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Home Loans

Discussion in 'Military Medicine' started by ttusom04, Feb 17, 2004.

  1. ttusom04

    ttusom04 Member 7+ Year Member

    Aug 20, 2003
    There is a home loan thread on the general issue forum. I thought what I have found may be of some use to military docs, active or deferred.
    If you are civilian deferred, like myself, and will not be able to take advantage of the VA loan anytime soon, I have done some pretty heavy digging into home mortgage programs for doctors that require as little down as possible, do not require MIP (mortgage insurance premium), and don't consider deferred student loans. There are two options depending on your credit score and student loan status.

    1) Bank of America offers a physician first loan that requires nothing down, does not require MIP, and does not take student loans into consideration. The downside is that you must have a 720 FICO score, which is impossible for anyone with a lot of student loan debt (like myself).

    2) USAA is willing to not take into consideration student loans as debt as long as you can prove they are deferred for at least 2 years. They are the only bank I found that does this for a conventional (5% down) loan. No MIP and no student loan consideration, but you must come up with 5% down. My payment would be about $650.00 on a $100,000 house.

    There are downsides to each. I don't want to pay MIP and my credit score is only 650. FHA requires only 3% down but you must put an MIP down payment and a monthly premium fee. which ends up being about $1300 down (rolled into mortgage) and about $50.00 month into payment on a $100,000 home. The VA loan itself is not without up front fees. I was told the VA charges 2% that they will roll into the principal, but you put nothing down, have no MIP, but you do have closing costs.

    If you have any specific questions I will be happy to answer
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  3. Homunculus

    Homunculus SDN Caveman Administrator Moderator Physician 10+ Year Member

    Jul 24, 2000
    my wife and i will be moving to the DC area to start my residency and we've started the whole home loan thing as well. the bank of america program is really nice, except our middle score (they toss the high and low of the three) was a 709. 11 friggin points short. so we've closed a few credit cards, paid down some others. and removed an erroneous collection agency report and are hoping we'll get bumped up enough to make the 720 cut off.

    we're looking at a 5/1 ARM-- the physician lender program at bank of america i think gave us a quote of 4.6-ish percent. not too shabby.

    a classmate of mine said he got a similar no money down no PMI deal from sun trust, though i haven't looked into it yet to see if he was telling me the truth, lol.

    i tried working with USAA and was disappointed. which kinda surprised me, as we've been very very pleased with their car insurance and renters insurance. i've never dealt with nicer people when it comes to car insurance claims. anyway, the loan guy we talked to on the phone wasn't much help, and the loan they did finally run through for us was average at best.

    do as of right now we're waiting for our credit score to get updated and see whether we need to go loan shopping a bit more.
  4. ttusom04

    ttusom04 Member 7+ Year Member

    Aug 20, 2003
    I had a really helpful loan officer at USAA that spent upwards of 1 hour with me trying to find out which loan was the best for me. Gave me many different quotes with different ARM's and such. I, like you, have really enjoyed most everyone I have delt with at USAA, but I had a really positive experience and will probably end up getting my mortgage with them. They offered me a 5 year ARM at 4.0% with .0125 points ($90.00), but with 1 point I could have gotten 3.25% ARM for five years.

    I too also heard about suntrust and called them. They require a 720 for nothing down, but only a 620 for 10% down. Either way I was not interested.

    Maybe you just talked to someone that did not know about our situation. The woman I spoke with had just recently done a loan for a girl starting residency. So maybe she knew more about it than the person you spoke with.
  5. Spang

    Spang SDN Angel 10+ Year Member

    I did nearly 13 years active duty (Navy) before starting med school in 2002. We've owned 3 properties, refinanced numerous times and currently own 2 houses (one is a rental property). All that said I would never deal with USAA for a mortgage again.

    First of all it's not USAA who services your mortgage it's PHH. Their customer service is not the same as USAA's and USAA's interest in your loan drops dramatically once all the papers are signed at your mortgage check (ie, interest payments) are coming in every month. Our problems started with the processing of our first payment and went down hill from there. We paid with the first payment coupon that comes with your closing docs, they cashed our check but never credited to our loan, a transaction they never could explain. Numerous, numerous phone calls just to get escrow payments to insurers made, not on time mind you, even at all. We've had a lot more luck with local banks or banks with local branches, at least.

    Do as you will, but I will never, never take another mortgage through USAA
  6. edmadison

    edmadison 1K Member 10+ Year Member

    Feb 27, 2001
    Lactate > 15
    I won't go into too many details, but I had great trouble with USAA/PHH as well. Essentially, they didn't do my paperwork. They assigned me to a long counselor who was on vaction. I was unable to get anything but voice mail when I called. I left messages on the counselor's voice mail, her managers voice mail and the division vice president's as well -- never got a call back. They didn't give me a comittment letter on the date agreed in the contract -- essentially this meant that I was in breach and the seller could have walked away at any time.

    I had to call USAA customer service an threaten to pull all my insurance and financial accounts (not an insignificant amount of money) to get a fire lit under them. This was a week of hell.


  7. ttusom04

    ttusom04 Member 7+ Year Member

    Aug 20, 2003
    I will learn from your mistakes and try to avoid USAA if possible. Any other programs with no MIP and willing to defer student loans with a FICO of 650. They were the only one I could find.
  8. GMO_52

    GMO_52 Senior Member 10+ Year Member

    Oct 9, 2003
    I had good luck with Coldwell Banker Mortgage. They are privately held and can tell you where you stand very quickly (like during that phone call).

    JHAMMOND Junior Member 7+ Year Member

    Aug 11, 2002
    I am starting a military residency this June/July, and I've been trying to start the mortgage process through multiple banks, but I have been told repeatedly that since I haven't actually started working yet they can't approve me for a loan (even though I have great credit). I was told I would have to wait until at least after I graduated. Is this different from what others have been told?
  10. Homunculus

    Homunculus SDN Caveman Administrator Moderator Physician 10+ Year Member

    Jul 24, 2000
    you should be able to use your residency contract that you signed showing that you will be a resident, the reporting date, and the rank you will be promoted to. at least that is what our loan officer and bank of america told us.
  11. DiveMD

    DiveMD Giggity giggity!!! Physician 7+ Year Member

    Jul 10, 2006
    VA vs. conventional loan: Any insights?
  12. Gastrapathy

    Gastrapathy no longer apathetic Physician Lifetime Donor Classifieds Approved 10+ Year Member

    Feb 27, 2007

    I would recommend against a VA loan because of the origination/funding fees (or whatever they call it now). With your income, if you shop around, you can definitely do better. I've generally managed to do a little better by shopping around, but if you want an easy experience with a bank that understands how your income works, I'd recommend USAA.
  13. The White Coat Investor

    The White Coat Investor AKA ActiveDutyMD Physician Partner Organization 10+ Year Member

    Nov 18, 2002
    SDN Partner
    I went with USAA. Fees were low, up-front, and rates were competitive. Is it possible if I worked two or three mortgage brokers I might have gotten an 8th of a point off...possibly, but I got a good rate and continue to get great service. Even though USAA sold off the loan (as nearly every originator does), they continue to provide flawless service for it (probably through PHH, but like I said, I've only had to call them once and that was to increase the amount of my automatic mortgage payments).

    I also liked that I didn't have to provide any significant documentation to them as they knew my rank and time in service (and thus my salary.)
  14. NavyFP

    NavyFP Senior Member 10+ Year Member

    May 18, 2006
    Manning a Cubicle
    Concur with above. USAA is a fabulous organization. Have never had a hassle working with them. One phone call and it was a done deal.
  15. DiveMD

    DiveMD Giggity giggity!!! Physician 7+ Year Member

    Jul 10, 2006
    Thank you guys!

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