There is a bit of seasonality to physician financial issues, but nowhere is this more evident than with home-buying in the Spring. Last week we had a podcast about getting a good realtor and today we’re going to talk about doctor mortgages. I keep the most comprehensive list of physician mortgage lenders on the internet, and we sent them each a list of questions to answer to get specific information about each of their physician mortgage products. As you can see, there is quite a bit of variability from one to the next, so if a physician mortgage is something you want or need to use, (and if you’re not sure, read this) then you’ll need to do a little bit of work to see which is the best option for you. Remember that most lenders do not lend in every state, but there are multiple lenders for each state, so your first screen should be “who lends in the state I’m buying in?” So click on the map below first to get an idea of what is available to you before proceeding through the rest of the post.
Also, we dramatically underestimated how long this post would be (partly because there are so many options these days and partly because the agents were pretty wordy.) So we’ve heavily edited their responses such that this post is basically our writing, reducing the post from >10,000 words to just over 3,000. If compliance officers have a problem with something, let us know. Also, bear in mind that any information here is only current as of the date of publication, so, confirm important details with the lenders themselves.
The questions we asked were the following, including the last one just for fun. I’ve got to give the agents props–they were far less likely than the student loan refinancers to dodge that question!
- What are the terms of your physician mortgage product?
- What types of professionals qualify for your program?
- What is new with your company in the last 12 months?
- What do you see as your doctor mortgage product’s strengths over its competitors?
- Which of your competitors do you admire most and why?
We had a great response and hope you find this helpful if you’re in the market for a physician mortgage. Remember a doctor mortgage is a mortgage that doesn’t charge you PMI despite putting down less than 20%.
The Best of Physician Mortgage Lenders and the Loans they Offer
KeyBank Mortgage – Mike DeRaspe
Terms: 0% down up to $750K; 5% down up to $1,000,000; 10% down payment up to $1,500,000. Max loan size $3,500,000. NO PMI. NO Prepayment Penalty. Minimum credit score 680. Fixed rate mortgages include: 30, 25, 20,15, and 10yr fixed. ARM products include: 10/1, 7/1, and 5/1 ARM’s. Up to 360 day rate lock for new construction.
Professionals: Residents, Fellows, MD, DDS, DMD, Ophthalmologists, DPM, DO, Veterinarians.
New: Non-permanent resident aliens allowed. Non-occupant co-borrowers permitted.
Strengths: Great rates! Down payment, closing costs, and reserves may be gifted. Income based repayment for student loans used for underwriting. Close up to 60 days prior to employment. Only 2 months reserves for loan amounts under 500k and 4 months reserves over 500k; retirement assets count.
Competitors: I appreciate my competitors specializing in Doctor loans. We understand the unique circumstances Doctors may possess, and dedicate ourselves to delivering the best financing solutions for your home purchase. If one lender isn’t the right guideline fit, the group goes above and beyond in finding a lender that may be.
Mike can be reached at [email protected]
First Citizens Bank – Valerie Leonard
Terms: No limit on years in practice for established physicians. Fixed rate and ARM options depending on loan amount and occupancy type. Primary residence – 100% financing up to $750,000; 95% up to $1,000,000; 90% up to $1,250,000; 85% up to $1,500,000. Second home – 90% financing up to $750,000; 80% up to $1,000,000; 70% up to $1,250,000. Construction to Permanent and Construction Renovation – 89.99% financing up to $850,000. Minimum credit score – 680. Eligible borrowers include US Citizens, Permanent Resident Aliens, and Non-Permanent Resident Aliens
Professionals: Medical resident, interns, fellows and practicing physicians with the following designations~ MD, DDS, OD, DP, DPM, DO, DMD, DCh
New: Hospital CEOs were added as qualifying borrowers
Strengths: We offer our program to all qualifying doctors regardless of years in practice. We also offer second home financing, construction to perm and renovation options under this program.
Competitors: I admire SunTrust for their outreach to the physician community. They have abundant educational material available to borrowers shopping for this type mortgage.
Valeria can be reached at [email protected]
Simmons Bank – Cade Crawford
Terms: Minimum credit score of 640 – 0% down up to $750K 5% down up to $1,000,000 10% down payment up to $1,500,000. No PMI and No Prepayment Penalty. ARM products include: 7/1 and 10/1
Professionals: Medical Residents, Fellows, Medical Doctors and Surgeons, Dentists, Oral Surgeons with the following designations: MD, DO, DDS, DMD
New:. Condos can qualify for this program with streamlined guidelines for condo eligibility at the same rates of single family homes.
Strengths: Great rates! Up to 2% of the closing costs and prepaids can be financed on loans up to $750k. Student loans in deferral are not counted in ratios, Income based repayment for student loans is also accepted. Close up to 60 days prior to employment date with an employment letter.
Competitors: We appreciate our competitors that specialize in Doctor loans. We have very competitive features and guidelines and while we can help in most situations, if not, we will be glad to refer to one of the other trusted lenders that may have what is needed to help you.
Cade can be reached at [email protected]
Laurel Road– Americo Mendes
Terms: 0% down up to $750K; 5% down up to $1,000,000; 10% down payment up to $1,500,000, terms and conditions apply. Max loan size $3,500,000. Ask about our competitive terms on rate/term and cash-out refinancing. NO PMI. Fixed rate and variable rate mortgages available. NO prepayment penalty.
Professionals: Residents, Fellows, MD, DDS, DMD, Ophthalmologists, DPM, DO, Veterinarians.
New: Laurel Road’s digital application is available 24-hrs per day for busy working professionals. Laurelroad.com/whitecoatmortgage
Strengths: Applicants may receive up to $650 in closing cost credits. See laurelroad.com/mortgage
Competitors: All mortgage companies and banks that offer conventional and jumbo loans.
Americo (NMLS #108768) can be reached at [email protected]
All loans are provided by KeyBank National Association, Member FDIC and Equal Housing Lender. NMLS # 399797
Flagstar Bank – Nicole Smith
Terms: 0% down up to $850K; 5% down up to $1,000,000; 10% down payment up to $1,500,000. NO PMI. NO Prepayment Penalty. ALL 50 States.
Professionals: Medical Resident (Educational License), Medical Doctor (MD), Doctor of Dental Surgery (DDS), Doctor of Dental Medicine (DMD), Doctor of Optometry (OD), Doctor of Ophthalmology (MD), Doctor of Podiatric Medicine (DPM), Doctor of Osteopathy (DO), Certified Public Accountant (CPA), Attorney, Nurse Anesthetist, Nurse Practitioner, Clinical Nurse Specialist, ATP Pilots, Veterinarian
New: Non-occupant co-borrowers now allowed and non-permanent resident aliens. Income based repayment for student loans used for underwriting rather than a percentage of outstanding principle.
Strengths: All funds (reserves & closing costs) can be gifted. Close up to 60 days prior to employment. We can submit a full file into underwriting without a purchase contract. We are very preemptive in the process. See reviews here.
Competitors: Bank of America because they allow you to close up to 90 days before your start date.
Nicole can be reached at [email protected]
UMB – Doug Crouse
Professionals: Includes MD, DO, DDS, Doctor of Optometry, Doctor of Pharmacy, DMD, DVM, JD
New: This professional loan program is new
Strengths: 30 yr fixed rates available and no time limit out of school.
Competitors: I can’t answer this one with any confidence as I don’t know the service levels of my competitors. Even though my wife is a doctor we haven’t personally done business with any of my competitors.
Doug can be reached at [email protected]
Loan Depot – David Henderson
Terms: 5% down to loans up to 1.5M, 10% down up to 2.5M, 20% down up to 3M. We offer 30 year fixed, as well as 5/1, 7/1, and 10/1 ARMS. We allow primary home purchases up to 4 units and purchases for a second home, although with more down payment.
Professionals: Physicians, dentists, attorneys, pharmacists, veterinarians and other professionals with student debt obligations.
New: We increased our availability of low down payment loans to allow 5% down up to 1.5M.
Strengths: I believe all lenders intend to make qualifying as easy as possible for doctors, but we have aggressive guidelines to allow them to qualify with lower reserves, lower fico scores down to 700, allowing rent on departing residences, and qualifying new doctors with as little as 1 year of self-employment.
Competitors: This is a hard one to answer because each loan officer I’ve talked to in different companies has such different programs. I very much admire those that allow a 0% down product and it is something I’m actively promoting to our company, albeit with higher loan amounts to allow a greater amount of doctors within CA to qualify.
David can be reached at [email protected]
Fulton Mortgage Company – Jim Webster
Terms: 0% down including condos if Fannie Mae warrantable. 15 year fixed and several types of ARMs offered.
Professionals: Physicians, dentists, pharmacists, and veterinarians
New: Now offer a 15/1 ARM, which generally has a lower rate than a 30 year fixed.
Strengths: Can work with lower credit scores than most, as low as 680 with 2 years of no late payments.
Competitors: I truly feel my firm has the best doctor loan option and that is why I am here after working at two competitors. There are several doctor loan officers I know at other firms and I respect those people vs the firm.
Jim can be reached at [email protected]
Bank of Oklahoma Financial, NA – Bo Brown
Terms: 3% down to $650,000, 5% down to $850,000, 10% down to $1,000,000.
Professionals: Doctors, Dentist, CRNA’s, and DNAPs, and H1B Visas.
Bo can be reached at [email protected]
Huntington Bank – Sandi Jameson-Frith
Terms: 0% down to $750K, 5% down from $750K-$1.25M, 10% from $1.25M to $2M. 15 year fixed or various ARMs. Credit score of 700 required, but as low 680 if 5% down.
Professionals: Physicians, dentists, and veterinarians
New: As noted in the terms section, we have new higher lending amounts.
Strengths: Our loan amounts are higher than most. We allow up to a 50% Debt to Income ratio and have lower credit score requirements than most.
Competitors: I admire ALL my competitors! I work with quite few that I am able to refer back to for states that I cannot lend in. It is great networking and I am confident that they will treat my clients just as professionally as I do.
Sandi can be reached at [email protected]
First National Bank Southwest – Michael Bruegel
Terms: 10% down. 720 or higher credit score, ARMs only (5/1, 7/1, 10/1). We also offer a 3% down option, but it requires PMI.
Professionals: Physicians and licensed dental surgeons
New: Loans can be “recast” where you put additional principal down to lower both balance and payments. Also offer a letter of intent with full loan approval even without a property address for no cost, good for 90 days.
Strengths: A family owned bank that can close quickly with lower rates due to lack of overhead seen with larger banks.
Competitors: BBVA Compass with their 5% down loan up to $750K
Michael can be reached at [email protected]
Frandsen Bank – Brandon Reinarts
Terms: 0%-10% down options, all ARMs, 700 minimum credit score with no employment start date restrictions. Student loans excluded from debt ratios.
Professionals: Physicians, dentists, veterinarians, pharmacists, optometrists, attorneys
New: New longer fixed rate periods for ARM mortgages (up to 15/1). Down payment amounts also decreased.
Strengths: Personalization and community bank feel. Borrower applies, closes, and makes payments to our bank and their main point of contact for the duration of the loan will be the person who took their loan application!
Competitors: I admire any of the ‘big banks’ because they are usually the ones with the ability to offer 30 year fixed rate products in-house and can offer higher loan amounts.
Brandon can be reached at [email protected]
BBVA Compass – Mike Wagner
Terms: With a 720 credit score, 0% down to $650K, 5% down to $1.25M, 10% down to $1.5M, and 15% down up to $2M. 2-4 months of reserves required. Loans available with a score of 700+, but required down payments 5% higher.
Professionals: Physicians, dentists, attorneys, accountants
New: Loan tiers recently increased (so lower down payments).
Strengths: Higher loan amounts. We do loans with only one year of self-employment
Competitors: Several of the lenders that have been WCI supporters for a long time recommend each other’s services when they have a better product for the client. Those lenders put the client first, which is how I do business as well.
Mike can be reached at [email protected]
Regions Bank – Chris Roberts
Terms: 0% down to $750K an 5% down to $1M. 15 and 30 fixed, 5/7/10 year ARMs. Popular biweekly fixed rate option with significant interest savings. Deferred student loans not included in underwriting. Minimum credit score of 700 (720 for loans over $453,100).
Professionals: Physicians, dentists
New: Maximum loan amount with 0% down increased to $750K
Strengths: Our team’s ability to help clients navigate the process efficiently, quickly, and without headaches facilitated by our thorough pre-approval upfront.
Competitors: Cadence Bank due to their great leader and ability to do 0% down up to $1M.
Chris can be reached at [email protected]
Branch Banking and Trust – Holly Walsh
Terms: 0% down to $650K, 5% down to $1M with a score of 720+. With 700-719, 10% down required. 15 and 30 year fixed plus ARMs. Will close up to 60 days prior to start date with only a contract.
Professionals: Physicians, dentists, optometrist, podiatrist, chiropractor
New: We now loan to chiropractors and we have “decision-ready” which allows for underwriting in one week.
Strengths: Loans to podiatrists and chiropractors are rare and we only require 4 months of cash reserves.
Competitors: I admire Stephanie Arcelay (Suntrust) because I know that she has her clients best interest in mind and will do whatever it takes to make sure that they are taken care of.
Holly can be reached at [email protected]
Citizens Bank – Christopher Minear
Terms: Down payments start at 5% and loan amounts go up to $1.5M. Fixed mortgages from 10-30 years and ARMs from 3/1 to 10/1 available. We overlook student loan payments in qualifying for most residents and fellows.
Professionals: Physicians, dentists, podiatrists
New: Lower reserve requirements for residents, permit additional doctor loans, and upgraded our ability to make exceptions.
Strengths: Superior service, lower rates, favorable view of student loans in underwriting. I work exclusively with doctors.
Competitors: Great respect goes to Barb Reamer at Horizon Bank for her treatment of clients and the raving fans they become of both her and Horizon Bank.
Christopher can be reached at [email protected]
Willow Bend Mortgage – David Betbadal
Terms: 5% down to $1M, 10% down to 1.5M, and 15% down to $2M. Also 0% VA loans for vets and active military and a 3% down option (but with PMI) for smaller loans. Both fixed and ARM options.
Professionals: Physicians, dentists, veterinarians
New: No recent changes.
Strengths: The flexibility of working with a small bank, but still with all the loan options that big banks can offer. All 50 states.
Competitors: I admire my friends who are on this list that I used to work with. They give it their all and I’ve seen first hand the sacrifices they make and that the rest of us all do. There are a lot of sacrifices that are made to be an elite level loan officer, but they are worth it because it allows us all to help people with the biggest purchases of their lives and get on a path of building wealth through their homes. That, in turn, allows us to support our families, so I couldn’t think of a better thing to be doing.
David can be reached at [email protected]
Horizon Bank – Barb Reamer
Terms: 5/1 to 10/1 ARMs with 0% down up to $750K. Higher down payments required up to $1.5M.
Professionals: Physician, dentists, podiatrists, optometrists, and physician assistants
New: The new PA program is different from the physician program, but still 0% down and no PMI.
Strengths: Competitive terms, an attractive process and extremely vested team.
Competitors: When I’m not able to assist, whether its due to the geographic lending area, property type, or in some cases credit score I look to those lenders who have a program that is similar to our model and refer the client out. The team of lenders on this site are honestly strong competitors, each having something a little different that will meet a particular borrower’s needs.
Barb can be reached at [email protected]
Lake Michigan Credit Union – Corbin Buttleman
Terms: 0% down to $650 (sometimes $1M), 5% down to $1M, 10% down to $1.25M, 20% down > $1.25M. 15-30 year fixed and 5/1-15/1 ARMs. Available for purchase, refinance, and construction.
Professionals: Physicians, dentists, podiatrists.
New: Changed a previous 15 year balloon loan to a 15/1 ARM.
Strengths: As a Credit Union, we offer lower rates and costs as well as a 3% checking account (up to $15K balance).
Competitors: I really do not have a competitor that I know well enough to comment.
Corbin can be reached at [email protected]
Washington Trust Mortgage – David Fay
Terms: 0% down up to $750K, 5% down up to $1.25M, 10% down up to $2M. Down payment and closing costs may be gifted.
Professionals: Physicians, dentists, podiatrists, and veterinarians
New: Only 2 months reserves required and portfolio loans for good borrowers and those outside traditional guidelines. W can also assist with non-warrantable condominiums, recently self-employed, and foreign nationals.
Strengths: 0% down and a fast approval process due to our “true team spirit” rather than a large bureaucracy.
Competitors: Sandi Frith of Huntington Bank. Sandi always puts the needs of her clients first. If there’s an option her client needs and she doesn’t offer it, she’ll put the client in touch with a lender that can assist.
David can be reached at [email protected]
Key Mortgage – Fritz Julien
Terms: 0% down, 15 year fixed, 1/1-15/1 ARMs
Professionals: Physician, dentist, podiatrist, and veterinarians
New: New 15/1 ARM product.
Strengths: 0% down and 15/1 ARM
Competitors: Fifth Third Bank. Although their requirements are a bit more strict they do have a 30 year fixed rate option.
Fritz can be reached at [email protected]
University Federal Credit Union – Pedro Torres
Terms: 0% down to $453K, 5% down above $453K. Lower rates available with 10% down. 10, 15, and 30 year fixed, 5/1-8/1 ARMs.
Professionals: Physicians, dentists, pharmacists, nurse practitioners.
New: Gifted funds now allowed for loans up to $750K. NP and pharmacist availability.
Strengths: Low rates. Can close 90 days before start date. 30 day to close guarantee due to all in-house processing. In-house loan exception committee.
Competitors: Bank of America. Convenience, full-service banking and mortgage lending in all 50 states.
Pedro can be reached at [email protected]
Fifth Third Bank – Tony Lupescu
Terms: 0% down up to a $750K, 5% down to $1M, and 15% down up to $1.5 M. 15 and 30 year fixed and 5/1-10/1 ARMs. Don’t count deferred student loans against DTI ratio.
Professionals: Physicians, dentists, podiatrists
New: 0% down option increased to $750K and 5% down increased to $1M. Now lending to dentists.
Strengths: Close 90 days prior to employment. 0% down options, 30 year fixed option. 680 minimum credit score requirement (with 5% down). We frequently close in less than 30 days.
strong>Competitors: Bank of America because they can do the physician loan in all 50 states.
Tony can be reached at [email protected]
First National Bank – Kenneth Roos
Terms: 0% down to $650K, 5% down to $800K, and 10% down to $1M. 10-30 YEAR FIXED, 7/1-15/1 ARMS. Purchase or refinance.
Professionals: Physicians, dentists, veterinarians
New: Now exclude deferred student loans from underwriting.
Strengths: Construction/permanent financing with only 10% down.
Competitors: I admire Fifth Third Bank as a competitor. They are in the same footprint as we are and are very competitive on the rate.
Kenneth can be reached at [email protected]
Fairway Independent Mortgage – Josh Mettle
Terms: 7 separate physician mortgage programs. 5% down to $1.5M and 10% down to $2.5M. Also partnered with local community grant programs for trainees.
Professionals: Physicians, dentists, veterinarians, podiatrists, CRNAs, physician assistants and others with advanced degrees
New: Now serving all 50 states and contributing to a rental housing grant program for trainees and a coming education grant for CRNAs.
Strengths: SPEED! We close greater than 2/3rds of our loans in less than 17 days and many in 10 or less, even if declined by another lender, providing a competitive edge in a hot housing market. HomeScout tool allows accurate MLS searching. All 50 states.
Competitors: Every physician lender has something different to offer, some have zero down, some super low rates, some great customer reviews, fast service and closings. So I would say I’m a fan of all the hard working physician lenders that work tirelessly to serve their clients. There are too many to name just one (fortunately).
Josh can be reached at [email protected]
SunTrust Mortgage – Stephanie Arcelay
Terms: 0% down up to $750K , 5% down to $1M, and 10% down up to $1.5M. Close 60 days prior to employment. Disclosures here.
Professionals: Physicians, dentists, and podiatrists in training or within 10 years of completing training
New: New “SunTrust Medical Professional Mortgage” – lending to nurses, dental hygienists, physician assistants, occupational therapists and speech therapists without PMI and a 3% down option (also allows seller contributions).
Strengths: 0% down to $750K, flexible options.
Competitors: I greatly admire Sandi Frith at Huntington Bank. As a fellow working mother in this business, I have great appreciation for her approach to work/life balance both in her business and personal life.
Stephanie can be reached at [email protected]
Whew! That was quite the list. I hope you find this resource helpful as you search for a physician mortgage and if you need a realtor too, check with our partner Curbside Real Estate for a recommendation.
What do you think? Have you purchased a physician mortgage? Who did you use and what was your experience like? Who else did you consider and what made your decision? Comment below!
What a helpful post, WCI!
We will be buying a house in 15 months once all of our student loans are paid off. So, I will be sure to check back to this page then to check out the deals. We won’t have 20% saved for a down-payment by that point and have other factors forcing us to move (school concerns for my little girl starting in 15 months for the specific grade she will be in…family first!).
I also love that interactive map. Really cool. I’ve seen it before on your site, but always think its a pretty awesome feature.
Do any of these banks offer mortgages to 1099 physicians with less than 1 year of 1099 income? (I.e. accepting a 1099 job right out of residency)
I’m not sure, that’s always a tricky issue for mortgage underwriting. I think 1 year of 1099 income may be required. But it may depend on how the contract is written. If it is pretty guaranteed, they might.
Suntrust did for me in 2016 but it probably depends on the wording of your contract (mine had a minimum guarenteed hours with guarenteed hourly pay). I do not think any other banks would work with me in my area which destroys the idea of competitive rates. But I got back then 4.125% 30yr fixed zero down (not jumbo sized though and neither were my student loans).
Bank of America will permit 1099 income without previous history if the future contract provides for minimum guaranteed hours and rate of pay.
There is a fascinating new development recently highlighted by the WSJ. It is too early to tell if it can be recommended, but it would make a good topic for further research. There is a company entitled Unison. They help a home buyer with a down payment. In exchange for this service, Unison becomes an investor in your home. The down payment money is not a loan. Unison will contribute up to 1/2 of your down payment of 20 percent. In exchange, Unison gets a portion of the profit (or loss) you make when you sell the home. Unison takes a share of the profit, but also suffers a loss if you lose money when you sell the home. My vision is that this might help a doc in high cost of living area. More research into this product has to be undertaken, but it sounds promising and worthy of a post by the WCI. But on your “to do” list! If it is worth recommending, they could become an affiliate advertiser for you. Could you make more money by putting 1/2 of your down payment in an index fund versus sacrificing some home equity over 30 years? I think the numbers on average would say yes, but formal analysis is required.
Interesting. I don’t think I’d recommend it from the investment side- you’re basically banking completely on price appreciation which historically occurs at about inflation or inflation + 1% with plenty of risk. But from the consumer side….could be useful, but I’d rather not complicate my life with something like that unless the deal looked really, really good which I can’t imagine it will if this company is to stay in business.
Perhaps a silly question….growing a real estate portfolio, can I use these for investment purposes or primary residence only?
Thanks as always WCI
JustSayin’
At least one will do a second home, but in general, they’re not going to work for real estate investing. Plus, it’s tough to be cash flow positive only putting 0-10% down.
Similar to comment above, hoping to buy a vacation home/lake house 30 miles away to use on weekends. Not really an investment home but treated similarly by banks I think. Most of these physician loans are marketed towards new physicians buying their first home to be used as a primary residence. Anybody know if any of the lenders will let you do a low down payment and no PMI on a vacation home? We have 2 physician income and think we could save up a good down payment over the next 24 months but hoping to not wait so long when we can afford the monthly mortgage now. Limited to banks that loan in Wisconsin.
Thanks
Daniel
Yes, at least one will do a second home. Not sure they lend in your state though.
Here it is: Chemical Bank. Not in WI unfortunately. Sure you don’t want that second home in MI or OH?
I’m a little surprised and bothered that WCI is giving this topic so much attention. Curbside Real Estate is sponsoring WCI? I think this goes against most of what WCI has been saying for years. I hope this is not a sign of things to come.
If you want a ” physician loan” and no PMI and have poor documentation of current income then rent until you can afford a down payment.
You will be getting a higher Interest rate and paying more in fees if you use these products.
You’re surprised that I’m talking about buying homes and about mortgages? Are you new to the blog? A simple search of “mortgage” on the site shows 10 pages of results.
You’re surprised that I partner with a company that connects people with recommended realtors? This is at least the third year I’ve been doing that.
Or are you surprised that I partnered with Curbside. Have you had some kind of a poor experience with Curbside?
Or you’re surprised that I think there are situations where it makes more sense to use your cash to pay down loans and max out retirement accounts instead of using it for a down payment?
Or you’re surprised that I have advertisers at all? I mean, this is a for-profit site I’m running here. Always has been.
I’m astounded you’re surprised by any of this, but I’d like to hear why any of it bothers you. Based on your last three sentences, you’re just not a fan of physician mortgages. Okay, here’s a situation where I think you’ll agree it makes sense:
You’ve got a doc with $400K in student loans relocating to his and his wife’s hometown after residency. He is making $250K, his wife makes $100K. He has access to a 401(k)/PSP ($55K), a cash balance plan ($30K), an HSA ($6,850), and a Backdoor Roth IRA ($5,500). His wife has access to a 401(k) ($18,500) an a Backdoor Roth IRA ($5,500). Total available tax advantaged space = $121,350, or 35% of their gross income. They have been at their jobs for 12 months. They love their jobs and their jobs love them. He just made partner with a private group. They want to buy a $500K house. They have $100K. What do you think they should use it for?
1) Max out retirement accounts
2) Pay down student loans
3) Down payment
I would pick both 1 and 2 over 3. Nor do I think they need to wait until the student loans are gone to buy a house with a stable professional and family situation.
I agree with you on your example. I’m supportive of this for profit site and it’s great. I’ve learned a lot. I’m a smarter investor because of it and I thank you. I’ve had no experience with Curbside.
It’s always nice to have a recommended realtor but if you’re paying for that recommendation there may be some fees associated with the purchase that you may not otherwise have. Maybe not…
Realtor referral fees are pretty common in the realtor business. It’s ripe for disruption. There’s a fair amount of money sloshing around in that 6% fee on a $1M house. But I don’t think paying a referral fee will cost the seller MORE than 6%. As a buyer, the seller technically pays, although it’s probably embedded in the price of houses.
@Ben…Bank of America was one of the few lenders that will do 1099 (about 5 shot me down….). US Bank seems ok with it as well (just started chatting with them today). BankSNB does as well.
Thanks for sharing your experience. Super helpful for others.
We just went through this. If you have an RVU based contract, especially if there is no guaranteed minimum $/hr, the big banks have a very hard time with it (BofA, US Bank). They *may* be able to grant exception approval, but we ended up pulling out of the application due to significant processing delays and poor communication before a decision was made. We are in process (and already credit/income approved) with one of the smaller lenders on your list and it has been much, much easier.
Thanks for sharing your experience!
Hello!
I am in a similar situation. Would you mind telling me which small lender you ended up choosing?Thank you!
Shreya
I hope everyone goes into their home purchase with eyes wide open. Just because a physician family qualifies for a big loan with a small down payment doesn’t necessarily mean it is a good idea.
WCI, do you feel it could be helpful to link this blog post to other information offering advice on how much debt is reasonable to take on?
I did personally purchase a home for over 1M later in my career, but at that point we had the ability to purchase without a mortgage. Our mortgage decision was more of an investment and tax arbitrage decision.
It’s already linked to my original article about physician loans. Which other ones do you think it should be linked to?
Sorry WCI, I initially missed it but found it when I went back to look more closely.
For anyone who wants more information about some pros and cons of buying a house and taking on a big mortgage, check out the underlined “read this” link in the early part of the blog post.
Is there a anyone who let you not charge interest for like first 6 months.
What will be the best way to borrow between $100-200k. Is there a way to avoid interest if I am able to pay back in less than a year .
No. I don’t know of anyone who will loan you $200K for 6+ months without being paid interest.
You can get smaller amounts from a 0% introductory credit card deal.
I recently interacted with Jonathan Brozek at US Bank when we almost bought a house about a week ago. Very friendly and professional, rates among the best I found when I shopped. Will be at the top of my list when we finally make a purchase!
WCI,
Amazing site! Thank you for all the help over the years.
Do any of these companies offer construction loans for doctors? Or loans to purchase just the land for a future new construction? The housing market in my area is overly inflated and many of the homes are 40-50 years old. New construction seems to make more financial sense.
Yes, at least one does. I don’t think most do though.
Check with Josh Mettle of Fairway Mortgage. I realize this is an older post, but in case someone needs to know for future. We were looking at a construction to permanent loan and they said they offer one for physicians.
Which one is that? I couldn’t find it after going over the list.
Appreciate the input
Chemical Bank – Kenneth Moore
Terms: 0% down up to $1M, 5% down up to $1.5M. Purchases, refinances, new construction. 15 and 30 year fixed and ARMs.
Professionals: Physicians, dentists, veterinarians, and chiropractors
New: More flexible options for IDR participants- i.e. we use the IDR payment to qualify residents for loans.
Strengths: Lower down payments on jumbo loans. Residents treated same as attendings. Second homes and construction loans.
Competitors: Fairway Independent Mortgage Corporation out of Utah does a nice job on social media!
Kenneth can be reached at [email protected]
Just wondering if any of these lenders will work with residents?
Bank of America seems to be missing from at least a couple of the state lists (clickable from the map) that I checked. I thought they are in all 50 states?
Yes, they do lend in all 50 states. Which states did you notice they were missing from?
TX and KS.
Thanks. We’ll get it fixed.
Happy to help!
Bank of America is not listed in Fl neither
They’re not listed anywhere right now. They’ve asked to be temporarily removed from the listing. Hopefully they’ll be back soon.
Flagstar Bank gave me a pre-approval knowing full well I am a recent business owner. We put an offer on the house and today I find out that since I don’t have a year as a business owner, they can’t approve the loan. So warning with Flagstar and David Edmondson.
Also, BOA won’t lend for new business owners either.
I feel like in future posts/updates, this should be a required question.
Thanks for the feedback. Lots of little quirks in the underwriting and it’s hard to think of all the problems you can run into in advance, much less listing them all out. Imagine how long this post would be if I asked each person another 5 questions.
I have learned to Be careful with mortgage lenders/agents. They are almost always commission based and eager to have you as a customer. They don’t always intend to mislead but often say what you want to hear to get you sort of locked in. When you are 3 weeks away from closing it then becomes very difficult to switch lending company’s and start over from scratch and they know that. I bought a house through capital one mortgage (they are now closing the mortgage dept). Was supposed to be a “physician loan” with 10% down and no PMI then 2-3 weeks from closing they tell me they changed the program and she was not aware and they can’t do %10 on a second home and needed to be 20%. I had already shopped around specifically for this 10% and no PMI physician loan.. There weren’t other options. The story sounded suspicious… We were able to work it out but essentially became a conventional loan.
The point is, I will always have a little skepticism when dealing with commissioned based sales. They always want a customer and are often willing to mislead to get you yo be there customer.
Not many companies do doctor loans on second homes.
I would avoid Bank SNB. Drew was very disorganized, wasted our time, and made promises he couldn’t keep.
Thanks for the feedback.
Has anybody received a rate better than 3.75% on a 10 year ARM or 4.625% for 30 year fixed recently? No points/no fees. This is with 0% down for 750K, excellent credit scores.
WCI has done a great job by putting a lot of lenders for physician home loan in one place. Really appreciate that.
Unfortunately, many agents are not transparent. Almost nobody wants to tell you the rate difference between their conventional and physician loans. They don’t want you to shop around. I think many financial industry people think they are very smart and physicians are a bunch of stupid folks waiting to fork out money! I wish I can tell them that if physicians (esp those following WCI), were in the finance field, they would have been their bosses!! Most of my friends who went in finance are now at a very senior level positions in places like Goldman Sachs/ JPM Chase/ Citibank, etc.
Sometimes agents are hesitant to give rates because they’ll be different in four hours. Plus a lot of docs don’t realize there are more moving parts than just rate. I can give you the rate you want by changing points/credits/fees.
You know you can easily look up rates without calling agents, right? Just use Amerisave to see what the going rate is right now. As I write this comment, a 30 year fixed with 20% down and good credit in my state is 4.625% with no points and a $360 credit toward closing costs. If you want a larger credit, 4.75% gets you a $2648 credit (this is all on a $400K loan on a $500K house). You can get 4.5% if you pay $1992 in points.
would you rather get a loan from a local lender or a big bank, if interest and apr were the same ?
I prefer local but if everything else were the same I guess I’d go with the better service, which in my experience is usually local.
Do you know if any of these mortgages will finance a coop purchase? this is sort of New York City specific where a majority of the apartments for sale are coops
Good question. I’m not sure. But if you call up the ones who lend in NY, I’ll bet they can tell you in 30 seconds.
Based on this sites recommendation I ended up using Flagstar Bank. While the loan itself was average as far rates and cost I would warn strongly against working with David Edmonson. While he was professional David’s communication and organization skills were horrendous. It got to the point where the sellers sent a CURE notice and if the loan had been delayed even one more day we would have lost the property.
Glad you were able to close on time. Sorry it didn’t go smoother.
As always thanks for the valuable feedback.
Does anyone offer physician loans that will do 6months from contract start date besides USbank? Or more the 90days? In California?
Thank you!
6 months is very rare. More than 90 days is rare too. I don’t have the answer, but it would be great after you call the California lenders if you could report back here in case someone else has the same question!
Josh Mettle of Fairway Mortgage was very helpful when loan shopping. They use a nice interface to present all their loan options. Definitely include them in your loan search!
I had a fantastic home buying experience with Stephanie Arcelay from Suntrust.
I cannot recommend her and her team more highly.
I had heard about some bad experiences with Suntrust MD loans, but she and her team were rock solid.
Initially I contacted several mortgage agents in different companies, she seemed more on top of things and professional, which held true for the entire process.
On a Friday evening, like 6pm, my wife and I found our dream home with our realtor, and realtor asked me to ask Stephanie to addend the preapproval letter and approve a closer closing date as per the seller’s request. We were in a tight housing market so I was nervous about getting things done ASAP for our offer.
I sent Stephanie an email.
2 minutes later Stephanie had resent the document. On a Friday evening. My realtor was like, “what? wow, lets get that offer in!”
Everything else from her side went fantastic. She and her team (Michelle Ellzey) and the underwriter officer Kara Gabriel were prompt, very helpful, and surprisingly supportive during a stressful homebuying experience.
The law firm closing the deal messed up the title work, which delayed closing, which was very stressful, largely because I was not getting communication about what was happening. It was the Suntrust team that actually helped explain to me what was going on and kept me updated day by day, which was really reassuring. Once closing happened there was no question that her team had everything covered.
I never write reviews about anything. But Stephanie Arcelay and her team at Suntrust provided exceptional customer service and got me and my wife into my dream home in a very tight market. She certainly went beyond expectations. I 100% recommend her.
Her contact is above: [email protected]
Thanks for sharing your experience. Always great to hear good feedback about our partners/sponsors/advertisers.