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Question about mortgage lenders

Home Mortgages and Home Buying Question about mortgage lenders

  • Avatar soundsystem 
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    Status: Physician
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    Joined: 12/14/2017

    Is there any advantage in going with a ‘physician mortgage lender’ when you already have enough cash for a 20% down payment? We’re currently looking for a new home and started ‘shopping’ for mortgages. I read one of the WCI articles on physician loans and contacted some of the lenders on the website to get some quotes. I also contacted a couple of the major banks for normal loans (Chase, BoA, etc…). I noticed that the physician lenders mentioned on WCI had a very confusing process to get qualified for the loan, etc… whereas the process has been very simple with the bigger banks. Moreover, the rates I’ve been quoted have also been superior with the bigger banks. Any comments on this? Are these ‘physician lenders’ only relevant when you have very little cash for down payment? Would appreciate any advice on this.

    #203047 Reply
    CordMcNally CordMcNally 
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    Status: Physician
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    Joined: 01/03/2017

    I doubt there will be much of an advantage since you have 20% to put down. It seems like the big advantage with a physician loan is that you can put little to nothing down and not have PMI but with a slightly higher rate. I’d shop around and go with whoever will give you the best rate.

    “But investing isn’t about beating others at their game. It’s about controlling yourself at your own game.”
    ― Benjamin Graham, The Intelligent Investor

    #203049 Reply
    Liked by Tim
    Avatar Peds 
    Moderator
    Status: Physician
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    Joined: 01/08/2016
    Is there any advantage in going with a ‘physician mortgage lender’ when you already have enough cash for a 20% down payment?

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    just leverage or if you have other use for your money.

    #203073 Reply
    Avatar ZZZ 
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    Status: Spouse
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    Joined: 06/18/2018

    “Is there any advantage in going with a ‘physician mortgage lender’ when you already have enough cash for a 20% down payment?”

    No. Just take the best deal you get.

    #203082 Reply
    Avatar jhwkr542 
    Participant
    Status: Physician
    Posts: 1316
    Joined: 02/15/2016

    When I was shopping for my mortgage about 15 mos ago, I applied for both physician and conventional mortgages with and without 20% down.  The best interest rate and lowest closing costs offer I got was from a physician mortgage with 0% down.  YMMV

    #203150 Reply
    Avatar dks45 
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    Status: Resident
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    Joined: 01/17/2018

    Is there any advantage in going with a ‘physician mortgage lender’ when you already have enough cash for a 20% down payment? We’re currently looking for a new home and started ‘shopping’ for mortgages. I read one of the WCI articles on physician loans and contacted some of the lenders on the website to get some quotes. I also contacted a couple of the major banks for normal loans (Chase, BoA, etc…). I noticed that the physician lenders mentioned on WCI had a very confusing process to get qualified for the loan, etc… whereas the process has been very simple with the bigger banks. Moreover, the rates I’ve been quoted have also been superior with the bigger banks. Any comments on this? Are these ‘physician lenders’ only relevant when you have very little cash for down payment? Would appreciate any advice on this.

    Click to expand…

    I am in a similar situation currently. Thus far I have received the best rate quote from one large bank, though one of the recommended lenders from this site was close. Both rates were better when using a “physician” loan vs a conventional loan (i.e. rates are discounted almost across the board from what I have seen for physician loans). This includes when putting up to 15% down. I have found that for every 5% down the rate generally decreases by 0.125-0.25%.

     

    My plan is to get rate quotes from all parties, then more detailed quotes with closing costs/lender fees/etc from the most competitive options and just pick the cheapest one.

    #203169 Reply
    Avatar soundsystem 
    Participant
    Status: Physician
    Posts: 58
    Joined: 12/14/2017

    When I was shopping for my mortgage about 15 mos ago, I applied for both physician and conventional mortgages with and without 20% down.  The best interest rate and lowest closing costs offer I got was from a physician mortgage with 0% down.  YMMV

    Click to expand…

    better rates with 0% down vs 20% down? I’m a little surprised.

    #203288 Reply
    Avatar jhwkr542 
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    Status: Physician
    Posts: 1316
    Joined: 02/15/2016

    When I was shopping for my mortgage about 15 mos ago, I applied for both physician and conventional mortgages with and without 20% down.  The best interest rate and lowest closing costs offer I got was from a physician mortgage with 0% down.  YMMV

    Click to expand…

    better rates with 0% down vs 20% down? I’m a little surprised.

    Click to expand…

    Me too.  I’ve heard that bank has higher rates currently, and it was probably a new program.  You just need to shop around and get the best terms and closing costs.

    #203296 Reply
    Avatar soundsystem 
    Participant
    Status: Physician
    Posts: 58
    Joined: 12/14/2017

    So are you supposed to be sending all pertinent documents (filling out applications, credit check, bank statements, etc…) every time you’re getting quotes? Most of the physician lenders require me to do that prior to give me any quotes. With the bigger banks not the case.

    #203322 Reply
    Avatar jhwkr542 
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    Status: Physician
    Posts: 1316
    Joined: 02/15/2016

    Don’t start applying for mortgages until you’re under contract with a home.  Then just go crazy applying to everybody.  I got the best rate after applying to about 12-15.

    #203348 Reply
    Avatar soundsystem 
    Participant
    Status: Physician
    Posts: 58
    Joined: 12/14/2017

    Don’t start applying for mortgages until you’re under contract with a home.  Then just go crazy applying to everybody.  I got the best rate after applying to about 12-15.

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    OK. I’m about to go under contract. Do you basically try to get approval from all lenders and see who offers the best interest? The way I’m understanding the process is that until the actual underwriters look at your application, you don’t really know if you’re fully approved and what interest/conditions you’re getting. Therefore, I suppose it makes sense to try to get approved by multiple lenders to complete final numbers. Is this assessment correct?

    #227237 Reply
    CordMcNally CordMcNally 
    Participant
    Status: Physician
    Posts: 2854
    Joined: 01/03/2017

    When I was shopping for my mortgage about 15 mos ago, I applied for both physician and conventional mortgages with and without 20% down.  The best interest rate and lowest closing costs offer I got was from a physician mortgage with 0% down.  YMMV

    Click to expand…

    better rates with 0% down vs 20% down? I’m a little surprised.

    Click to expand…

    The bank may decide that they ultimately make more money in the long run with a cheaper rate but more financed than the other way around.

    “But investing isn’t about beating others at their game. It’s about controlling yourself at your own game.”
    ― Benjamin Graham, The Intelligent Investor

    #227248 Reply
    Avatar jhwkr542 
    Participant
    Status: Physician
    Posts: 1316
    Joined: 02/15/2016
    Earnest refinancing bonus

    Yep, that’s what I did. Usually, that’s a breeze if you have good finances and credit score. You won’t go through underwriting on them but you’ll get rates you can lock in and details on points and closing costs. Everybody you’re approved with you should provide you a good faith estimate (now called a loan estimate form). This is where all the details come in and you can really get paralysis by analysis. But these forms are required by law and should be pretty across lenders. Apply to as many as you feel up to. Mortgage officers with different banks will know their approximate rates with different programs, so if you’ve reached out already, you can usually trust them. As you go, you’ll be able to weed out a few pretty easily (really high rates, closing costs, etc).

    #227295 Reply
    Avatar soundsystem 
    Participant
    Status: Physician
    Posts: 58
    Joined: 12/14/2017
    all the details come in and you can really get paralysis by analysis. But these forms are required by law and should be pretty across lenders. Apply to as many as you feel up to. Mortgage officers with different banks will know their approximate rates with different programs, so if you’ve reached out already, you can usually trust them. As you go, you’ll be able to weed out a few pretty easily (really high rates, closing costs, etc).

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    I’ve been working with several banks, and all of them need to see lot of documents prior to locking the rate, including the purchase contract. My situation may be a bit more complicated since I am not a W2 employee but rather a partner in a practice where I am paid by distributions, so this may complicate things (practice deposits money monthly on my LLC account).

    #227299 Reply
    Avatar adventure 
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    Status: Spouse
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    Joined: 10/24/2016
    Is there any advantage in going with a ‘physician mortgage lender’

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    Depends. Go for the best deal. There can be an advantage to using the extra equity for… whatever is better than the house! Sometimes that flexiblity might be better than the alternatives.

    That said,

    – you might get better deal if you are a real “customer” of multiple banking products.

    – you might get a better deal because they like you

    – we have a “physician/professional loan” and LOVE it, becuase it (1) wasn’t subject to the “jumbo” pricing, (2) is not a “conforming loan”, so the bank can’t sell it to Frannie/Freddie, so it has the nice advantage that it doesn’t get sold to a new lender every 2 years like our other “nomal conforming residency house mortgage”.

    #235658 Reply

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