Home loan for residents

[JR]

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Hello everyone,

I am a PGY-1 planning to buy a house or a condo soon. I know that B of A offers "physician only" loans that come with 100% financing and other perks. Anyone else knows any other banks that do the same? Any info is appreciated.

 

[mshheaddoc]

I believe Cendant Mortgage (soon to be PHH) does and countrywide does

 

[GuyLaroche]

I believe Cendant Mortgage (soon to be PHH) does and countrywide does

PHH?

 

[Dr. Banker]

Hello everyone,

I am a PGY-1 planning to buy a house or a condo soon. I know that B of A offers "physician only" loans that come with 100% financing and other perks. Anyone else knows any other banks that do the same? Any info is appreciated.

I am sure there are plenty of other programs out there but when you really compare apples to apples our zero down Physicians loan is one of the best. 100% financing, no PMI, no medical deferred medical loans counted into the housing ratios, and finally here is the key: no bumps to the mortgage rate! Most of the competition out there offering these "medical" mortgages are typically a quarter higher on the rates. I work for B of A in the mortgage dept and I can't get a mortgage as good as this program! If you have any questions or you just want to compare mortgage options let me know.

 

[JR]

Hey Dr. Banker, quick question. I was told that the 3 year ARM with only interest only option is not available on the Physician's Loan through B of A. However, there is a 7 year ARM that's available. If I am planning to sell the property in 3 years, is there any downside to getting the 7 year ARM? I am moving to another state for a 3 year residency and would like to buy a small property while there, but will definately be coming back to my home state in 3 years.

Thanks for your input,

 

[mshheaddoc]

PHH?

yeah they are going back to their roots.

 

[Dr. Banker]

Hey Dr. Banker, quick question. I was told that the 3 year ARM with only interest only option is not available on the Physician's Loan through B of A. However, there is a 7 year ARM that's available. If I am planning to sell the property in 3 years, is there any downside to getting the 7 year ARM? I am moving to another state for a 3 year residency and would like to buy a small property while there, but will definately be coming back to my home state in 3 years.

Thanks for your input,

Actually we offer a 5 year ARM under the zero down Physicians loan that is the most popular. You get a better rate on the 5 year ARM vs the 7 year ARM and since you are not planning on keeping the home long term it may fit you better. We also offer 3 year interest only products but not under the Dr. program. What I have found is most of the time even if you are only staying in the home 3 years the 5/1 Physician loan works out better than the interest only. Of course everyones situation is different.
Another thing to consider is pricing out the closing costs. The home you purchase is a short term investment so tie up as little of your own money as possible. Something to consider.

 

[otopico]

Anyone have experience with home loans in Chicago? It seems like buying a home on a resident salary is almost impossible as the price for even a decently sized condo runs over 300K!!! Any advice would be much appreciated. Also, how much do banks honestly qualify us for?

 

[Dr. Banker]

Depends on how much your pay will be and also if you are married how much your total household income is. If you have money to put down and have good credit you could qualify for $300k on an income of $38-40K. You would be surprised how creative we can get with the financing.

 

[JR]

Depends on how much your pay will be and also if you are married how much your total household income is. If you have money to put down and have good credit you could qualify for $300k on an income of $38-40K. You would be surprised how creative we can get with the financing.

I have no problem qualifying for the amount I need. I just don't know
what is the best option for me in terms of the kind of loan I should
get: ARM vs fixed; interest only vs paying some principle. My goals to
buy a place for a short term investment while I am in residency (3
years); put as little down as possible and have a reasonable monthly.
My credit is good and I can put a little down, but only if I have to.
What type of loan do you think is the best option for me?

Also, I have inquired on Doctor's loan through BofA. Unfortunately,
the interest only option is not available on it, although you can get
ARM.

Another question about your previous post: could you please define "pricing out".

Thanks,

 

[otopico]

Depends on how much your pay will be and also if you are married how much your total household income is. If you have money to put down and have good credit you could qualify for $300k on an income of $38-40K. You would be surprised how creative we can get with the financing.

Well my income is currently about 41K, my wife makes about 25K. My credit score is somewhere in the 620's due to a credit card that went to collection several years back during my college days. Currently working on improving that. My wife has great credit, somewhere in the low 800's as of several months ago when we leased our car. It seems like to qualify for physician's loans you need to have FICO's over 700, does this necessarily have to be my credit score, or do they figure both mine and my wife's into it? We also don't really have a great deal to put down so we are shooting for a physician's loan with 0 down. Are there any alternatives if we don't qualify for physician's loan? Thanks for any advice.

 

[mshheaddoc]

I have no problem qualifying for the amount I need. I just don't know
what is the best option for me in terms of the kind of loan I should
get: ARM vs fixed; interest only vs paying some principle. My goals to
buy a place for a short term investment while I am in residency (3
years); put as little down as possible and have a reasonable monthly.
My credit is good and I can put a little down, but only if I have to.
What type of loan do you think is the best option for me?

Also, I have inquired on Doctor's loan through BofA. Unfortunately,
the interest only option is not available on it, although you can get
ARM.

Another question about your previous post: could you please define "pricing out".

Thanks,

JR - I would talk to a financial advisor about this if you have one because it depends on your financial situation and location where you are buying. Plus what works for you, how long you will reside there etc. Also what type of risk you want to take in the market place. While a mortgage sales rep would explain it to you, then don't know you and your finances and I would not trust them to make the decision for you unless you know the person. 🙂

As for "pricing out" - that means calculating the closing costs. Sometimes they can get pricey.

 

[mshheaddoc]

Well my income is currently about 41K, my wife makes about 25K. My credit score is somewhere in the 620's due to a credit card that went to collection several years back during my college days. Currently working on improving that. My wife has great credit, somewhere in the low 800's as of several months ago when we leased our car. It seems like to qualify for physician's loans you need to have FICO's over 700, does this necessarily have to be my credit score, or do they figure both mine and my wife's into it? We also don't really have a great deal to put down so we are shooting for a physician's loan with 0 down. Are there any alternatives if we don't qualify for physician's loan? Thanks for any advice.

Most companies will figure BOTH credit scores. One alternative would be to go no document loan (no income verified) with just her on the mortgage and you could just sit on title for a few years until you improve your credit and you are making more money. As for 0 down, usually they are more along the lines of full document loans but as long as you qualify with your income that shouldn't be a problem. Usually most programs will take into account you are a physican (student) for work history even if you aren't in a physican program. As long as you have the credit/assets/stable work history you should be able to get a loan, even with a 620. FYI ... most likely the 620 isn't just from the collection but from your other debts outstanding as well.

 

[otopico]

Is there any way to figure out how much my wife and I would be able to qualify for? I know there are calculators available at bankrate.com, etc... but it seems like as physicians, we are under special circumstances in that within several years our incomes will rise dramatically. Does each bank do this differently? Thanks for the advice.

 

[Dr. Banker]

I have no problem qualifying for the amount I need. I just don't know
what is the best option for me in terms of the kind of loan I should
get: ARM vs fixed; interest only vs paying some principle. My goals to
buy a place for a short term investment while I am in residency (3
years); put as little down as possible and have a reasonable monthly.
My credit is good and I can put a little down, but only if I have to.
What type of loan do you think is the best option for me?

Also, I have inquired on Doctor's loan through BofA. Unfortunately,
the interest only option is not available on it, although you can get
ARM.

Another question about your previous post: could you please define "pricing out".



Thanks,

ARM vs Fixed? This comes down to how long you think you will be staying in the home. My rule of thumb is if you are staying in a home for less than 6 years go with a 5 year ARM. The rate is fixed for 5 years so take advantage of the lower rate (usually one percent less than fixed). The amount you save over 5 years adds up.
Interest only vs principal? This is not as easy because there are alot of variables to consider. Is the interest only include PMI? How do the rates vary? How often does the rate change? Downpayment? If the real estate bubble bursts are you upside down in a home? We offer both programs and I would recommend looking at both based on your individual needs and financial goals.
"Pricing out" what that means is having the bank pay your closing costs. For example lets say you can get a 5% rate with $2500 in out of pocket closing costs. Pricing out would be taking a higher rate of 5.375% and having the bank pay your $2500 in closing costs. The advantage is some people don't have $2500 but they can pay the extra $15 per month increase to their mortgage payment. ($2500 upfront vs $15 per month X 36 months= $540) In that example you saved almost $2000 in fees.

As you can see there are all kinds of options to choose from. What I do is listen to your needs and concerns and than present you will the various options. You can then make an informed decision on what works for you.
Hope that helps.

 

[carol ann]

Dr. Banker,

since you work for BofA, I wanted to ask -- do you have to be a banking customer of BofA to do the physicians mortgage, or do you extend it to mortgage only customers.

THX
CA

 

[Dr. Banker]

Dr. Banker,

since you work for BofA, I wanted to ask -- do you have to be a banking customer of BofA to do the physicians mortgage, or do you extend it to mortgage only customers.

THX
CA

Yes this program is only available to physicians/residents that have a Bank of America relationship. Translation: open a free checking account prior to your home closing.

 

[Homunculus]

I attempted to go through B of A for our home loan (we already do our banking with them), but they were very very specific on the credit score required to qualify. They required a 720 (which we didn't have) and were unwilling to bend anything. I think we had something like a 705. Maybe a touch lower. Anyway, we ended up going through Suntrust and got the exact same loan-- no money down, no PMI, student loans not calculated into it, etc etc. They even took my word on my future income (i'm military) by looking at pay charts (no official letters or pay stubs needed). We ended up with a 5 year ARM (we'll be moving in 3 years or so) and were very happy with the service we received. I'd wholeheartedly recommend them again.

--your friendly neighborhood homeowning caveman