Josh Mettle, Fairway Mortgage
Medical professionals face several unique challenges when buying a home and applying for a conventional or FHA mortgage loan. Until recently, physician home loans or doctor mortgages were only available to M.D. and DMD, excluding many other medical professionals with similar needs.
Now medical professionals have options outside conventional and FHA loans to help them overcome these common challenges and in many instances borrow at lower total costs.
5 Facts You Should Know-
1. Conventional and FHA loans require private mortgage insurance. Medical professionals often have more education and therefore more student loans and expenses, than most borrowers. This frequently means that medical professionals have not been able to save the traditional 20% down payment, which is required to remove mortgage insurance with conventional financing.
Mortgage insurance or PMI is a costly insurance that protects the lender, but is paid by you the borrower. These monthly insurance premiums typically continue for greater than ten years or for the life of the loan in many cases with FHA financing. Avoiding these monthly premiums when putting less than 20% down is almost always going to save you significantly.
Medical professional loans help you avoid the costly monthly and up front funding fees that are typical with conventional and FHA financing.
2. A medical professional loan will enable you to close before you start a new position. Many of our clients are looking to coordinate their new home purchase with the start of their new job. Obviously having the flexibility of closing on the new home, before starting the new job is important to most relocating families. Many times our clients are moving from one state to another and once they find a home they want, being able to close quickly is key to getting their offer accepted.
Our programs allow medical professionals to close up to 90 days prior to the start of their new position, allowing them great flexibility in the timing of their offer to purchase as well as the actual closing or settlement.
Additionally we have the ability to postpone the first month’s payment by up to 60 days (depending on when in the month your closing is scheduled).
We also have the ability to close as quickly as 14 days in many cases. This enables you to write a very compelling offer, with short deadlines that the seller will find very attractive.
3. Conventional and FHA loans typically require you to qualify based on 1% of your outstanding loan balances as a monthly payment. Depending on the amount of your student loan indebtedness, this can make qualifying difficult or in some instances impossible. We speak with clients regularly who are declined for conventional or FHA financing elsewhere, only to be approved with our medical professional programs without any problem.
4. Conventional and FHA loans want to see a two year history of self-employed or 1099 income. Our medical professional programs have greater flexibility in approving newly self-employed or 1099 income borrowers. In some instances, we can qualify newly 1099 clients based on their employment agreements or offer letters with no history whatsoever.
If you are newly self-employed or 1099, we definitely want to better understand the terms of your income and see if we can help.
5. The medical professional home loan process should be less stressful than an FHA or conventional mortgage process. Our loan officers, processors, underwriters, and closers work with medical professionals all day every day. We understand the unique challenges and issues that are commonplace with medical professionals (including but not limited to the facts mentioned in this article). We have created systems and educated our team to do everything humanly possible to remove the stress from your mortgage and home buying experience.
Before you make a mortgage decision, I would encourage you to check your lender’s reputation online. One way to do that is to check their Google or Face Book reviews. You want to verify any lender you choose to work with, has experience working with medical professionals and the professionals they serve actually enjoy the experience of working with that bank.
I’ve included a link to several of our review sites below as well as a few of the testimonials our medical professional clients have sent us after their loan closed. We live to create experiences like this for our clients and would be delighted to have the opportunity to serve you. I’d invite you to call, email, or request your consultation via our website today.