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"Doctor Loan/Physician Loan Programs"

Discussion in 'Finance and Investment' started by slazenger, Mar 3, 2007.

  1. slazenger

    slazenger New Member
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    I'll be a new intern in MI starting in June. Does anyone know where I can get a Physician Loan or the like for 200K ? Thanks
     
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  3. Dr.Dicky

    Dr.Dicky Original P-I-M-P
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    Just PM'd you with that info
     
  4. slazenger

    slazenger New Member
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  5. kaos

    kaos Web Crawler
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    I hate to ask a dumb simple-minded question, but what exactly are the benefits of getting a "doctor's loan" vs a regular old loan with a bank?
     
  6. mshheaddoc

    mshheaddoc Howdy
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    Doctor Loans do not count your student loan debt, will sometimes have no PMI, and can offer you products such as an ARM that will only be for say 3-5 years. Usually the rate is higher and they are usually brokers who "tout" these loans. And yes, there are always fees.

    I know a few companies that offer "physician relocation" or "emerging professional" loans but don't advertise them. Some of the major lenders do (countrywide, PHH, WaMu etc) but with all the guideline changes recently I'm not sure how this will affect their products.

    Some other loans I've come across and I have NO idea about them:
    http://www.nadonline.com/mortgages/
    Sun Trust http://www.suntrustmortgage.com/
    Carteret Mtg http://www.physicianlender.com/ (someone on the mtg thread mentioned them)

    And there are a few more but I don't have the time to post the link. If you want to google there are a ton out there. Although if you read the stickied mortgage thread there were only a few that popped up.

    Anyone use http://www.residentphysician.com/ ? If you submit your info supposedly someone will contact you. I don't like that idea (and didn't submit all the info) but i'm going to see what they say to us as an experiment.
     
  7. The White Coat Investor

    The White Coat Investor AKA ActiveDutyMD
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    It is important for med students/doctors to realize these companies aren't cutting you a break out of the goodness of their heart. Doctor's loans usually aren't a better deal than anything else once the fees and the higher rate are added in. Avoiding PMI and avoiding an 80/20 loan sound like a good idea, but it only takes a slightly higher rate or slightly higher fees to make the offers equivalent.

    As far as not looking at your student loans...come on. Do you know ANYONE who has had trouble finding a lender in the last few years? Why do you think all this subprime stuff is in the news?
     
    Mad Jack likes this.
  8. tkim

    tkim 10 cc's cordrazine
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    Here's some of my personal experience:

    I've asked about loans from Suntrust, Compass, Physicianloans, Countrywide.

    There's a lot of variability when it comes to lenders knowing their own products, i.e., some had vague ideas of what a physician loan was, others specifically offered them.

    1) Suntrust - received a mailer specifically offering physician loan - 100%, no PMI, 7/1 ARM @ 6% with 1 point origination fee. Very pleasant, timely responses, understands the residency 'thang'. Currently working with this lender most.

    2) Compass - also very quick in returning emails, also offers 100%, no PMI, 5/1 ARM @ 5.875% with 1 point origination fee. Said they recheck credit history before closing, so if you want to avoid that I would not go with them.

    3) Physicianlender - slow to respond, mildly evasive about higher fees in their good faith estimate - kinda sheisty. 100% no, PMI, 5/1 ARM @ 6% with 1 point origination fee.

    4) Countrywide - had no clue about physician loans.

    While the interest rates are pretty similar, the closing costs varied wildly between lenders. The lowest so far is Suntrust, and Physicianloans is highest.

    Still trying to figure out which lender we are going with. If anyone wants specific contact info, PM me.
     
  9. mshheaddoc

    mshheaddoc Howdy
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    The reason why they are so high for GFE (just got off the phone with them) is because they include 3 mns ins and 4 mns taxes as a precaution so you don't have any unexpected issues at closing. Most places will only require 2 mns each but it can vary depends on where you are closing.

    I'm actually considering going with them with talking to them as its not that bad of a deal. They also have a 80/20 (6.0/7.5%) which isn't a better deal than the 7/1 of 6.25%.

    Also guys, ask about the APR. That is THE BEST way to compare mortgages across the board.
     
  10. tkim

    tkim 10 cc's cordrazine
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    Here's the active spreadsheet we've been using:

    http://spreadsheets.google.com/pub?key=pSC2oz-c7FHUPItUq-nspKQ

    Just got an updated GFE from Compass. Now wondering why Suntrust doesn't have mortgage tax and title insurance in their GFE, and why they require 6 months of prepaid county tax while Compass only requires two and Physicianlender requires four.

    It's a lot of money to bring to the table any way you look at it.
     
  11. mshheaddoc

    mshheaddoc Howdy
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    Well GFE's are only estimates. Which is why you get a "surprise" at closing as you might have read in some of the other threads.

    Each state/county/city have different requirements for prepaids at closing. It will depend on when taxes are paid, when you close, if the borrower had already paid taxes you will owe them, etc. Also depends on the product you are using as different products have different requirements as each lender has different investors that require different items for the loan. Its very confusing.

    I was weary of the Physician Loan person, especially when he gave me the APR that was 1% higher than the interest rate, but he gave me a break down of all the fees and then I understood why closing costs were so high. The guy started to explain things more when I started asking questions (as well as kissing my butt which got old) after he found out I was in the mortgage industry. Alot of these lenders will just "gloss over" details such as the prepayment penalty, the credit report repulling (that was a GOOD catch tkim!), APR, closing costs, extra "fees", etc. They figure many physicians probably don't know much about mortgages. For the vast majority, they are right.
     
  12. tkim

    tkim 10 cc's cordrazine
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    I anticipated this, and asked each lender to call my realtor to get numbers particular to that area, to prevent such a drastic difference between the GFE and actual closing costs. I'm trying to figure out how the numbers are different even after talking to the same realtor and closing attorney. Doesn't matter, as I don't have to choose until closing.
     
  13. chickenscratch

    chickenscratch really, reallly cool
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    Okay, so I've been working on this mortgage stuff for the past three weeks, and after much ado with the physician lenders and local lenders, here's the bottom line:

    I found a local bank that has "in-house portfolio loans", which means that they hold the mortgage note themselves and thus don't have to conform to all the requirements of FannieMae and whatever else on the bigtime secondary mortgage market. The advantage is that they can do whatever the hell they want with your student loans: disregard them, ask for deferrment letters, pay them off (joke), but the bottom line is that they will likely be more lenient about including them in your debt/income ratio.

    The rate I got is 5.75%, 5/1 arm, 3% down, no points, no PMI, $300 lender loan fee, then all the other usual closing costs which are reasonable. they are a community bank and I think that part of the reason they offer such a great rate and no fees is because it is a good PR thing and looks good on their lending audit.

    Either way, physicanloans, brokers, and even credit unions couldn't come close to this. They might meet the rate, but they would have higher closing fees; or they would have lower closing fees but require PMI. As ActiveDutyMD mentioned, the fee nickel and diming can really add up and negate any other benefit the loan seems to have. Check out the Mortgage Professor's Calculator to compare two loans with varying fees.

    The moral of the story, at least for me, looking in the midwest: The local brick and mortar banks have come through with some of the best deals. The physican loans seem to all cost more, but if I couldn't put any money down, none at all, I would be forced to go with them.

    Comments, questions, concerns? PM me if you want more specific info.
     
  14. Jocomama

    Jocomama Make 'em bleed!
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    FYI - Bank America and Suntrust are available in other states via brokers (that they do not do retail in), who have access to their wholesale rates, which often times are better than the retail rates in states they ARE able to lend.
    Local brick and mortar are good in some midwest states (WI), but can't say that happens in others (IL, IN)

    Also - the 80/20 (no PMI) is available with high credit scores, and the lender WILL disregard your student loans if there is a 3yr proof of deferrment. This is done via a broker through wholesale programs: the first loan goes to ING, and the 2nd loan goes to National City. This has allowed the overall best rate/costs for the 0 down loans. (Unfortunately one could not do this directly with either together)
    PS - Countrywide may not have physician loans but they do the 80/20 combo; unfortunately, as one who worked there before - their 20% seconds are not competitive; but their "no doc" are the best, if you have the high credit score; I did several colleagues who had not sold one house, but needed the mortgage on the new house and it was a sweet deal (called their "Fast and Easy" program)


    You may PM me for more information.


    NOTE: In accordance with the rules of SDN, and this forum, I do not do these loans, nor do I obtain any financial benefit should a referral be offered to a banker or broker via PM.


    Great input from Chickenscratch!!:
     
  15. praha12

    praha12 Junior Member
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    Anyone gotten a Dr. loan in Utah, or have experience with physicianlender.com in another state? It's the only lender I could find that offers Dr. mortgages in the state of Utah. We have a local branch of Countrywide here as well, but they have no idea what a Dr. mortgage is...I don't think they're very smart.

    Any information will be greatly appreciated.

    -Praha12
     
  16. Rain Elizabeth

    Rain Elizabeth Cutie Member
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    Any ideas for mortgage lenders in Massachusetts who do these "doctor's mortgages?" I know Bank of America does them... Anyone else?
     
  17. usnavdoc

    usnavdoc Senior Member
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    Suntrust. Not sure if they are in Massachusetts but they have a better deal than BOA.
     
  18. BADMD

    Physician 10+ Year Member

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    I worked with a company out of Colorado (not buying in CO) who has a guy that specializes in physician loans. They have the same requirements as all other lenders, but they have more experience in how to obtain the proper documentation to satisfy the requirements to get the lowest rate and the best loan for you.

    If you want the info, PM me.
     
  19. mjzoey

    mjzoey New Member
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    I am using physician's loan, by tower mortgages. They are from Ohio, but liscenced to do mortgages at other place. I am trying to buy a house at upstate NY.
     
  20. OBGYN07

    OBGYN07 New Member
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    I currently using Physician Relocation Services. If you go to they will ask you where you are looking to buy, then they will give you numbers to lenders, brokers, and real estate agents in that area. They are AWESOME! They also give you great interest rates, even if your credit score is less than 700!!! Good luck! :D :D :D
     
  21. arez

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    thanks for posting the website but can you check the URL? It seems the address is not working.
     
  22. Wifty

    Wifty Eccentrically Silly
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    US Bank gave us a MUCH better deal then BofA or the other lenders.

    100% financing, 0 down, no PMI, interest only available, could have lower scores then the other places.

    Not all the people there know that they do doctor loans though, so here is the link to the guy we used.


    rebecca
     
  23. Wifty

    Wifty Eccentrically Silly
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    USBank has a doctor loan program, but not all the lenders there know about it, PM me if you want a link.

    We got 5.75% with 0 down, 100% financing, no PMI, no points, and they let us have a lower credit score then some of the others.

    We did the interest only, but there are other options available.

    Good luck!
    rebecca
     
  24. Rogerswife

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    This link should work:
     
  25. mshheaddoc

    mshheaddoc Howdy
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    I'm going to move this to the finance forum where most mortgage discussions are already taking place.
     
  26. chickenscratch

    chickenscratch really, reallly cool
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    i just want to caution everyone to take a long hard look at the Good Faith Estimate when you receive it from these "doctor's" lenders. They often will not tell you about 1% orgination fees and extras that make the final cost of the loan horrendous.
     
  27. blanche

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    So stupid question maybe....but do you always have to pay for pre-approval? (ie $50, $75)
    I've just started calling around and for some reason, I thought this was free....
     
  28. Wifty

    Wifty Eccentrically Silly
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    We got pre-approved through 3 separate people (we kept finding better rates) and didn't have to pay at all. I don't know if we got a special break though cuz of being a doctor and them really wanting our money. :)

    We went through the doctors loan program though USbank and didn't pay a thing. In fact, got a check for a few hundred dollars at closing.

    good luck!
    wifty
     
  29. bkpa2med

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    Pre-approvals are free.
     
  30. chickenscratch

    chickenscratch really, reallly cool
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    just a warning again to everyone who is looking at these "doctor" loans. a lot of places will not tell you about origination fees and other significant b.s. charges until they give you a good faith estimate (GFE). the best way to compare two lenders w/ similar rates is with this GFE document. as an example, i went through the application with physicianloans.com, who told me that my only fees would be $1200 for closing fees. well, there was also an origination fee that showed up on the GFE for over $2500. i think the better business bureau should be getting involved with dishonesty in how these mortgage lenders disclose fees.
     
  31. mshheaddoc

    mshheaddoc Howdy
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    That is a good point. That is why people need to know how the "mortgage system" or other financial venues work before jumping into making an investment.

    You can do better if someone is charging you a point fee. Our lender is giving us a physician loan with no points (we're choosing to pay points as it will save us money).
     
  32. ethat001

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    What's the "catch" or disadvantage of a doctor loan? I'm buying a ~$250-300k 2br condo soon in Atlanta. My wife and I have good credit (735, 790), and she will be an attending next year. I have enough for a 5% down, and expect to have enough to cover the 20% by next year. So it seems like I could do the 80/20, but the doctor loan still seems better.

    Here's what I've been offered by Suntrust (2 weeks ago):

    1) Doctor loan: 6.0% interest rate, 7 year ARM, 0.75% origination fee (~$5200 total closing costs), no points ==> 0% down

    2) 80/15/5: 6.0%/8.125% 30 year fixed, 0.75% origination fee (~$5800 total closing costs), no points ==> 5% down

    Is there a catch here I'm missing with the doctor loan?

    Also - the 0.75% origination fees seem unnecessary - have other people been quoted these? I'm checking with BoA right now..
     
  33. Sol Rosenberg

    Sol Rosenberg Long Live the New Flesh!
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    The catch is that you are paying enormous closing costs for a bad loan (7/1 ARM.) It used to be that lenders would pay some/all of your closing costs if you took a bad loan like an ARM, but now they add closing costs, call it a "Doctor's loan" and pawn it off on newly minted MDs :) Also, when you come up with the 20% you'd have to refinance if you want to lower your payment which would cost you. With the 80/15/5, you just payoff the 2nd lein and it goes away.

    But, you are not really making a good comparison, because that 80/15/5 quote just plain sucks. Closed on a house last week with an 80/15/5 with 6.125%/7.625% and approx. $2-2.5k TOTAL (including title insurance and recording fees, etc -- not just lender's fees.) Didn't pay any points (you are paying 3/4 point.) I got caught in a little bit of a bubble when I locked 3-4 weeks ago, and could probably get 6% or better if I tried again today, since rates have come down about 1/8 a point. My credit is essentially the same as yours.

    So, if that is truly the best Doctor's vs. 80/15/5 conventional that you can find, then yeah, the Doctor's doesn't seem like such a bad deal (besides the ARM vs. 30-year fixed, though I'll bet the 2nd lein is a 30/payoff in 15.) But I think you can find a better 80/15/5 deal.

    To answer your last question: I wouldn't pay points unless I was putting at least 20% down. To compare quotes between lenders, you must include points. I would start asking for rates without points, if I were you.
     
  34. sonso

    sonso residency resident
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    Anybody familiar with or have any experience with physician lender (link above)?

    Input?

    This is not an ad, I posted the link for easy reference. Hopefully I haven't broken any rules
     
  35. mshheaddoc

    mshheaddoc Howdy
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    Actually rates haven't gone down they've gone up about 1/8 or more in the past month (I know I just locked and got hit with the increase :( ) and expecting to go up again from what I've heard.

    I agree that the 80/15 stinks, and for the arm the rate isn't bad but for the fees, I guess with the larger loan amt its not all that bad. I'm looking at a 7/1 arm with paying no ponts at 6.375 but house is alot cheaper so closing costs weren't as high as yours. Also no origination fees. Watch out what other "fees" they add inthere. Many of them have origination fees (which to me doesn't mean "no points") AND underwriting fees which is ridiculous. Plus they tack on TONS of other fees. Which doctors loan did to us hence why I skipped out on that deal. Is your wife working? Can you qualify conventionally? Some products will allow you not to worry about student loans ... just an idea if that is a worry.

    As for physician lender posted above - I have seen that name thrown around in the sticky mortgage thread, I forget why we didn't use them I don't know if credit was our issue or not but financing 103% is just a bad idea in this market and would be VERY location dependant for me. You shouldn't need to do that. If you can't come up with closing costs in my opinion, you shouldn't be buying a house.
     
  36. ethat001

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    Just an update.. For those interested, the "relocation department" of the Bank of America actually has an agreement with Emory to drop the 1% origination fee. So I'm going to go with them -- they're offering a 6.0% 7/1 ARM doctor loan without points or origination fees and total lender fees = $611 (not including generic settlement fees & escrow). I'm still waiting for the final paperwork and I'll update the thread if this does not turn out to be true.

    I agree ARMs can be dangerous but given a 3-5 year fellowship and a strong desire to move back to family afterwards, there is NO chance I'll be staying after 7 years.

    Thanks for all the advice and hope this helps!
     
  37. Sol Rosenberg

    Sol Rosenberg Long Live the New Flesh!
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    If there are no other hidden gimmicks (interest only, etc) it looks to me that, without those origination points, etc) you found yourself a good deal. Since I've never found something that good directly from a bank, I'm still skeptical, but assuming all is well, congratulations on a good deal.
     
  38. chickenscratch

    chickenscratch really, reallly cool
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    ARMs are usually a great deal for residents. you know you'll likely be moving, and it gets you a better rate. just watch the hidden fees or it will quickly become a not great or even bad deal. The Doctor Loans will hit you with fees in the GFE so look there.
     
  39. radonc

    radonc Senior Member
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    arms are a good deal for residents if you are absolutely sure you can sell your place after you graduate... if you do a 3-1 or 5-1 arm, and cannot sell your place immediately when you graduate, then you may get stuck with a rate that can balloon to 8-12 percent, depending on the mortgate you sign.

    if you live in a big city, where there is a lot of turnover or demand, then go with an arm...but if you are moving to a small-rural-lessurban area (ohio, nm, idaho, indiana, etc), then you may want to consider going with a traditional mortgage.
     
  40. jean veljean

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    Hey everyone,

    Wanted to know what was the max was for taking a physician loan mortgage.
    I wanted to by a house at $350,000 and wanted to know if the banks would not accept that amount.

    Thanks
     
  41. doctorloans

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    I know Bank of America can do up to 1 million...
     
  42. DoctorWannaBe

    DoctorWannaBe Senior Member
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    How can BOA do 1 million when first year residents start out making in the low 40s and have many thousands of dollars in student loans? Do they not base it on our current income?
     
  43. doctorloans

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    In general, the max loan amount is up to 1 million dollars, but it is definitely based on income/future income. In the case of a first year resident with 40k, he/she definitely would NOT qualify for a 1 million dollar mortgage.

    However, BOA loans don't take student loans into consideration.
     
  44. randomedstudent

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    Physician mortgages are not just for residents - companies that do these will do them for any physician - ie. residents, fellows, recent fellowship grads looking to buy a really expensive house that their new salary can support but for which they don't have enough for a downpayment, etc. etc.

    As for how much a resident can qualify for - we just went through this and got quotes from several banks. So far the highest was $225,000 based on only one salary (we will have two, but wanted to qualify just on my husband's since I don't yet have a contract). One company thought they MIGHT be able to go as high as $240k but I haven't heard back to know if they were able to swing that. Note that we have zero debt other than deferred student loans. So, I find it highly unlikely that you can qualify for $300k + on one resident salary. Especially with the current market situation - lenders are being much more careful on these 100% mortgages, and in many areas they are no longer available at all except for physicians and a few other special programs.
     
  45. jean veljean

    2+ Year Member

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    This one bank i am applying to is not only asking for my contract but also my bank statements, social security number, and my"transcripts" from school. Is asking for transcripts necessary?
     
  46. njmedresident

    2+ Year Member

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    Hi -

    I'm starting a fellowship in an expensive but slightly dangerous area; will need a car and a one-bedroom rental...currently have about $5,000 in credit card debt. I'm looking hard at my budget for the next three years..I'm thinking that I need about $700-$900 extra per month (above what I am getting in salary) in order to cover my apartment, car, etc. I am very spoiled in that I have very little debt from med school. Also have great credit.

    I think it makes no sense to keep adding to credit card debt. I am wondering if I should take out a $10,00 or $15,000 personal "physician loan" from Suntrust or one of those companies. Has anyone had any experience with these companies? (for cash loans not for mortgages).

    I actually went to my regular bank (wearing my white coat, ha ha) and asked them if I qualified for a personal loan. Based on my credit rating (and I guess white coat?) they offered me around $7500 with an interest of 10% payable over 5 years or so. My credit cards have about a similar rate, so I'm not sure if this is better.

    I have read with SunTrust you can pay minimal payments while in fellowship and there's no penalty for pre-paying. Seems more logical to actually take out a small loan than be in denial about what I actually need to live on and keep using credit cards...

    any thoughts?
     
  47. southerndoc

    southerndoc life is good
    Physician Moderator Emeritus Lifetime Donor Classifieds Approved 10+ Year Member

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    Isn't the interest on the SunTrust loan in the 13-15% range?
     
  48. doctorloans

    7+ Year Member

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    Hmm, I would think not! Maybe for some banks, yes... but there are definitely other banks out there that do NOT ask for transcripts. What bank is it?
     
  49. doctorloans

    7+ Year Member

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    Is it absolutely necessary? I mean, can you live somewhere else and commute to the hospital?

    I just always always try to find a way rather than borrowing more money. It doesn't really matter if it's a credit card loan or personal loan. It still gets you further down in the hole!

    Would you mind posting your expenses? Just trying to figure out why you would need 600-700 more per month to live on.

    Good luck!
     
  50. RockfordWF

    RockfordWF Membership Revoked
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    If you do a doctor loan, they do not consider your debt. It is based off of your income only. I was approved for $200,000. However, I do not want a payment that high during residency, so my house will be closer to $150,000.

    If you are beyond residency, there is really no limit.
     
  51. randomedstudent

    7+ Year Member

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    Uh, I think they most definitely consider your debt, at least every lender I spoke with did, and that was about 7 different ones. Perhaps what you mean is they don't count deferred student loans against you which is generally true, but if you have other debt such as car loans, personal loans, credit card debt you can be sure they are counting that - how could they not? If they ran a credit check then they are considering your debt, that's why they run it. And if they didn't run a credit check then most likely you aren't truely pre-approved but rather pre-qualified, big difference.
     

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