a coop vs actual real estate? I am still learning the process of purchasing real estate in NY.


thanks

still waiting to see what the underwriter says.....

I looked into lending tree. I got offers back and all, but there were kind of odd people. I didn't really buy that they had great deals, etc.

For anyone who has military ties, either yourself, a spouse, or a parent, look into USAA. It's a military banking, insurance, and brokerage company. To be honest, I got approved for more with nothing down, no pmi, etc and to top it all off they have great rates. Granted you'll get better rates from ING, but then again, you need 10.1% down plus closing costs.

good luck.

still waiting to see what the underwriter says.....

Sorry CLC17-have been out of the office. The Underwriter says we can include your husband's income in the qualification ratios. We can also do the VA loan but those carry a VA funding fee. Send an email or call if you like.

I am considering using Mike Smela at Physician Lender/ Carteret Mortgage. He offers basically the same loan program as BOA with 100%, no PMI, no student debt in DTI, move in/close 3 months before start date. He hasnt gotten a firm number for his interest rate yet, but estimated, on the high end, that it would be 5.75% (boy how rates have climbed since this thread started!) on a 5/1ARM, and the same rate on an Interest Only (I/O) 5/1 ARM. I have talked to him for a month via email. He seems like a good guy. The only "trick" I can find is the 1% origination fee. I sent his good faith estimate to 3 other lenders/brokers. One guy came back with an 80/20 with pretty good rates, but the 20 was HELOC and variable with the PRIME, which, as we all know, just went up. That guy told me "boy, that loan looks pretty good - I wish I could offer a loan package like that."

The summary of the GFE on a 5/1 ARM $210,000, 100%, no PMI:

Interest Rate: 5.75%
P&I = 1225.50 / month
Est Closing Costs = 4214 w/ the 1% origination fee


If you wanted to Interest only, he said the rate was the same 5.75%. There was no increast. So, in the above summary, you are paying $218.75/month towards your principle. With Interest only, your monthly payment is 218.75 cheaper, or $1006/month.

I dont know, but this seems like a pretty good deal. He was still trying to get his rates finalized through his credit unions. The no PMI is truly no PMI, not 80/20, or 80/10/10. He offers this loan in almost all states as far as I can tell. I am going to Utah, and it seems like most of these national chains werent offering loans in Utah. I am getting pre-approved with the guy, and going house hunting April 8.

I'll be starting residency (min 5 years, 7 if fellowship) so I'm also looking to purchase. I've read through this forum and found the info helpful...thanks to all the previous contributors...

It's end of March and I'm hoping to purchase a place to move into by early May. I have a few questions (i apologize if they've been already answered and i missed them).

1. how long does it take to start applying for a loan and be ready to actually purchase a condo?

2. since I've been a med student for the past 4 years (I have no paystubs), will I be able to get a loan? For example Washington Mutual requires at least 2 paystubs for their home loans.

3. how do i purchase a condo from a private seller? do i get a loan approved and have the lender pay the seller directly without going through a realtor, since the seller is selling on his own?

thanks for all your help in advance. :love:

1. shouldn't take long to pull your credit report. start calling lenders NOW.
2. I've ran into the same problem. I think the best is to find an instate broker/lender with whom you can go and talk to directly. Talk to your residency program see if they can recommend a broker who has helped previous interns to be. Basically, if you have your offer letter, many of the brokers can go to the underwriters with this info. You don't have to have a job yet, you just have to show that you will have one.
3. This might sound a little scary, but if you go by FSBO (without a realtor) you should probably have someone look at the contract (a lawye perhaps). Otherwise, I think it should go just about the same as if you are going to by with a realtor. The only difference is that with a realtor the seller is going to pay 4-6% commissions, and probably charge more by that amount

hope this helps
I'll be starting residency (min 5 years, 7 if fellowship) so I'm also looking to purchase. I've read through this forum and found the info helpful...thanks to all the previous contributors...

It's end of March and I'm hoping to purchase a place to move into by early May. I have a few questions (i apologize if they've been already answered and i missed them).

1. how long does it take to start applying for a loan and be ready to actually purchase a condo?

2. since I've been a med student for the past 4 years (I have no paystubs), will I be able to get a loan? For example Washington Mutual requires at least 2 paystubs for their home loans.

3. how do i purchase a condo from a private seller? do i get a loan approved and have the lender pay the seller directly without going through a realtor, since the seller is selling on his own?

thanks for all your help in advance. :love:

I too will be looking to buy a place for residency. This forum has been very helpful since I started out knowing nothing about the whole process.

I plan to start calling some lenders this week. Just wondering what information I will need to give them when I call so that I will be prepared? And how long does it usually take to get preapproved?

got some prerappoval stuff. BOA ono 5/1ARM is 6.15% and SunTrust is 6.375% but has aboutt 2000 less closing costs it appears. ING does have a decent deal if you can put down 10.1%

anybody have any other up-to-date rates as they continue to rise???

Physician Lender at 6.25 on the 5/1 ARM today. DAMN the rates.

Comparing rates like this is pointless. The details of your situation---what state the property is, whether it's a condo, whether or not your credit is good, how much down payment you have, how much money your spouse makes---have a huge effect on the rate any place can give you. This makes newspaper ads or banner ads or whatever essentially useless as well.

So if someone here says something like "5.75% at ABC Mortgage" and you try, and they say 6.25%, it's because the situations are different. Conversely, don't be scared away if someone here says something like "6.75% at XYZ Loans", because for your situation they may be able to do much better.

Unfortunately, in shopping for mortgages, there's so substitute for actually doing the leg work.

(Actually, you can try a mortgage broker, but that opens up a whole new can of worms. Don't start with a mortgage broker without understanding the nature of the relationship you're entering into.)

I disagree. These niche loans tend to be the same across the board. We established early on that we were trying to compare apples to apples.

Please expand on your mortgage broker ideas.

I disagree. These niche loans tend to be the same across the board. We established early on that we were trying to compare apples to apples.

Please expand on your mortgage broker ideas.

Suntrust Physician Loan 5/1 Arm rates today 5.625 and 5.375 for the 3/1 with 1 point orgination fee. Rates are 6.0 and 5.625 with no points or origination fee. Email inquiries to dave.jones@suntrust.com

Salem mortgage - got three quotes (found them through Lending tree, you can get United miles)
5/1 arm with an 80/20 5.75%/7%
5/1 arm interest only also 80/20 5.875/7
30year fixed 6.25%/7%

There is a 1% origination fee. No PMI

I didn't qualify for BOA because of 677 middle credit score, and they wouldn't use my SO because she hasn't found a job where I matched yet. They could use 33% of her income but would have to look at all of her student loan debt because she is in repayment

My BOA physician loan details (approved today!)

5/1 ARM 100% financing at 5.75% on 161000 loan
No origination fee (the way my broker structures it) but I'm paying about 1 point to keep the rate below 6%

Est closing costs: 4200 (kind of steep but that's b/c of the point I'm paying, thankfully I've got seller concessions to help out)

How did you get the origination fee waived? Physician lender is offering me basically the same options, pay down 1 point takes you to 5.75, 2 points, to 5.25. I would love to have the origination fee waived in exchange for being able to pay down a point. Very interesting. I doubt they will let me do it. Too bad BOA isnt offering this loan in Utah.

How did you get the origination fee waived? Physician lender is offering me basically the same options, pay down 1 point takes you to 5.75, 2 points, to 5.25. I would love to have the origination fee waived in exchange for being able to pay down a point. Very interesting. I doubt they will let me do it. Too bad BOA isnt offering this loan in Utah.

They probably would let you do it. A discount point is the same as a point in origination fee in terms of cost. Both are 1% of the loan amount. To some degree it's a matter of semantics, although discount points are generally tax deductible whereas origination fees generally are not. There would be no problem at most lenders reclassifying the point. So, for example, the rate today from me was 5.625 on a 5/1 Dr. loan with no orgination fee and 1 discount point.

Just wanted to say that I got approved on a 7/1 arm interest only through an independant broker my real estate agent knew, but I locked the rate in a few weeks ago. Its 5.375, no points, ~3000 in closing costs. I'm pretty excited I locked in when I did, I think 3 days later, their rates went up almost .5%!

Fifth Third Bank
3/1 ARM
no down payment
no points
no PMI
170,000
5.25% interest rate
$1250 on closing costs
Got this on just a residents salary and a 718 credit score

We thought BOA was the only lender with no money down, no PMI, blah blah.

We have found Wachovia has these mortgages, at better interest rates, though closing costs are a little higher, but still less than if you pay the 1 point to keep your interest rate lower.....I think BOA for our 165 K loan was 6.125 without paying the point, Wachovia was5.875 today without any points and closing costs around 5k.

Other banks we know of that offer resident type of loans are wells fargo, RBC
(royal bank of canada) First union should since they own wachovia, and suntrust. Trust me. BOA does not have the best interest rates on these loans at this time. I don't work for any of these banks. Just a resident trying to buy a house.

with wachovia you need credit of 680 or better.....700 or better if you want the seller to pay some closing costs.

We thought BOA was the only lender with no money down, no PMI, blah blah.

We have found Wachovia has these mortgages, at better interest rates, though closing costs are a little higher, but still less than if you pay the 1 point to keep your interest rate lower.....I think BOA for our 165 K loan was 6.125 without paying the point, Wachovia was5.875 today without any points and closing costs around 5k.

Other banks we know of that offer resident type of loans are wells fargo, RBC
(royal bank of canada) First union should since they own wachovia, and suntrust. Trust me. BOA does not have the best interest rates on these loans at this time. I don't work for any of these banks. Just a resident trying to buy a house.

I guess it just varies from quote to quote, broker to broker. I posted my stuff above and it is a hair better than yours, but pretty comprable. I guess I'd say that no one bank is necessarily superior - people should continue to shop around! When I got a quote from Wachovia - they required paying monthly PMI, and I REFUSE to pay outright PMI (I know it's structured into others but so be it)

Wells fargo told me that they dont offer anything even close to these physician loans. They told me that I would just be disappointed, and to stick with what I had found already - Smela.

Yeah, your rate with BOA is slightly better because you are paying the point to get it better. We aren't paying any points, but our closing costs come out similarly to those if we went with BOA. Wachovia does not require PMI. In the end its all better than paying more than 6% interest.

Also, Wells Fargo does have a mortgage according to what was sent to me in our residency packet. I haven't checked much into them, but they advertise here.

We aren't using a broker, so we saved that fee by doing the work ourselves.

[QUOTE=docuw]

If you wanted to Interest only, he said the rate was the same 5.75%. There was no increast. So, in the above summary, you are paying $218.75/month towards your principle. With Interest only, your monthly payment is 218.75 cheaper, or $1006/month.

QUOTE]

i too have thought about buying a condo in chicago, i think id have to take out about 200k, so the above rates would be applicable... but when i realized that id only be paying about 200 per month towards the pricinipal, i figured i could put away at least 250 per month in some low interest savings account and make more money for a downpayment after im done with residency. is there another benefit of homeowning that im missing other then equity? are there tax benefits or deductions that you can make if you own rather then if you rent?

i is there another benefit of homeowning that im missing other then equity? are there tax benefits or deductions that you can make if you own rather then if you rent?

Um. yes. you can deduct ALL your interest payments off of your federal and possibly state income taxes. Ie: for a 30 year loan at 6.5% for 200,000 dollars. you could deduct $12,000 off of your taxes every year.

Lets consider a hypothetical situation where you're making $45,000 a year.
If you dont have the loan i just mentioned, your federal income tax will be around $8000. If you have the mortgage, your yearly income tax is going to be $5000 . Sounds pretty advantageous to me (note: this benefit really comes into play more with more expensive houses and larger incomes.)

Yeah, if your yearly mortgage interest, plus any other itemizable tax deductions (including charitable donations, property taxes, points paid, education expenses, etc) are greater than what your personal standard deduction ($ 4850 for single individual) or joint standard deduction ($ 9700 if married), you can lower your taxable income by that much more. Lower taxable income = lower federal income tax. You have to itemize all that stuff out on Sched A.

Plus, dont forget that there are two ways to build equity. One is to actually pay down your principle loan. The other is to have the value of the property appreciate over the life of your ownership.

What is BOA? How do they treat student loans? Where can I find info on their program? Same for Wachovia and Wells Fargo? I have heard there are loans available where student loans aren't counted. Anyone have any info on these? New to this whole thing. TIA.

How does 5/3 handle student loan? How can I get info on this program?

Besides ING, anyone have a recommendation for where to look for better rates if I can down 10-15% on a 160-200K home?

Does anyone have any recommendations for a home loan with a credit score of 620? I'm working to get it raised but don't want to wait 30 days for everything to process and then wait again to get pre-qualified, etc and closing time. I would like to act quickly because I've found a home that I'm in love with. I'm looking at 150K but can't put any money down. Really any help would be so greatly aprreciated because I want to act fast. Thanks

i too have thought about buying a condo in chicago, i think id have to take out about 200k, so the above rates would be applicable... but when i realized that id only be paying about 200 per month towards the pricinipal, i figured i could put away at least 250 per month in some low interest savings account and make more money for a downpayment after im done with residency. is there another benefit of homeowning that im missing other then equity? are there tax benefits or deductions that you can make if you own rather then if you rent?

I'm looking at buying in chicago. I was just there this weekend looking at lofts in the S. Loop but finances are going to be real tight since I am single and my only income is the $42,000 I make during internship.

Are there any single people out there who have or plan to buy a house/condo/loft for around 200k without putting anything down? Should I expect finances to be too tight to be worth it?

I am searching for up to 250k with 42000. Figure after taxes, you will bring home around 2800/month. Interest only on a 210,000 home is about $1050 + taxes/ins --> around 1300. So, in Chi-town, you rent an apartment for 1500/mo, or you buy something with tax breaks and possible appreciation in value and make an investment..

Don't forget to add in taxes and property insurance. with one of the banks on a 250K loan, it worked out to about 1900 with all three included. 200K loan was 1576 with mortgage payment, taxes, and property insurance divided over the 12 monthly payments

Hey guys,

Are any of you guys or gals going to buy a coop? I am a PGY-I and I am in the process of buying a 2 bdrm coop in NY. It's a lot cheaper than buying a condo, actually a $100,000 cheaper. What are the pros and cons of buying a coop vs actual real estate? I am still learning the process of purchasing real estate in NY.


thanks

With a coop, the building is a corporation in which you are buying stock. The corporation owns the building and pays the mortgage, etc. Paying for this stock entitles you to occupy the building. The amount of money you pay is proportional to how nice your apartment is (floor level and square footage).

Since you don't own the real estate, you can't get a traditional mortgage. There is financing available, though.

On a practical level, the the coop board (voted by residents) essentially has more control over the things you do with your property and have to approve anyone who buys your apartment when you sell. They can restrict you from subletting, having pets, painting in loud colors, or showering at night.

It is cheaper, but it kind of makes my skin crawl.

Here are a couple of good websites:
http://www.wisc.edu/uwcc/info/condo.html
http://www.realtordan.net/condo_v_coop.cfm
http://www.mortgagecom.com/coopcondo.htm

'zilla

Interest only on a 210,000 home is about $1050 + taxes/ins --> around 1300.

When I worked out the finances at BankOne they said taxes/ins. would be closer to $250, a