mgriffiths Posted October 20, 2016 Share Posted October 20, 2016 I am not sure if this is the correct place to put this, so I apologize if it is not. I also tried to search the forum and found nothing, so I hope it is not an often repeated topic/question. I recently accepted a job and will be graduating in December. This job will require a move, and due to a number of reasons am considering purchasing a home in the city I will be working. My wife and I are looking into rental options, but with 3 dogs (2 large German Shepherds and a rescued pit bull mix) I just am not confident we will be able to find much. My question is whether anyone has ever been able to secure a healthcare provider mortgage, or anything similar to a physician mortgage? For those that don't know what I'm talking about, physician mortgages allow graduates of medical school and/or physicians who have recently completed residency to purchase homes with a much lower down payment (i.e. 5% rather than the normal 20%) without having to pay private mortgage insurance (PMI). This allows physicians to buy homes sooner without having to compromise too much on paying off their loans. I ask because my student loan interest rate will be higher than any mortgage interest rate I am able to secure (interest rates are LOW right now). I would much prefer to only put down 5% on a mortgage and put the other free cash towards my loans (while keeping a healthy safety net). If you have any experience with this and can give some guidance/information it would be appreciated. Link to comment Share on other sites More sharing options...
Boatswain2PA Posted October 21, 2016 Share Posted October 21, 2016 I don't have an answer to your question, however I do have a suggestion....Buy the smallest, most modest home you like in a terrific neighborhood. Suddenly your 5% down may turn into 20% down, and your need for a physician loan goes away.Even if you can't quite squeeze the 20% down on a very modest home, ensure you get a standard mortgage (not FHA). That way, if you do have to pay PMI, the PMI will go away when you do hit 20% equity (FHA recently changed their rules so PMI NEVER goes away for the life of their loans).Pay off your student loans. Once your student loans are paid off, you can build a giant down-payment on the home-of-your-dreams by paying off your modest home and then saving cash. Link to comment Share on other sites More sharing options...
mgriffiths Posted October 21, 2016 Author Share Posted October 21, 2016 Well, we thankfully have the full 20% for a home within our budget. I would say it is a modest budget for a PA's salary, but definitely won't be "the smallest, most modest home [we] like in a terrific neighborhood." We kept our down payment from our previous home and my wife worked very hard while I have been in PA school to actually grow it just a bit. We did not use that nest egg for school because we wanted options for wherever we ended up. Paying off my loans is a major priority for us, and a "physician loan" would be ideal in that I could buy the home for minimal, and sometimes 0%, down, allowing me to put the down payment towards my loans. Thank you for your advice and thoughts. I agree with your comments and it may be what we decide to do, but I am still in the "gathering information" phase so we can weigh all of our options. Link to comment Share on other sites More sharing options...
Boatswain2PA Posted October 21, 2016 Share Posted October 21, 2016 Ahhhh...I gotchya. I would put the 20% on the home, with a 15 year mortgage, then work like MAD to get StuLoans paid off. But I understand the math behind your strategy. Link to comment Share on other sites More sharing options...
Wake PA-S Posted October 21, 2016 Share Posted October 21, 2016 Check out biggerpockets.com for real estate advice, there might be some members there who have experience with your situation. Link to comment Share on other sites More sharing options...
Katera Posted October 21, 2016 Share Posted October 21, 2016 Student loans are the devil. Everything else takes a backseat until you pay those off or they will bleed you slow like.... Link to comment Share on other sites More sharing options...
LKPAC Posted October 21, 2016 Share Posted October 21, 2016 Are you a veteran? Link to comment Share on other sites More sharing options...
mgriffiths Posted October 21, 2016 Author Share Posted October 21, 2016 I am not, and military is not an option for a number of reasons (#1: the wife would not support that decision, we've talked about it). Link to comment Share on other sites More sharing options...
greenmood Posted October 22, 2016 Share Posted October 22, 2016 No. I specifically asked about this when my husband and I were in the market the first time around. We are not physicians, and do not qualify for that loan program. We went through my hospital's credit union to get the mortgage, and the loan officers said they are asked that all the time and aren't aware of any "medical provider" program similar to the physician loan. That said I still ended up with a 3.25% interest rate on a 30-year, and PMI is so tiny on my little place that even with it added on, my mortgage is only 10% of my monthly income. Link to comment Share on other sites More sharing options...
mgriffiths Posted October 23, 2016 Author Share Posted October 23, 2016 Well, I have spoken to a real estate agent who is pretty hopeful that a local bank will take the business - he has one in mind that specifically works very closely with the ortho group I will be with, so maybe that will help. Link to comment Share on other sites More sharing options...
greenmood Posted October 23, 2016 Share Posted October 23, 2016 Well, I have spoken to a real estate agent who is pretty hopeful that a local bank will take the business - he has one in mind that specifically works very closely with the ortho group I will be with, so maybe that will help. That would definitely be your best bet. Find a local bank or credit union that is super solvent and accustomed to working with non-MD providers. Even meeting those criteria my credit union wouldn't do it. :D Good luck! Link to comment Share on other sites More sharing options...
Poetsiren Posted October 25, 2016 Share Posted October 25, 2016 Hello to my neighbor, mgriffiths!Unfortunately, my husband's layoff before I graduated PA school combined with my extended time to look for a job in an NP-saturated city meant that we ate through all of our savings (that we planned to use to buy a home). He has a job, but it still comes just shy of paying all the bills despite how Spartan we are living and the zero going out to eat. My husband and I are going to live in this craptastic rental house a bit longer and repair our credit fast with my upcoming PA salary and move sometime in the first part of the new year. Still, save what you can and let us know what you come up with! I will be out looking for those loans in the near future. Leave me some breadcrumbs, would ya?! ;) Link to comment Share on other sites More sharing options...
TThielen Posted October 27, 2016 Share Posted October 27, 2016 To respond to GreenMood, this is not true. Whoever your lender is gave you false information, maybe unintentionally but still false. I recently built a new home and got the Physician mortgage (PAs do qualify, at least through the band I went through). I put down 0% and got a lower rate by almost 0.5% than a conventional loan offered (which was still good). The physician loan also allows you to avoid PMI insurance (something a conventional loan makes you pay unless you put down 20% or more on the loan). It is a 15 year arm, but I plan to have my home paid off before the 15 years anyway (no penalty for paying early) and if I don't for whatever reason I would just refinance. I am not sure if this varies by state but I know there are only a few banks that offer this loan anyways (I went through Dart Bank in Michigan). MGriffiths if you have any questions you can send me a message. Link to comment Share on other sites More sharing options...
mgriffiths Posted October 27, 2016 Author Share Posted October 27, 2016 TThielen: Great info, and awesome for you!!!! Thanks... I spoke with a lender today who is pretty sure I will be approved for the physician loan!!!! I am filling out the pre-approval papers tonight as my wife and I will be traveling this weekend for a job interview (for her!!) and to look at homes - both rentals and for-sale. Link to comment Share on other sites More sharing options...
mgriffiths Posted October 27, 2016 Author Share Posted October 27, 2016 Well, phooey!!! The lender I spoke with got back to me and they closed their physician loans to any exceptions literally last month. They now only accept MD, not even DO, dentists, etc. They must have "MD" after their name. Hoping to find something, but definitely a setback. I was told that with the upcoming election a lot of banks are worried about instability with interest rates so they are "battening down the hatches" so to speak... Link to comment Share on other sites More sharing options...
mgriffiths Posted October 30, 2016 Author Share Posted October 30, 2016 Tthielen: I actually called Dart Bank and asked if they would be able to do a physician loan and they said YES!!!! Only question is whether they can do a mortgage in Indiana. They have done several recently, but regulations are always changing. I also have another lead for a more local bank, but it would be 3% down - still awesome! Link to comment Share on other sites More sharing options...
mgriffiths Posted November 4, 2016 Author Share Posted November 4, 2016 Well Dart Bank could do mortgages in Indiana, but they can't do their physician loan outside of Michigan. I've spent the better part of this week searching for other lenders who can do a physician loan in IN and only have one possible lead. UNTIL TODAY!! I was talking to my future supervising physician last night and our house hunt was brought up and I mentioned our difficulty qualifying for a physician type loan. Find out today that the CEO of the practice I'll be working with called two banks he has great relationships with and I was called today by two local bank presidents to discuss loan options - so I now have two banks offering me the equivalent of a physician loan!!! Feels good to be appreciated! Link to comment Share on other sites More sharing options...
heisman1979 Posted November 13, 2016 Share Posted November 13, 2016 I wonder if they offer that loan to other PAs in other states? I am looking to buy in Oregon. I will be in a similar situation in a year or so. Congratulations though, that's awesome! And you're right, it does feel good to be appreciated!! Link to comment Share on other sites More sharing options...
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