Doctor Loans

If you are a doctor or thinking about becoming a doctor, you probably have more important things on your mind, like patients, money and student loans. But one thing you may not be thinking about is your pursuit of a home, but being a doctor can help you purchase a home whenever on your path that might happen to be.

Doctor loans have been in existence for some time, they were originally used to attract successful doctors to the banks. Since physicians are known to have a higher income and pose less risk as a borrower, they are an ideal candidate for lenders.

One of the good things about doctor loans is that they avoid private mortgage insurance or PMI that protects the bank if you don’t make payments on the loan. PMI is costly and doesn’t actually protect you as a borrower so it’s a good idea to avoid it if possible. One way you can avoid paying PMI is by putting down 20% of a home.  If you don’t have those funds available because you are starting out in your career, that may not be possible. If you are able to secure one of these loans, a low or zero down payment will make it easier to pay off student loans or invest in a 401K.

If you choose to go with a doctor loan, you can get into your home up to two months before you start your practice. Depending on your lender, they will use your employment contract as proof of income in lieu of submitting your tax returns. This is of great benefit to those that are moving and need to get settled before actually starting at their medical facility.

Just because you have the ability to secure a home without currently working, you should still have your employment contract reviewed by a lender in order to verify it will satisfy everything needed in the underwriting process to get you approved.

Although it does depend on the lender, many doctor loans don’t include student loan payments when calculating your debt-to-income ratio which can usually make it difficult to get approved with traditional loans. If you happen to be a physician early in your career, those student loans can be a tremendous weight, and a doctor loan is more accommodating to those with medical school debt.

There are plenty of reasons why a doctor loan sounds like a great idea, but with every major financial decision, it’s important to consider the risks involved. It can make it difficult for doctors to get into financial trouble if they find themselves in over their head with payments. It also doesn’t allow for a lot of time to consider the future and just how much you make like the home or area in a few years since the decision making is often done quickly.

Heroes Need Homes

If you are a medical professional or physician and think you might want to buy a home, consider your options with a doctor loan. We know that buying a home is a big decision no matter which route you choose, so don’t hesitate to reach out to the team at KC Investor Funding today!

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