Buying your first home is an unforgettable experience. For doctors, however, the experience can be delayed due to extensive education and training. But when the time comes, there is a big advantage when it comes to securing a home mortgage loan for doctors compared to everyday homebuyers.
This article is going to cover what you need to do when you begin your home mortgage loan search and what kind of loans are available for doctors.
Check Your Credit Score
Before you jump into the home mortgage loan search funnel, you’ll need some basic information. One of the primary pieces of information lenders will look at to determine your creditworthiness is your credit score. The higher your credit score the more favorable terms you’ll get from mortgage lenders.
Types of Available Mortgage Loans
If you are new to practice, you may not have the best credit score. Most physicians carry a lot of student loan debt as well. Even with less than perfect credit, and substantial student loan debt, you’ll have several types of loans to consider.
- Physician Loans – This loan is designed for the unique financial challenges of new physicians. Higher loans, low down payments and no private mortgage insurance are some of the best features.
- FHA Loans – This type of mortgage allows borrowers with lower credit scores to qualify. FHA loans are insured by the Federal Housing Administration and only require a 3.5 percent downpayment.
- VA Loans – Available to U.S. veterans and their families, this type of mortgage loan allows buyers to get a mortgage loan with no down payment.
- Conventional 97 Program – This program allows borrowers to use gifts to satisfy the 3 percent down payment requirement. It’s only available to first-time homebuyers and is limited to 30-year fixed-rate mortgages.
How to Choose the Right Mortgage Loan Officer
Like any financial professional you hire, you want to vet the officer’s product knowledge to see if they are experienced in what you need.
For new doctors, you likely will want to work with an officer that is familiar with physician mortgages and other loan programs for medical professionals. You will want to work with a loan officer that truly understands your financial circumstances and the best products for your unique situation.
Experience Matters Too
- How long has the loan officer specialized in physician loans?
- How many physicians have the loan officer worked with over his or her career?
Good Communication is a Must
- Is is it easy to get in touch with the loan officer?
- Does the loan officer communicate with you effectively during and outside of regular business hours?
- Can you reach the loan officer and get questions answered after hours and on weekends?
Is Private Mortgage Insurance Required?
Private mortgage insurance (PMI) exists to protect lenders if a borrower defaults on a mortgage payment. In most cases to avoid PMI homebuyers will need a downpayment of 20%. The great news for young doctors is many physician loan programs waive the requirements for PMI.
