That's true also and yeah I would have to pay for the buyer's closing help. You can ask closing cost help, but it's a toss up if there's other offers on the house you want. Just depends on the market I guess but I know DC area and Northern VA, the seller's are calling the shots for the most part since it's a 'seller's market'. The down payment is a huge factor for me esp in the DC area, homes are not cheap. Plus I won't be able to put my student loans on deferment any longer. Any other bank (non doctor loan) will factor my student loan amount in the application and I wouldn't be be able to qualify considering my income and debt ratio.
Contact Janine Lopez (forgot to include her name in post) if you're looking in DC VA or MD area. Her website is pretty inclusive of all lenders program info. She also does Commercial properties like offices if you're looking to lease or buy a medical office for your practice.
Here's her info.. Janine Lopez Email:
[email protected] Cell 202-489-6398
Website doctorloanprogram.com
Will keep updates!
Hey, thanks for the info!! I emailed Janine and got alot of info on the program. Her website helped alot also. I just returned back to the DC area and the real estate market here is really booming. Rents in a decent area here are ridiculously high!! I grew up in the DC area and in the outskirts of the city, and many of my friends have actually purchased homes years back and have gained equity in their homes rather quickly. Many of the run down neighborhoods in DC have changed dramatically and the value of homes have really increased since I left. I'm looking at this from an investment angle because of the market in DC. If I lived anywhere else in the country, I probably would not jump on the opportunity, but since it's DC it only makes sense to buy. I'm kinda kicking myself for not looking into this sooner. Homes in areas where I lived before have almost doubled since I left the area.
The main things that really helps in my situation is similar to yours (Outlook). And that's the zero to low down, no PMI and the student loan DTI consideration.
I also received additional info on the loan...
-Credit score needs to be a minimum between 680-700.
-Rates on average for Doctor Loan are pretty competitive and is not too big of a difference from current rate. Today's rate 4.2%, Two lenders gave me their numbers for my loan..One lender gave me 4.6%, Another lender was 4.7%. Differs per lender but overall competitive.
-No PMI on the Doctor Loan Program (the lender pays this and the reason so, is medical doctors have pretty much very low chances in their homes going to foreclosure etc. due to stability of our occupation). So because of the really low chances of doctors foreclosing or loan not being paid, the insurance is paid by the lender and not the buyer).
Cash I would need for closing:
-I'll need closing costs of about 3-4% of the loan/amount being financed. The realtor stated this is something she asks on the offer for the seller to cover, with the standard asking closing help of 3%. She also stated depending on how many offers you're competing with and how motivated the seller is to sell, will determine if the seller will help in Buyer's closing costs. So in worst case scenario, I should have 3-5% for closing costs to closing date.
-You'll also need some reserve funds for 3 months (typically, it's 3x the monthly mortgage). If you have 401k or retirement funds, you can use this as documentation that you have reserve funds and not necessarily need to have it in cash. I have a 401k of about $10k therefore this will cover my reserve fund.
Comparison to a Non-Doctor loan (Conventional loan):
-Through a conventional loan, If a buyer doesn't have a minimum of 20% down payment, PMI is required. PMI is relieved though once property has gained a minimum of 20% equity or the buyer has paid 20% of the remaining loan amount.
-For example, a $400k sales price of a home with 0% to 5% down, PMI on a FHA is roughly $220/month. Since there is no PMI with a doctor loan, I won't pay this mortgage insurance monthly.
-For my student loans, using a Conventional loan reduces my borrowing power over 120k. With the Doctor Loan Program, they didn't factor in my student loan which qualified me for a $500k+ home. With the conventional loan they factored my student loans which qualified me for a $350k home. $350k home will basically get me a fixer upper in a not so desirable area in DC :/ Plus, I would still need to have $50k+ cash for downpayment if I go with Conventional.
So basically, if the buyer doesn't have the full 20% downpayment cash (ie. 100k on a $500k house) on a home, the lenders sticks me with PMI fees.
In short, The Doctor Loan program is great for folks who don't have or wouldn't have the full 20% downpayment for the home. In DC, because of the prices of homes, for a $400k home, one would need $80k+ in cash saved up, plus closing costs fees of 3-5%, that's well over $100k in cash. With the increasing prices of homes, buying far outweighs renting in the DC area.
Saving isn't easy and with the high rental cost in or around the city, saving up to 100k cash would be very difficult for me and the rising cost of rent and homes to buy doesn't help either. On average it's much easier to spend extra money than saving it for an investment (unless the buyer is very conservative in saving). Condos in decent areas run $380k+, rowhouses and single family are $500k+ (this is being very conservative).
This is just my situation and the market that I am in. I just feel like I've rented for all of these years and kinda wish I had purchased something even a 2br condo. If I had done so, it would've gained equity after all these years.
Good news is that I have about $40k saved up and have been pre approved!!!! I have just about enough for closing, and a small down payment. I came back this weekend to the DC area and was really surprised at how much rents are going for. Rental prices are really up there! Tired of paying someone else's mortgage so it's to start investing myself.
I have an appointment with the realtor coming up.. I'll include anything else I learn about after my appointment! Thanks again for sharing the realtor's info.. She's been really helpful and knows the area and program really well.
It's actually going to snow tonight... 
