LENN. JUST WHAT IS THE "PHYSICIAN'S LOAN"??
Yesterday, I Posted a request for contacts from loan officers with a loan product known as the "Physician
's Loan".
Most of the comments I received asked "What is a Physician's Loan"?
THE PHYSICIAN'S LOAN
Over the years I have had the good fortune to work with several physician home buyers. Generally, if they are new graduates and just finishing residency or new to practice, they will not qualify for a regular loan. Residency income is low and they have no employment history. Unlike many newly graduating professionals, doctor students spend full time in study or, if they have work-study, they make very little.
THANK GOODNESS FOR THE PORTFOLIO LENDERS.
The Physicians I have sold to in the past did, indeed finance their home purchase through a "Physician's Loan". In fact, one couple was interesting because the husband was a new physician in residence in Baltimore and the wife a newly graduated attorney with a her first job with a law firm in Washington, D.C. They too financed their new home purchase with the "Physician's Loan". The new home they purchased was in Laurel, MD, half way between Baltimore and Washington. Perfect.
Another buyer who used the Physician's Loan was a successful heart surgeon relocating from upstate New York to Montgomery County, MD so his son could attend one of the local private schools for boys in the area.
Another was a physician who relocated from Chicago with his wife to be close to his son and daughter-in-law (both Ophthalmologists) to whom I had sold a home in Columbia, MD. This was an interesting family because when it became known that there was a new baby on the way, the other grandparents relocated to the area and I sold them a home around the corner. All together, that family purchased 3 homes, all in the same block. There were 4 physicians in the family.
The reason those buyers used the Physician's Loan is because even though they had the income/cash to manage a regular loan, they didn't want to liquidate investments. The Physician's Loan solves that problem because it's 100% financed.
The reason the banks have special terms and conditions for physicians is because it's good business. These "upward mobile professionals" will see their income rise significantly in the coming years and banks make it easy for them to identify with that bank and their lender of choice for all matters financial.
Many mortgage companies are not able to do this loan due to the EXCESSIVE regulation and continuing audits from regulators.
Banks, however, are not subjected to the same government intrusion into their affairs.
For the Physician's Loan I located today, the following terms apply.
Offer available to the following medical interns, residents, fellows, and licensed physicians who have completed their residency, internship, or fellowship within the last 10 years: Medical Doctors, Dr of Osteopathy, Dr of Dental Surgery, Dr of Dental Medicine, Dr of Optometry, Dr of Ophthalmology, Dr of Podiatric Medicine, Dr of Surgery, and Dr of Psychiatric Medicine.
LTV
100% up to $650,000
95% up to $850,000
NO PMI
Minimum FICO LTV > 90% = 720 LTV ≤ 90% = 700
Student loans excluded from ratios if deferred for 12 months
Eligible Products 15 and 30 year Fixed Rates, 5/1, 7/1, and 10/1 LIBOR ARMs (Fully Amortizing)
Purchase Money only
Occupancy for Primary Residence
Eligible properties, Single Family attached/detached, Warrantable Condos and PUDs
Eligible Products 15 and 30 year Fixed Rates, 5/1, 7/1, and 10/1 LIBOR ARMs (Fully Amortizing)
This is good business for banks because these borrowers also become depositors, often finance medical practices and are generally good for business.
These physicians are also very good for their real estate agent.
Courtesy, Lenn Harley, Broker, Homefinders.com, 800-711-7988.
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