March 2013 Posts
The Doctor Loan Program is a residential mortgage loan with special underwriting developed specifically for medical physicians and dentists, optometrists, podiatrists, and veterinarians. Most doctors are looking for loans with low interest rates that enable them to put very little money down, not use their student loan debt in their debt ratio, use future income rather than current or past income, and enable them to move in before they start their job. This scenario poses many challenges for most lenders because most physicians would not qualify for the best rates given the type of loan they need. Banks try to do these loans with higher rates and less attractive terms.
Physicians with high credit scores have a very low risk of default on residential mortgages even if they have high debt, higher ratios and few assets. Hence, the doctor loan program was started to give physicians access to mortgages with great interest rates, no or very little money down required, and no mortgage insurance usually.
There are five different loan programs in the area, and all of them have different requirements. Suntrust, Regions, First Federal, Bank of America and BB&T all have doctor loan programs in the area.
Why should you take advantage of a doctor loan?
- Low interest rates compared to everyone else (2.99% for a 7 year ARM)
- No private mortgage insurance
- 0-5% down payment required, 95-100% financing
- Student loan debt not included in debt to income ratio
- Can move in prior to starting your job (45 days before)
- It is more expensive to rent than buy in the Charleston region right now
- You can stay in one place for your entire residency