Home equity loan OR Physician Loan?

[DrDudeMD]

Hey all,

Trying to buy my first home in the near future. I don't have much liquid asset right now. Now that I'm an attending, money should accumulate faster than being on a resident salary.

I can certainly be patient and save enough for a down payment + expenses for another year or so. However, I would want to entertain my other options as well.

I've looked into Physician loans. They certainly have their appeals. What about home equity loans? My parents are willing to put their house up (mortgage is paid off etc). The value of their home is well above what I plan on getting. For those wondering, my budget is to not exceed 2.5x my base-pretax salary on my purchase.

Would it be cheaper to ask my parents for help and use their home equity loan? If that is the situation, who would be the owners of the new house? What kind of tax implications would this have for them? If they are putting their home up, would that count as a "gift" for me?

Thanks!

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[Redtwogreen]

My general feelings about home equity loans is that they should be used for emergencies only, and only in very desperate circumstances. I would definitely go the physicians loan, fha, or conventional loan route a million times over a home equity loan, especially from a family member.

We used a physician's loan on a super cheap house. Our mortgage+taxes+insurance are to the dollar exactly what we were paying in rent before, plus we didn't have a down payment. Not bad! But just know that some people frown upon physicians loans generally. Do what works for you I say.