To get a Doctor's mortgage loan for residency or not?

[windog]

So, hoping we match in March, we are planning on buying a house wherever we end up. My husband is the one in med school and we have a 5 month old daughter. The question is, should we use savings and get a traditional home loan at about 3.7% interest or try for a Doctors loan?

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[link2swim06]

Does he have student loans? If so, how much?

Do you plan on staying in the location for at least 5 years?

Do you know the area pretty well?

 

[jakeislove]

Finance section might have more helpful replies.

In this economy; I'd really do a lot of homework on the market before buying a house during residency. I'd only consider buying a house if planning on living in the community long term.

 

[windog]

Zero loans from school. Will be in place for 7 yrs

 

[windog]

And it depends on where he matches as to whether we know the area well

 

[Stevelgar]

As a mortgage banker I would 1st ask you, how much are you looking to spend on a new home ?
If it under $417k I would recommend a normal conventinal loan.
The benefit of our doctors program are, no PMI, we don't count student loan payments against income if they are deferred for 1yr or more.
The rate on the doctor programs is going to be .25%-.50% higher than a normal conventional loan.
You don't mention how much money you want to put down 5,10 15 % ??
Our Professionals Mortgage only requires 10% down. There are some doctor mortgage programs that will require only 5% or even zero down.
A conventional loan will require 5% down payment & PMI.
FHA requires only 3.5% down & the PMI is expensive 1.35% a year & FHA charges a funding fee of 1.75% which is added on top of the amount borrowed.

If you have any more questions feel free to call me. 816-412-4734

 

[windog]

As a mortgage banker I would 1st ask you, how much are you looking to spend on a new home ?
If it under $417k I would recommend a normal conventinal loan.
The benefit of our doctors program are, no PMI, we don't count student loan payments against income if they are deferred for 1yr or more.
The rate on the doctor programs is going to be .25%-.50% higher than a normal conventional loan.
You don't mention how much money you want to put down 5,10 15 % ??
Our Professionals Mortgage only requires 10% down. There are some doctor mortgage programs that will require only 5% or even zero down.
A conventional loan will require 5% down payment & PMI.
FHA requires only 3.5% down & the PMI is expensive 1.35% a year & FHA charges a funding fee of 1.75% which is added on top of the amount borrowed.

If you have any more questions feel free to call me. 816-412-4734

Thanks for the input, I really appreciate it. We would NOT be spending more than $417,000. Our max would be about half that much.

 

[Etorphine]

My friends, anytime someone offers you a special deal "for physicians," run, don't walk, the other way.

 

[Bacchus]

My friends, anytime someone offers you a special deal "for physicians," run, don't walk, the other way.

These loans are well established. You have a tradeoff of a slightly higher interest rate, but often require nothing down and can be guaranteed a rather large amount of money. It's not like some mortgage broker decided to hang up a cardboard sign: "if you're a doctor, come find me, free $$$$$"

 

[IamPsychiatrist]

So, hoping we match in March, we are planning on buying a house wherever we end up. My husband is the one in med school and we have a 5 month old daughter. The question is, should we use savings and get a traditional home loan at about 3.7% interest or try for a Doctors loan?

Medical people usually don't know much about finance.

A "doctor's loan" is just a marketing ploy. It's a normal loan at normal market rates. Sometimes they have a 1/2 point discount off the loans rate (this is on the back end, not the loan rate) but that's it. A great negotiator can usually get 0.5-1.0 point of the loan anyhow - so this idea of a doctor's loan is pretty bogus. I.e. you could call in and get a doctor's loan offer, then call back 5 minutes later and get the same or better deal.

Your interest rate doesn't matter as much as closing costs and the APR. In fact, it became illegal to even quote an interest rate without an APR a handful of years back - because interest rates mean nothing without an APR. And, on top of this - some companies calculate APRs differently.

Best advice, work with 2 competitive lenders, then start having them compete for you. Next best advice, find a real financial adviser who knows what they are talking about.

My friends, anytime someone offers you a special deal "for physicians," run, don't walk, the other way.

Plus or minus. I think they can be legit normal loans or bad ones - who knows, depends on the lender. I would just focus on doing what I said above.

One could work themselves into a big deal of trouble if they just signed up for a loan because it's a loan for doctors - without having a good adviser look it over. It takes time to learn how lending works, and if you don't know already then best to get a good adviser.

These loans are well established. You have a tradeoff of a slightly higher interest rate, but often require nothing down and can be guaranteed a rather large amount of money. It's not like some mortgage broker decided to hang up a cardboard sign: "if you're a doctor, come find me, free $$$$$"

eh, hard to say. "these loans are well established" leads one to think there is a uniform loan. Truth is, it varies by lender and the terms could be drastically different between lenders. Every loans needs to be evaluated case by case, and hopefully they are conventional loans.

As a mortgage banker I would 1st ask you, how much are you looking to spend on a new home ?
If it under $417k I would recommend a normal conventinal loan.
The benefit of our doctors program are, no PMI, we don't count student loan payments against income if they are deferred for 1yr or more.
The rate on the doctor programs is going to be .25%-.50% higher than a normal conventional loan.
You don't mention how much money you want to put down 5,10 15 % ??
Our Professionals Mortgage only requires 10% down. There are some doctor mortgage programs that will require only 5% or even zero down.
A conventional loan will require 5% down payment & PMI.
FHA requires only 3.5% down & the PMI is expensive 1.35% a year & FHA charges a funding fee of 1.75% which is added on top of the amount borrowed.

If you have any more questions feel free to call me. 816-412-4734

417k is conventional only in some states, the conventional sizes changed like 5-6 years ago or something.

PMI doesn't matter again. There are plenty of crappy loans without PMI and good loans with PMI. But yes, overall if you can avoid PMI all the better.

I would avoid mortgage brokers. I would go to a large lender or two, then play each against each other. I know for a fact some borrowers who have saved to the tune of $4,000-6,500 in cash by doing this.

I would avoid calling a dude who just solicited you on the internet. I know the best lenders or reps are already so busy that they aren't looking for business in chat rooms.

 

[IamPsychiatrist]

As a mortgage banker I would 1st ask you, how much are you looking to spend on a new home ?
If it under $417k I would recommend a normal conventinal loan.
The benefit of our doctors program are, no PMI, we don't count student loan payments against income if they are deferred for 1yr or more.
The rate on the doctor programs is going to be .25%-.50% higher than a normal conventional loan.
You don't mention how much money you want to put down 5,10 15 % ??
Our Professionals Mortgage only requires 10% down. There are some doctor mortgage programs that will require only 5% or even zero down.
A conventional loan will require 5% down payment & PMI.
FHA requires only 3.5% down & the PMI is expensive 1.35% a year & FHA charges a funding fee of 1.75% which is added on top of the amount borrowed.

If you have any more questions feel free to call me. 816-412-4734

 

[IamPsychiatrist]

Please no one call a broker from an online chat room!

The great sales reps are working. They don't have time to write long responses like the above. Go to a name lender and compete with 2 at the same time.

I've seen people get slammed by brokers to the tune of 5000-10000 at the closing table when you're out of options. Call two of the biggest banks in America and compete them against each other. This broker guy will tell you his deal is awesome and not to put him against another lender (or he'll pick one be knows has poor pricing and tell you to shop with them).

Don't do it!

 

[Stevelgar]

IamPsychiatrist..... I am not a broker I am a Mortgage Banker. I work for a national depository bank & we have over 162 retail & military bank branches coast to coast. Just wanted to clarify the banker/broker title. You mention the title "sales reps" I strongly believe that a "sales rep" is what you should avoid. Fortunately, I don't sell my rates & fees are what they are there is no haggling for the rate or to waive this fee or that fee. Those days are long gone. A person should want to do their mortgage with an originator that acts as a consultant and attempts to fit that borrower and their situation into the right mortgage for them. I don't compete with big or small banks, all I can do is tell you what my bank can offer & let the person make the decision if they are going to go with me or another lender. The problem most consumers make is they approach getting a mortgage like shopping for a car. A car is not a 30yr commitment your mortgage is. For the average American their mortgage is there largest investment & I believe it should be treated as such.

Cheers

 

[Etorphine]

Medical people usually don't know much about finance.

A "doctor's loan" is just a marketing ploy. It's a normal loan at normal market rates. Sometimes they have a 1/2 point discount off the loans rate (this is on the back end, not the loan rate) but that's it. A great negotiator can usually get 0.5-1.0 point of the loan anyhow - so this idea of a doctor's loan is pretty bogus. I.e. you could call in and get a doctor's loan offer, then call back 5 minutes later and get the same or better deal.

Your interest rate doesn't matter as much as closing costs and the APR. In fact, it became illegal to even quote an interest rate without an APR a handful of years back - because interest rates mean nothing without an APR. And, on top of this - some companies calculate APRs differently.

Best advice, work with 2 competitive lenders, then start having them compete for you. Next best advice, find a real financial adviser who knows what they are talking about.



Plus or minus. I think they can be legit normal loans or bad ones - who knows, depends on the lender. I would just focus on doing what I said above.

One could work themselves into a big deal of trouble if they just signed up for a loan because it's a loan for doctors - without having a good adviser look it over. It takes time to learn how lending works, and if you don't know already then best to get a good adviser.

You're right, perhaps my previous statement was too general. My hope is simply that we treat these type of deals with suspicion and a close reading of the fine print, especially when the other party is aware you are a physician. This is probably more true for investing than it is for mortgages and loans. Physicians are notorious for making poor financial decisions and taking on the lion's share of the risk or bad rates. I thought this was just a saying until I personally saw some physicians make some exceptionally poor financial decisions. We all work too hard to be taken advantage of, and my only suggestion is that you all are wary of advertising your physician status in certain situations and whose advice you take, including mine.

 

[Patassa]

Go to: www.DoctorMortgageAlliance.com

* In regard to where you Match see States offered below. Available to Medical Residents and our Established Doc’s. All you need to be eligible upon graduation is your “Match Day” letter of employment. States = AL,FL,GA,TN,SC,NC,WV,KY,MO,WI,MI,IN,OH,IL,PA,NH,VA, and TX.

The Alliance was created by Medical professionals to assist fellow professionals with obtaining the best mortgage deal available today.

* Regarding your rate Q: Rates are low, 2.875 on a 5 year fixed/arm, to 3.250% on a 7 year fixed/arm term. Other terms 10 year fixed/arm and 30 year and 15 year fixed terms are available.
The Alliance has Loan Officers with vast experience in at least many different States.

For those of looking to purchase you’re encouraged to email or visit:
www.DoctorMortgageAlliance.com
[email protected] or call at 800-385-0766, we are very busy so email works best.
A mortgage Banker will contact you in a timely manner to discuss options.

This reminds of a big white van, no windows, and a sign painted on the side. FREE CANDY!

 

[KenithNosewater]

My school looked into www.physicianloans.com and says they are legit. I'm considering using them. I believe instead of being a broker they represent a large lender but cannot give out the lenders name until closing.