Physician Loans: Things Every Doctor Should Know About MortgagesPhysician Loans There are many special mortgage loan programs: for teachers, policemen and women, firefighters, and other first responders, physicians, nurses, military and VAs, government employees, and the list can continue. Below you will find some useful info regarding special home loans for Doctors, Dentists, and Veterinarians.
Qualification criteriaFirst, you have to check the medical practitioners that each lender is including in their program. Not all lenders include all categories and this program is specific to the length of time in the industry. It is there to assist newly licensed or newly practicing. It has lower loan amounts and lower down payments specifically for this reason. The following requirements fall info physician loan programs:
- Newly licensed Medical Residents (physicians/doctors, oral surgeons) who have recently completed their residency/medical clinical fellowship program, and are about to begin their new employment or have less than 6 months of residency/fellowship remaining.
- Existing Physicians/Doctors, Dentists, oral Surgeons practicing less than 1 year
- (MD)Doctor of Medicine
- (DDS) Doctor of Dental Surgery
- (DO) Doctor of Osteopathy
- (OD) Doctor of Optometry
- (DMD) Doctor of Dental Medicine or Surgeon
- (DPM) Doctor of Podiatric Medicine
Credit scorePhysician loans require you to have a good credit score. In the State of Nevada, your minimum credit score has to be 720 or above. Of course, the higher the score the better for you can negotiate more favorable terms and conditions. If your score is less than 720, it might be better to wait until you can improve your credit score and then apply for a physician mortgage program. Contact Casey Moseman, as she may refer you to an industry professional that specializes in credit restoration & credit repair. It might require some waiting time for credit score cannot be improved overnight but if you crunch your numbers you might realize that is better to wait.
Terms and conditions for physician loansThese loans were designed with this profession in mind and the fact that the default rate among physicians is very, very low. Starting from here lenders drafted these programs with the following terms and conditions:
- Low down payment. It can vary between three and five percent allowing you to purchase a house sooner rather that and later and not wait until you save enough money for a regular down payment.
- Money received as a gift can be used for down payment, for closing costs or other miscellaneous expenses related to the mortgage loan. Again, something that is not permitted under regular conditions as you have to prove to lenders your ability to save money.
- Generally, Lender Paid Mortgage Insurance (LPMI) will automatically be added. However, borrower paid may be available on a case by case basis as the lender may require a waiver. Mortgage insurance protects the lender in case you default and is what provides the lender the piece of mind for allowing such low down payments.
- Your student loan can sometimes be excluded when the lender is calculating your debt to income ratio. This happens if the student loan is deferred 12 months from the NOTE date. Hence, you can qualify easier or you can qualify for a higher amount. In all cases, this is an underwriter call.
- Accepts your employment contract as proof of income to qualify (on purchase only). Normally, lenders look at your earning history. So long as your salary increase or future income begins no more than 90 days after the loan closing date. And the employer must verify this in writing. This allows you to purchase a property immediately after signing a labor contract in comparison with other programs that have to wait until they have an established income history. There are a couple other nits and grits to this. You can discuss with Casey when you call her.
- You can use a physician loan to acquire most property types: single family units and townhomes. In certain cities and regions, one might not be eligible to purchase a condominium using this type of program.
- This works for a conventional loan only. Meaning on loans no more than $484,350 for Clark County, Nevada.
- You can get both fixed and adjustable rates loans via such programs so they are very competitive.
- If purchasing a home, at least one borrower must be a first time home buyer if you are putting less than 5% down.
Lenders offering such a product
Not all lenders have special programs for residents and fellows and/or for practicing physicians. To find out more or if you qualify in the state of Nevada call Casey Moseman 702-271-1274