Doctor Loan Program For Physician & Doctors
As a physician, it is much easier for you to get approved for a loan based upon your income, collateral and the benefits to a bank if they handle other businesses like your savings, checking, CDs or money markets accounts. Physicians must borrow smartly from lenders without hurting their finances in the future and also get all the benefits from their capital.
Why We are best for provide Physician Mortgage Loans
Plenty of banks are willing to provide Physician Mortgage Loans to physicians, but some come with more risks than others. It is essential to know and understand each product available to you. For most doctors who have just passed out of medical school and started practicing, might seem slightly complicated. The terms and conditions, although simple can sometimes be confusing for physicians buying a home for the first time. Some points that physicians must remember before choosing the right loan for them are:
• The application process at most banks take at least 30 days to complete
• Physicians must provide a detailed outlining of their business plan, tax and bank records, and collateral in case they are unable to pay the loan.
• Physicians must choose long-term debt (loan lasting more than one year) to cover their long-term needs
• The terms of loan hold each partner within the practice individually liable for the loan if it goes into default
The Physician Mortgage Loans allow doctors/physicians many benefits like making principal reductions that trigger both lower mortgage interest rates and lower minimum monthly payments. For these reasons, a doctor loan is considered an extremely lucrative idea, but not everybody qualifies to apply for one.
Eligibility Criteria for Doctor Loan Program:
The Doctor Loan Program is a residential mortgage loan with special underwriting explicitly developed for medical physicians and dentists, optometrists, podiatrists, and veterinarians. The following list of doctors/ physicians are eligible to apply for the Doctor Loan Programs:
• Medical Resident
• MD (Medical Doctor)
• DPM (Doctor of Podiatric Medicine)
• DO (Doctor of Osteopathy)
• DDS (Doctor of Dental Surgery)
• DMD (Doctor of Dental Medicine)
• OD (Doctor of Optometry)
Most leading banks loaning Physician Mortgages don't consider any confinements in agreement to the number of years spent by the doctor before offering lucrative home loan rates. Additionally, all borrowers of Doctor Loan Programs close on a home up to 60 days preceding the beginning of their work which makes this program diverse when contrasted with other loaning programs.
Benefits of Physician Mortgage Loan:
The sole purpose of leading banks giving out physician mortgages is to develop a good working relationship with high-income professionals. This is a very unique and lucrative program assisting doctors/ physicians to buy their own home at the very start of their career. Some benefits of this program that make it so profitable for physicians are:
• Higher chance of Approval- Physician Loan Program or Doctor Loan Program holds a higher chance of approval as most often new in practice physicians are approved with physician home loans and declined for a conventional loan because they just don’t fit the guidelines due to student loans
• Low Down Payment- It has extremely low down payment of 0-5%. Depending on the bank making the investment, where the property is located, and the loan amount, usually 90-100%of the loan value is financed.
• Flexible Proof of Income- It allows flexibility concerning proof of Income for a self-employed physician to qualify with as little as a six-month history of income, enabling them to buy a home almost two years earlier with a doctor loan than a conventional loan. For physicians who are at the start of their career, the employment contract is also considered as an eligible proof of income.
• Higher Loan Limits- Lenders provide higher loan limits depending on where you are in the country and by the institution that is making the physician loan. But, is generally a higher loan limit than any conventional loan amounting between $ 850k to $1.5 million.
• PMI not required- Principal Mortgage Insurance (PMI) is a costly insurance policy that protects the bank if the mortgagee, fails to make the promised payments on their home loan. Physician Loan Program does not require you to purchase PMI as it is considered that a physician’s odd of defaulting the loan is very low.
• More Liberal Guidelines- Lenders underwrite the loan with more liberal guidelines for the physician mortgage loan, but for taking on that added risk that standard guidelines do not allow, they charge a slightly higher rate. If typically the doctor mortgage is going to save you .5% to 1% in annual PMI, this enables you to pay .25% to .5% higher rate for this loan type.
• Waive off Medical School Loans- For physicians carrying heavy student loan burdens early in their careers, the Doctor Loan Program is a huge benefit as it waives off medical student loans from their debt ratio.
• Allow Gift Funds for closing costs- Some Physician Loan Programs even allow physicians to use gift money for a down payment or closing costs.
The Doctor Loan Program can be referred to by as many names as possible, but they will all have one thing in common which is the fact that these special loans are specifically to help doctors buy homes. Several leading banks offer these loans. These loans were created when there were realizations in the market that there is a need for a product to assist new doctors who are fresh out of school to reduce their burden of student loans. The benefit of this smartly designed product is that new doctors have a high-income potential and excellent job security which reduces the odds of them defaulting on their mortgage.
Before Doctor Mortgage Loans, it seemed impossible for a medical student to get his residence, with zero earnings history, no cash, and abundant student loan, to qualify for a loan. Doctor mortgage loans have benefitted the early-career physicians by lending them a more significant amount of money with fewer pre-requisites. The goal for banks has been to help physicians get a kick-start to their career and has been extremely appealing because of being marketed as a unique program just for doctors.