Physician Loans

[SunTrustDrLoan]

...

---

Members don't see this ad.

 

[drguy22]

Don't want to get in trouble here as I am not "spamming" but I am with SunTrust Mortgage and we still offer our Physician Mortgage program (bank has no plans of killing it, actually said they wanted to do more of them). I was with BofA for 6 years working with Doctors until they killed their program on 4-1-09. I then made the move to SunTrust as it had the next best product on the market in terms of rates and fees. Should anyone have questions I would love to answer them or just give my opinion. Please feel free to send me a PM, as I don’t want to brake any of the forum rules. Thanks!

you know..i did a mortgage with suntrust bank ( the doctor loan) but it seems that everyone working with is not very well informed. The people that i worked with made a HUGE fuss about my med school loans and wanted me to show that they would be deferred for at least the length of my residency ( something i cant show) I had to do soo much work to get documentation that my loans were in fact under federal mandatory deferrment, etc etc. This whole process took about 2-3 weeks.

If the bank wants to do more loans, they should treat the future physicians better and not take 2++ months in getting a mortgage approved ( I had credit scores 770++, no real debt besides med school, no other credit issues ) and it still took 2 months!!!! They also screwed up a whole lot once the mortgage was approved!! like forgeting to order the final home inspection 2 days before closing!!!

just some advice to improve your banks customer service. there is a whole lot more but enough of my rant. you guys also need to offer better products... you all gave me a 5/1 ARM, i would have preferred a 30 yr fixed.

 

[SunTrustDrLoan]

...

 

[ethat001]

I did my loan with SunTrust two years ago, and had a great experience. I know a great contact here in Atlanta, she was fantastic, professional and usually responds within minutes to emails. I won't post her info, but you can msg me if interested. I have no affiliation with any banks.

I would say that I found a better deal at the time at BoA (without $2k origination fees), and SunTrust matched it. So definitely shop around and compare.

I plan to finish fellowship and buy a new house in the next 1-2 years, and I'm expecting to put down at least 5%, and saving now. Getting a 0% loan is great, but if they give you crazy high rates like 7.5%, you may want to really work the numbers to see whether it is better to rent & save up a downpayment. There's probably no rush to buy, since I'm hoping the prices will stay down for 1-2 years - there's a lot of inventory on the market that isn't just going to fly off the "shelves" in 1-2 years. But - who knows.

I would definitely say it would be foolish not to get a fixed rate mortgage when the rates at one of the lowest in recent history!! I locked into student loans at the lowest rates in history 6 years ago at an interest rate of 2.75 that is now 1.75 after 24 on-time payments. 1.75% for 30 years is LESS THAN INFLATION. I'll keep those loans for life. Now is a similar time for mortgage payments, don't waste it with an ARM.

 

[tkim]

I did my loan with SunTrust two years ago, and had a great experience. I know a great contact here in Atlanta, she was fantastic, professional and usually responds within minutes to emails. I won't post her info, but you can msg me if interested.

If it's the same person I dealt with - "EG", then I agree, and I've already posted her info in another thread. I believe in word of mouth.

 

[AnonDoc77]

I would avoid SunTrust Mortgage it at all possible. They are deceptive and make promises they cannot keep. They advertise heavily to the med student/resident/physician population and then when you bite, they drop the ball. They do a terrible job in returning your phone calls. Awful customer service. I have a 750+ credit score with more than 10% available for a down payment. I provided documentation every step of the way (3 months prior to closing), and they delayed our closing for so long due to papers being shuffled around, misdirected, and people not doing their job. The loan officer at SunTrust as well as the processor never had a clue as to what was going on. The regional manager even got involved and it didn't change a thing. Eventually we had no choice and went with a different lender and was closed from start to finish in 10 days. 10 DAYS another bank did what SunTrust couldn't do in 3 MONTHS that they had all my documentation.

The best advice is that you should contact the local banks in the area you will be living for a physician loan program. Contact the Residency GME office, or the Financial Office of the program you will be in for referrals. Ask other physicians/residents/med students who they have had a good experience with. Dealing with a local banker will save you time and hassle because local bankers actually care about their reputation. SunTrust is such a big bank is the southeast that they could care less if they screw you over. The underwriter, processor and loan officers will all be in different states, and they will not give a darn if they delay your closing for months.

Take my word for it, and AVOID SUNTRUST BANK!

 

[SunTrustDrLoan]

...

 

[SunTrustDrLoan]

...

 

[Boopieness]

VA loan

For those in reserves or prior qualifying military service.
O% down, no pmi, limited closing costs, additional funding fee (waived if va compensable disability). APR are supposedly better than prevailing rates because have a much lower default rate.

I was interested in BOA Doctor loan in residency but since the market went down, unemployment increased & foreclosures skyrocketed the doctor loans with their horrendous rates now require down payment.

Luckily, I'm looking at VA loans.

 

[jacovsamuel]

Yes I agree with your information Bank of America: may be possible in certain areas but I think that they are moving more toward 5% down. I think the loan limits are stricter.

 

[JerseyDO]

Has anyone actually used Physician Relocation Specialists? I checked with a few other places including Physician Loans, but unfortunately they don't do loans in NJ.

I've seen their names come up a few times here, but no one has claimed to have worked with them on a loan.

 

[italianeyes2]

You would be absolutely stupid to do an ARM in this market. With fixed interest mortgages at their lowest levels in years, and with the uncertainty of the real estate market, residents would be absolutely stupid to get an ARM.

Here's why:

Yes, they will finish residency in 3-4 years and the ARM is good for 5. However, nobody knows what the interest rates will be like in 5 years. They will likely be much, much higher. The real estate market is unlikely to return to the pre-recession days. Meaning it's going to be a lot harder to sell a house even when the recession goes away. The reason is banks are so hesitant to loan money, and people have damaged their credit scores by not keeping up with payments in a timely fashion.

The resident won't be able to sell the house after finishing residency for 6 months to several years (this is occurring right now with a few residents I trained with). This means it will be harder to buy another house where the physician plans to practice. The interest rate may jump to 11% after the ARM period finishes, which will make payments extremely expensive.

Yes, an ARM is a great idea for Compass because Compass makes money on it, but it's a bad idea for those financing. ARM's wouldn't be offered if banks didn't make loads of money off them.

Not sure if I understand the reasoning here. So you're planning on doing a 4 year residency and do a 5/1 ARM at 3.7% instead of a 30 yr fixed at 4.7%. You would have a year after residency is over to sell your house and not have the interest rate skyrocket. As long as you purchase your home in a reasonably desirable area, it shouldn't be too difficult to sell in 4 years. I'm not that financially savvy, so is there something I am missing here?

ETA: Also by rates "skyrocketing", the caps on the ARMs seem to be 1-2% per year with a lifetime cap of 5%. So you're looking at a rate after 5 years that is comparable to your rate you were paying for 5 years on your 30 yr fixed loan.

 

[southerndoc]

No, it probably won't be hard to sell your house in 4 years. You aren't going to start marketing your house during internship. You'll start marketing it your last year of residency. You may sell within a year and not have your interest skyrocket, but there are plenty of people who have had houses on the market for 2-3 years without selling.

If you aren't going to be in a house for more than 5 years, then it doesn't make sense to buy. Contrary to popular belief, houses are not investments. They are a lifestyle choice. The annualized return for housing is only 2%, which is just under inflation.

 

[2tall]

Anybody get a 0% down fixed in the past couple of months? What's it looking like out there now?

 

[italianeyes2]

No, it probably won't be hard to sell your house in 4 years. You aren't going to start marketing your house during internship. You'll start marketing it your last year of residency. You may sell within a year and not have your interest skyrocket, but there are plenty of people who have had houses on the market for 2-3 years without selling.

If you aren't going to be in a house for more than 5 years, then it doesn't make sense to buy. Contrary to popular belief, houses are not investments. They are a lifestyle choice. The annualized return for housing is only 2%, which is just under inflation.

I see. Not sure I agree with your second paragraph. Especially if I buy an affordable house, then mortgage+escrow would be only 100-200 more than my current rent. After some number crunching, I found that if I sell for the same price I bought the house, I would come out ahead by $10-15000 over renting if I buy. Add in the 8k in tax credit from the gov't and it seems like a good investment. Also, my wife and I would enjoy a house.

 

[southerndoc]

I see. Not sure I agree with your second paragraph. Especially if I buy an affordable house, then mortgage+escrow would be only 100-200 more than my current rent. After some number crunching, I found that if I sell for the same price I bought the house, I would come out ahead by $10-15000 over renting if I buy. Add in the 8k in tax credit from the gov't and it seems like a good investment. Also, my wife and I would enjoy a house.

If you would enjoy a house, then it's a lifestyle choice.

By the time you add maintenance, increased heating costs (from more square footage than an apartment), lawn care, homeowner's insurance, etc., you really aren't saving much. Homeownership is a huge investment, both in terms of money and time.

 

[italianeyes2]

If you would enjoy a house, then it's a lifestyle choice.

By the time you add maintenance, increased heating costs (from more square footage than an apartment), lawn care, homeowner's insurance, etc., you really aren't saving much. Homeownership is a huge investment, both in terms of money and time.

I agree about maintenance (homeowners insurance is included in escrow however and included in my estimates). Still it would not equal the 10-20k difference between renting and owning that I estimate. Also, I guess why I view home ownership as more of an investment is that rent is a sunk cost with no opportunity for returns while with buying a home you're putting money into a property that could potentially provide a return on your investment. But yes, it is definitely requires a commitment of both money and time and requires someone willing to accept the responsibilities and risks.

 

[TrumpetDoc]

So, I am coming up on graduation of residency in July. We will be in Las Vegas. Now, inital thoughts were to rent for a year and watch, but the numbers for the vegas market look to be going up (sales went up with modest decrease in prices). The next step may stable then increase in prices. My ultimate desire is to get into the market at the low point (around now) There are some FANTASTIC deals on homes now and a LOT of short sales and foreclosures.
We want to go into our big, long term house, (large family).
I would love to get in on an incredible deal on a resale or even a new home.

I have just started to investigate and in LV there are precious few options.
A lot of Companies wanting 5% down and such.
Now, we could wait a while an amass a down payment as an attending but what i fear VERY much is my Student loan debt. The physician loan programs advertise that they will look over this. (>285K).

In reality, even in payback-not a problem as attending, but will conventional lenders or anyone be able to overlook this when in repayment??? Another reason I am compelled to begin looking now to buy.

Any thoughts?

 

[Maos]

I'm currently a 4th year student and will begin my residency this summer. My wife has been working as an engineer throughout my time in med school and has considerable savings in her name and zero debt, while all I have to my name is a lot of student loans. We would like to buy a house, once we learn the outcome of this year's match. I expect that my wife should be able to qualify for a traditional mortgage in her name only, using her assets, income, & credit rating. However, we've been wondering if there is any reason why it might be financially beneficial for us to check out physician loans. If we were to apply for a mortgage together and combine my residency salary (she earns more than I will as a resident) with hers, how would our mortgage be affected? Are we likely to receive a better interest rate? Qualify for a larger mortgage?

In short, what are the benefits of a physician loan, besides a low downpayment? If we can qualify a traditional mortgage instead, would this be a more financially sound decision?

 

[Mtloomis]

Moas
There are a few Benefits to Physician Loans.
1. As you stated 0-3% down
2. They will ignore any student loans in forbearance or deferment for 12 months or more (FHA does this as well)
3. They will use the offer from the hospital for income. Other loans demand that you show some income history. (this may not seem like a big deal. But when you can't close on your house until 2 months after you start work it will seem like an issue then). Most Physician loan companies will close within 60 days prior to your start date.

Downsides are that they are almost always ARMs and the rates are higher. If your wife can get preapproved you may find that is a better way to go.

As far as how much money the banks will lend you, they will almost always lend you more than you can really afford so the limit shouldn't be a big deal.

I'm in Real estate in Cleveland and my wife is a resident. I know where you're coming from and anyone can e-mail me with questions I would love to answer any that I can.

 

[Mtloomis]

but will conventional lenders or anyone be able to overlook this when in repayment??? Another reason I am compelled to begin looking now to buy.

Any thoughts?

Lenders will over look loans that are still in Forbearance or Deferment for 12 months. That is 12 months from closing to first payment. If you are inside that window already it may not matter if you wait or not, because they'll have to count it on your income to debt ratio.

This applies to both Physician and FHA loans and for FHA I know it's a Federal Guideline so there isn't a lot of flexibility.

 

[dsherida]

Can anyone comment on the benefit of a physician loan vs FHA mortgage? Thanks

 

[dragonfly99]

FHA will not do 0% down.
In general you'll get a better interest deal with FHA (similar to a conventional mortgage interest rate) while the Doctor Loans will jack you with a higher interest rate.
FHA will not be usable for certain properties, such as many condos. If you want to buy with an FHA loan be sure that the property is on the list of FHA Approved properties or you will NOT be able to use the loan to buy it. Some real estate agents are not knowledgable about this.

 

[Mtloomis]

Can anyone comment on the benefit of a physician loan vs FHA mortgage? Thanks

Another MAJOR factor (and this was brought up in another thread) FHA requires pay stubs and will not use a contract as proof of income. This means you cannot buy before you start. And this year that means you may miss the April 30th deadline for having a contract on a house and being able to close by July 1st.

 

[fubeca]

Would having a co-signer change this? I'd like to purchase a home regardless, but I'd really hate to miss out on $8K! Is there any other loop hole to keep us from having to move twice?

 

[Mtloomis]

Would having a co-signer change this? I'd like to purchase a home regardless, but I'd really hate to miss out on $8K! Is there any other loop hole to keep us from having to move twice?

I just saw this. I don't know, but if you send me a pm with more info I can call around to some lenders I work with and see if I can find an answer.

 

[Doctor J]

Another MAJOR factor (and this was brought up in another thread) FHA requires pay stubs and will not use a contract as proof of income. This means you cannot buy before you start. And this year that means you may miss the April 30th deadline for having a contract on a house and being able to close by July 1st.

If my info is correct, FHA is a viable option with a contract and a paystub provided up to 30 days after closing. You could theoretically be under contract by April 30 and close by June 30 as long as your first paycheck is available before July 30. This is an (albeit tight and possibly problematic) option for most starting residency this year.

 

[dsherida]

Just wanted to throw my research out there for people. We looked into a physician loan through Compass bank. Their rate on a 30yr fixed was 6.75% and decreased to 6.25% if you open a checking acct with them and have your payments auto deducted each month. However, they require you to put down 5% in certain "declining" markets.

I think the best option you can do is an FHA loan. You do need 3.5% down and there is PMI, but the rates are great right now ~5.1%. Even with the monthly PMI, the monthly payment would be about ~$100 cheaper because the rate is so much better. Only thing is there is an upfront PMI premium for FHA loans of 2.25%, but I believe you can just add that to the loan and not out of pocket. In the long term this loan makes much more sense than the physician loans I think.

 

[Mtloomis]

If my info is correct, FHA is a viable option with a contract and a paystub provided up to 30 days after closing. You could theoretically be under contract by April 30 and close by June 30 as long as your first paycheck is available before July 30. This is an (albeit tight and possibly problematic) option for most starting residency this year.

I checked with some lenders who do FHA's and I'm not sure this is right. The folks I talked to were convinced that FHA was adamant about seeing some form of income before closing.

They said that for a resident taking an attending job they MAY be willing to use the resident income as proof of income and use the attending salary to set the amount, but even then they weren't confident in that.

I don't have first hand knowledge either way on this issue but when I saw the post I wanted to check with some folks I trusted on the matter. If you have confirmation of this please let me know because it helps a lot of graduates. But from the folks I talked to you need 30 days of income prior to closing.

 

[Doctor J]

I checked with some lenders who do FHA's and I'm not sure this is right. The folks I talked to were convinced that FHA was adamant about seeing some form of income before closing.

They said that for a resident taking an attending job they MAY be willing to use the resident income as proof of income and use the attending salary to set the amount, but even then they weren't confident in that.

I don't have first hand knowledge either way on this issue but when I saw the post I wanted to check with some folks I trusted on the matter. If you have confirmation of this please let me know because it helps a lot of graduates. But from the folks I talked to you need 30 days of income prior to closing.

We are looking to buy. Two independent mortgage brokers informed me that FHA needs a paystub within 30 days after closing, and will do this because you have a contract in hand which specifies your income. This makes closing pretty tight since most residencies will give you your first paycheck 2 weeks after starting, meaning you will have to close in late June.

I have not actually signed anything but since I've gotten the same information from two separate sources (one a bank and the other a mortgage broker working with a large realtor group) I feel it's fairly reliable. I have not read FHA's bylaws, so take this advice for what it's worth.

 

[dragonfly99]

That is what I was told when looking into FHA. They want a paycheck within 30 days of closing. Could be a problem as some programs don't pay you until the end of July.

 

[Mtloomis]

But what happens if you can't get them the check within the 30 day period? Do the just foreclose on the house? I would ask that question if you are going to go that route.

I don't have a horse in the race either way since I'm not a lender. It just seems weird that a lender would accept any loan documentation AFTER they've released the funds.

 

[dsherida]

Anybody have names of mortgage lenders that will accept a contract and then paystub 30 days after closing?

In the NW, I have spoken to Allied Mortgage company who will do this. Would be great to get a list and then compare rates.....

 

[2wdBlazer]

Bringing this back up but I called [link removed] today at [number removed].

I was quoted 4.5% on a 5 yr Arm. Didn't delve into any other costs involved.

Zero down
100% financing
no PMI
move in 60 days prior to starting work

This seems the best ive seen so far and a 5 yr ARM would work for me as we are moving to Toledo, OH for 4 yrs. I really don't want to stay in OH any longer than needed.

Comments? Maybe this will help someone else? I will post again after my next call with the agent as I totally forgot to ask about fees.

 

[2wdBlazer]

Oh and this is not spam, this just happens to be my first post and just needing info for a purchase.

 

[2wdBlazer]

Bringing this back up but I called [link removed] today at [number removed].

I was quoted 4.5% on a 5 yr Arm. Didn't delve into any other costs involved.

Zero down
100% financing
no PMI
move in 60 days prior to starting work

This seems the best ive seen so far and a 5 yr ARM would work for me as we are moving to Toledo, OH for 4 yrs. I really don't want to stay in OH any longer than needed.

Comments? Maybe this will help someone else? I will post again after my next call with the agent as I totally forgot to ask about fees.

I'm confused to why my link was removed? This thread has other links clearly in it. If it's policy I understand. If you think I work for them, I do not. Just baffled.

 

[southerndoc]

I'm confused to why my link was removed? This thread has other links clearly in it. If it's policy I understand. If you think I work for them, I do not. Just baffled.

There are no other links or telephone numbers posted in this thread. You are a new user, and as such, you'll receive much more scrutiny for posting links and telephone numbers than users who have been around for a while. Sorry for removing your link. I gave you the benefit of the doubt and didn't ban you like most new members get when they post links that are even remotely suscpicious.

 

[dsherida]

Spoke to a mortgage company today and apparently FHA loans are much more leniant with closing for physicians because they can document that you were in med school and don't have 2 yrs of previous income. They can close with your contract and need paystubs within 30 days after. If you have 3.5% to put down this is the way to go as the rate I was quoted was 4.75% on a 30yr fixed!!!

 

[FMGP8P]

Hi guys

I'm looking to put an offer on house, hopefully can get a contract before April 30th. I'm having a hard time getting documentation showing that my loans will be eligible for forberance for the next year (they currently are in deferment from Dec 2009 to June 30th). Direct loans was not helpful at all, very antagonistic in fact. They keep on repeating they "have no way of predicting the future" and are unwilling to write a statement describing the type of loan I have and that these types of loans are eligible for forberance when the borrower is in an accredited medical residency.

Anyone have any luck with this?

 

[Bobblehead]

I'm going to throw in an editorial comment that chasing a potential financial albatross of a house during residency all in an effort to get $8000 back on your taxes should be weighed carefully.

 

[dsherida]

I actually haven't begun looking for a house, but in prep got the director of financial aid at my school to write a letter indicating the new law that states the loans are eligible for mandatory forebearance because of residency. Don't know if it will work, but looks official and states the law on the actual letter.

 

[pem8erly]

I basically had to put my loans into forbearance until closing. Had lots of difficulty with this as well. Because some of my loans were still in grace period, they couldn't go into forbearance immediately. One of my lenders was willing to accept my application for forbearance earlier and actually issue a letter stating that once my grace period was up I would be entered into forbearance for a year from that time.

Remember with FHA, there is going to be a PMI simply because it's a higher risk loan.

 

[2wdBlazer]

Bringing this back up but I called [link removed] today at [number removed].

I was quoted 4.5% on a 5 yr Arm. Didn't delve into any other costs involved.

Zero down
100% financing
no PMI
move in 60 days prior to starting work

This seems the best ive seen so far and a 5 yr ARM would work for me as we are moving to Toledo, OH for 4 yrs. I really don't want to stay in OH any longer than needed.

Comments? Maybe this will help someone else? I will post again after my next call with the agent as I totally forgot to ask about fees.

Sorry for posting the link as a new user. I was just excited to share the name of the site I found as it sounded too good to be true. The rate and details I posted seem awesome to me and will get me through the residency period with an affordable rate. The nothing down and not having to pay PMI or actually be working at close time was awesome.

I am the spouse of the doctor and am not sure what my work situation will be like for a couple months so this is just crazy neat. Thanks for not banning me as I would like to use this site for good references. Again I do not work for these people but if it's allowed I'd be happy to share or help fellow people in a PM if they want.

Good luck with the loans and I hope you can make the Tax credit cut off like i'm trying to do! I did find out that closing costs on the loan will be around 3% so i'm not sure if that is good or average but it sounds reasonable to me.

Feel free to chime in.

 

[emeddo]

Hi guys

I'm looking to put an offer on house, hopefully can get a contract before April 30th. I'm having a hard time getting documentation showing that my loans will be eligible for forberance for the next year (they currently are in deferment from Dec 2009 to June 30th). Direct loans was not helpful at all, very antagonistic in fact. They keep on repeating they "have no way of predicting the future" and are unwilling to write a statement describing the type of loan I have and that these types of loans are eligible for forberance when the borrower is in an accredited medical residency.

Anyone have any luck with this?

We were able to get a letter this year that our bank was very happy with from my school's financial aid office that basically stated we were garunteed by federal law the ability to enter forbearance during residency. Talk to them, you will not be the first person going through this process. You are going to have much better luck with local lenders willing to self fund the loan, then the national banks just interested in selling it right off the bat. Call your residency and local realtors and ask who they are using.

 

[Guile]

I'm in the very beginning stages of looking to buy a home in Tampa and am wondering if I can get some advice from others who are in residency and have recently bought a house. First, I am thinking that going with a fixed rate is better seeing how interest rates are probably going to increase somewhat. Second, while a 15 yr fixed will mean higher monthly payments compared to a 30 yr fixed, I figure I can pay off the house within 15 yrs once I start making some real money after residency. Lastly, does anyone have experience with www.physicianloans.com? Thanks.

I have the same question as well. If anyone has had any experience with physicianloans.com (Tower Mortgage) it would be greatly appreciated. Their deal sounds really good but I just don't know about their closing costs, and it would be a huge pain in the butt if closing fell through.

 

[2wdBlazer]

I have the same question as well. If anyone has had any experience with physicianloans.com (Tower Mortgage) it would be greatly appreciated. Their deal sounds really good but I just don't know about their closing costs, and it would be a huge pain in the butt if closing fell through.

I used them in May. Very good experience and everthing they touted was true. Great experience.

 

[Guile]

I used them in May. Very good experience and everthing they touted was true. Great experience.

Thanks for the reply. What were the closing costs like? Do you have your HUD around still? What percent were they of the sales price of the home? Thanks a ton.

 

[bitterswtmocha]

It may be too late for this, but with FHA loans the 3.5% down can be gifted (from a family member, etc.)

 

[samwoods622]

Hi Everybody,
I'm Newbie to this forum site.... I found it very interesting.... Good Information about "Physician Loans". It's become very useful. Thanks for sharing it.

 

[CompassMBO]

It may be too late for this, but with FHA loans the 3.5% down can be gifted (from a family member, etc.)

Funds for physician loans can be gifted as well, or in our case, Seller can pay all of them for you.

With new mortgage insurance requirements on FHA loans that go into effect April 18, FHA monthly payments can be quite expensive. It used to be the best loan, other than VA, available. I used to do a lot of them, but not so many any longer.

Before going FHA, look at all the available options. A physician loan at 6.00% is about the same payment as an FHA loan at 4.875%. Plus, at the higher rate, you get a little more of a tax write-off.