26
Nov
2018

Physician Mortgage Loans – Seven Important Facts to Know

Loans are a part of our life that helps to manage our expenses when we are in need of urgent money! From business owners to doctors, everyone opts in for loans when they need it the most. Each year, approximately 16,000 new medical students and graduates dream of becoming ace physicians. They pursue their fellowship and residency programs that are available in the United States.

Other than pursuing a medical course, these students also have significant student loans to clear off. Based on a study by the Association of Medical Colleges, the medical loans are all set to increase in the years to come. If you are analyzing this situation from a traditional point of view, you would know why graduates have problems securing mortgage loans. There are excess debt and no income record. It is where the new age physician mortgage loans come to use.

Things to know about physician mortgage loans  

There have been misinterpretations concerning this loan. Hence, before you opt in for it, you need to get a clear idea on this loan. Simply put a physician mortgage loan:

  1. Needs fellows, residents, and physicians to invest a minimum amount of capital for the down payment. Today, the majority of the banks provide 100% financing.
  2. Doesn’t promise people to pay a PMI (Private Mortgage Insurance). Going by the rules of a traditional loan, till such time your equity is over 20% in the house, you will have to buy a PMI. It secures the lenders when you are not able to repay the loan amount. However, it’s always a smart call to avert PMI in a loan amount.
  3. Does not comprise of any student loans in debt to income ratio. It is a big deal and is one of the principal reasons why physician mortgage loans are considered beneficial for medical graduates.
  4. Simply accepts your employment/fellowship/residency contracts as proof of the amount of capital you need to earn in the forthcoming days. Generally, the traditional mortgage underwriters usually check a candidate’s earning record to determine if he/she is capable of repaying the entire loan amount.
  5. Can ask you for opening an account using the original bank details so that you are eligible for the loan. By compelling a candidate to open a bank account is a way to ensure, that the company is also interested in doing business with the person concerned other than just sanctioning a physician mortgage loan.
  6. Could be used by practicing as well as resident physicians. It is what 90% of the banks follow and provide.
  7. Is perfect to get used for the majority of properties such as town homes and single-family houses. However, in specific regions, there might be an issue to buy a condominium using a physician mortgage loan.

Comes with a set of lending guidelines that enable the candidate to make use of the capital they receive as a reward for down payments or cash reserves and much other closing expense. However, today it is essential to understand whether you need a physician mortgage loan in the first place before you opt-in for it. Once you know your requirement, you can reach out to banks and other service providers that offer the same. However, it is essential to know about the loan and its attributes before you reach out to a service provider or bank.

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