Need advice re. buying home, dr's mortgage, etc.

I did a zero down loan and of course now regret it. I expected to be there for many years, but up and left for a new job after one year. Now I can't sell the house and as I keep dropping the price, I keep dropping cash. I would say if you will be somewhere for a while and you get a good deal since it is a buyer's market, you will most likely come out ahead. 3-4 years ago I would have done just fine and most likely would have made money in one year. Just too hard to predict in the short term..good luck..

10k is plenty to cover closing costs (1-2k, but that depends upon whether your mortgage charges you a point -- when people have posted here in the past about doctor's loans, I think they said that it was 0 down, but they had to pay a point (also called an origination fee) or 1% of the loan amount.) and in some parts of the country would also make a nice downpayment.

You should look into 80/15/5 piggyback loans (if you have good credit and low/no other debt.,) as well as FHA loans (3% minimum down payment.)

With the recent mortgage shakeup, I think 0% loans are going to be hard to get, but the physician's loan has always been somewhat of an odd duck, because, I'm sure that the default rate on those loans is pretty low, so they may stick around.

Good luck! Now is probably a good time to buy.

Do research about home values in your area and watch them for the next couple of months. Some areas are doing better than others. Also depends on how much you want to spend how much you downpayment has to be. If you're a first time home buyer you'd be eligible for FHA government loan. As the time gets closer I'd look at what mortgages are doing then. The physician loan will still be around. We got one because we plan to be here for at least 6 years (got a 7/1 arm). We're also going to fix up the place too (needs new bathrooms - unfinished basement, upgrade air/heat, etc). So it all depends on what you find at an affordable price range. Be glad you didn't buy before b/c your value would have gone down a little.

so for the next few months make sure your credit is good (better rates), start looking at where you want to buy and what you can afford, and what mortgages are set. You have a good 2 months until you need to get your mortgage ready. Any other questions, feel free to ask. also search the forum for some threads with great links. You need to consider utilities and home insurance with your housing cost

I am curious about this as well, but I know very little about the pros and cons of a "doctors"-type mortgage package.

dr doze said:

"doctors type" mortgages are a marketing attempt to play on your vanity.

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Agreed. There isn't much transparency in this area so it is hard to compare apples to apples between mortgages. Your options with a mortgage are generally these:

1) Put 20% down and get a good rate on the other 80% (conventional loan)
2) Put less than 20% down, get a okay rate, and pay PMI to protect the lender.
3) Put less than 20% down, get an okay rate on 80% and a bad rate on the remaining amount.
4) Get a 100% VA, FHA, or "doctor's loan", usually get an okay rate

The problem is that there are two fudge factors which are nearly impossible to equalize between lenders to compare apples to apples with. The first is the lending fees, the second is "points." A lender may offer you a lower rate, but will require more points. Or in order to trap a savvy buyer, they'll give you the same rate and points, but tack on a few extra fees you won't know about until closing. In order to really keep you from being able to compare different loans, they change their rates 1-2 times a day so a quote you got yesterday can't be compared to one from today. One way around all this is to hire a mortgage broker to do this comparing and shopping for you, but unfortunately, you'll have to pay him too (although it is often worth it.)

I'm of the mind that a doctor's loan isn't a free lunch but that they make up for it with higher fees and rates when compared to a conventional. However, if you really feel you need to buy a house and have less than 20% down, it may be your best option. I don't think they're cutting doctors a break out of the goodness of their heart or because our income will soon go up or because the default rate is low or any other reason. I don't know any financial professionals that cut doctors a break, most of them will stand in line to take advantage of us.

ActiveDutyMD said:

The problem is that there are two fudge factors which are nearly impossible to equalize between lenders to compare apples to apples with. The first is the lending fees, the second is "points." A lender may offer you a lower rate, but will require more points. Or in order to trap a savvy buyer, they'll give you the same rate and points, but tack on a few extra fees you won't know about until closing. In order to really keep you from being able to compare different loans, they change their rates 1-2 times a day so a quote you got yesterday can't be compared to one from today. One way around all this is to hire a mortgage broker to do this comparing and shopping for you, but unfortunately, you'll have to pay him too (although it is often worth it.)

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This is illegal. Not saying that it doesn't happen, but any broker/lender that does so is violating the truth-in-lending act. Otherwise, I agree with pretty much everything that you are saying.