PhD/PsyD Lenders who offer “Doctor” mortgages to psychologists

[neurotic_cow]

Hey all,

Is anyone aware of any entities/lenders that offer doctor mortgages to psychologists? From what I’ve seen there are some that offer “medical professional” mortgages but they stipulate having specific degrees or careers (e.g. MD, DO, veterinarian, chiropractor, etc) or a “medical doctorate”. For reference, I have a PsyD and will be considered a new attending at a hospital working exclusively in a “medical” context.

Thanks in advance.

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[WisNeuro]

Big thing will be whether or not you are doing 20% down or not. We looked at a bunch of options, including Dr/physician loans, but with 20% down, we got a far better interest rate with a traditional lender. Also, make sure you get multiple quotes and see if they will better the offers you received from the best rate you've been quoted. Got ours down to 2.75% that way.

 

[Sanman]

Not sure. However, these tend to be worse deals due the increased risk for the lender. I went with a traditional loan and had no problem getting approved for significantly more than the cost of my home.

 

[psych.meout]

Big thing will be whether or not you are doing 20% down or not. We looked at a bunch of options, including Dr/physician loans, but with 20% down, we got a far better interest rate with a traditional lender. Also, make sure you get multiple quotes and see if they will better the offers you received from the best rate you've been quoted. Got ours down to 2.75% that way.

 

[neurotic_cow]

Big thing will be whether or not you are doing 20% down or not. We looked at a bunch of options, including Dr/physician loans, but with 20% down, we got a far better interest rate with a traditional lender. Also, make sure you get multiple quotes and see if they will better the offers you received from the best rate you've been quoted. Got ours down to 2.75% that way.

Yep I’m definitely getting multiple quotes! So far they’ve all been comparable (including for traditional ones). I was primarily looking at the Dr mortgage because I currently can’t afford 20% down, so the 0% down payment with no PMI seemed like a good option. I am a first time home buyer and so I don’t have anything to leverage. Thankfully I have no debt at all but I was looking at it as a way of getting my foot in the door so to speak. Appreciate your insight!

 

[neurotic_cow]

Hey all,

Is anyone aware of any entities/lenders that offer doctor mortgages to psychologists? From what I’ve seen there are some that offer “medical professional” mortgages but they stipulate having specific degrees or careers (e.g. MD, DO, veterinarian, chiropractor, etc) or a “medical doctorate”. For reference, I have a PsyD and will be considered a new attending at a hospital working exclusively in a “medical” context.

Thanks in advance.

I guess I should also ask if anyone has experience with these types of loans and whether you recommend it or not? I’m a total n00b with this stuff and appreciate any advice you have!

 

[WisNeuro]

Yep I’m definitely getting multiple quotes! So far they’ve all been comparable (including for traditional ones). I was primarily looking at the Dr mortgage because I currently can’t afford 20% down, so the 0% down payment with no PMI seemed like a good option. I am a first time home buyer and so I don’t have anything to leverage. Thankfully I have no debt at all but I was looking at it as a way of getting my foot in the door so to speak. Appreciate your insight!

Once you get official quotes, definitely go back to the #2 and #3 quotes and see if they can do better. Even if you can squeeze 5-10% down, you may get a far better rate. Though, you don't want to kill your reserve funds. The first year home ownership costs are usually a good deal more than people think.

 

[PikminOC]

Not sure. However, these tend to be worse deals due the increased risk for the lender. I went with a traditional loan and had no problem getting approved for significantly more than the cost of my home.

Why are they increased risk? They ask for letters regarding how much you will make. It's better for these places as doctors make a lot.

 

[WisNeuro]

Why are they increased risk? They ask for letters regarding how much you will make. It's better for these places as doctors make a lot.

Because these people generally have a very high debt/asset ratio.

 

[medium rare]

Hey all,

Is anyone aware of any entities/lenders that offer doctor mortgages to psychologists? From what I’ve seen there are some that offer “medical professional” mortgages but they stipulate having specific degrees or careers (e.g. MD, DO, veterinarian, chiropractor, etc) or a “medical doctorate”. For reference, I have a PsyD and will be considered a new attending at a hospital working exclusively in a “medical” context.

Thanks in advance.

You can qualify for a doctor mortgage as a psychologist. Definitely do shop around though.

 

[Sanman]

Why are they increased risk? They ask for letters regarding how much you will make. It's better for these places as doctors make a lot.

As mentioned, high debt to asset ratio and no skin in the game. If you get hit by a bus, lose your license, etc., there is nothing stopping you from defaulting because you put nothing down. That is the purpose of the down payment. No money down loans is a big part of the reason for the 2008 housing crisis implosion. People with no money down walked away when asset price decreased.

 

[neurotic_cow]

As mentioned, high debt to asset ratio and no skin in the game. If you get hit by a bus, lose your license, etc., there is nothing stopping you from defaulting because you put nothing down. That is the purpose of the down payment. No money down loans is a big part of the reason for the 2008 housing crisis implosion. People with no money down walked away when asset price decreased.

Thankfully I have no debt, but I can imagine losing my license or job would be a problem for any mortgage regardless of whether it’s a doctor loan or otherwise, right?

 

[WisNeuro]

As mentioned, high debt to asset ratio and no skin in the game. If you get hit by a bus, lose your license, etc., there is nothing stopping you from defaulting because you put nothing down. That is the purpose of the down payment. No money down loans is a big part of the reason for the 2008 housing crisis implosion. People with no money down walked away when asset price decreased.

Yeah, that's part of it, and when the algorithm is looking at risk, it prefers positive assets and potential for income against negative assets and the potential for high income.

 

[Sanman]

Thankfully I have no debt, but I can imagine losing my license or job would be a problem for any mortgage regardless of whether it’s a doctor loan or otherwise, right?

Yes, but if you 1) have more savings then you are less likely to default (as evidenced by saving up a down payment) and 2) If you have 80k in down payment you will lose by defaulting you may choose to pay the mortgage and have the car repossessed. If you have 0 down on the house and equity in the car, you may pay the car note and default on the mortgage. This is especially true in the first five years where a higher percentage of the payment goes to interest compared to principle. You might only have $10k equity in a house the first few years and $20k in a car. Not to mention, you can live in car. You can't drive most houses to work. Remember risk is all about what decisions they think you might make. The more risk, the higher the interest rate. Luckily, doctors tend to be a lower risk bet. High incomes and generally risk averse.

 

[borne_before]

Don't forget the added cost of PMI if you can't do 20% down. It usually equates to around and extra mortgage payment per year. However, we were able to refi and ditch it based on the appreciation of the property.

Also, it's important to know that inflation is your friend over 30 years as the big mortgage now will seem affordable in ten years and then like nothing after twenty. Debt is one way to take advantage of inflation and rates are still historically low, just not as low as they were two years ago.

 

[neurotic_cow]

Don't forget the added cost of PMI if you can't do 20% down. It usually equates to around and extra mortgage payment per year. However, we were able to refi and ditch it based on the appreciation of the property.

Also, it's important to know that inflation is your friend over 30 years as the big mortgage now will seem affordable in ten years and then like nothing after twenty. Debt is one way to take advantage of inflation and rates are still historically low, just not as low as they were two years ago.

The dr mortgages don’t require PMI even with 0% down payment, which is one of the advantages of doing one of those vs traditional. I hate the fact that now that I’m in a position to settle down and buy something the market is insane. But that’s life I guess It could be worse I suppose.