Published on July 10th, 2018
Physician mortgage loans appear all good on the surface! No limits, money downs and private mortgage insurance (PMI). It seems to be a product that will benefit you for the time you take to train as a physician.
It appears that it will address all your large business loans queries and requirements. But akin to every loan, even this one has its clauses. Therefore, before you opt-in for one, learn more about it.
Why Are Physician Mortgage Loans Popular?
Let’s understand the reason why this type of loan came into existence. Lenders find physicians to be profitable customers.
They borrow large business loans when they start their career and eventually repay the amount in due time. Similar to every other business, the ultimate objective of lenders is to lend you the amount you need, introduce and sell you other products as your requirements keep changing.
A medical candidate who is getting into a residency having no earnings, zero cash and student loans to clear off usually qualifies for a mortgage. It is where the physician mortgage loans are useful.
These loans appeal to medical students. But if not chosen wisely it might result in unnecessary expenses. Hence, make sure you compare physician mortgage loans with the other kind of loans before arriving at a decision.
What Are The Unique Benefits You Get?
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Wondering How Physician Mortgage Loans Are Separate From The Other Conventional Mortgage Loans? Here’S How:
• Low to no down payments needed
• No PMI (private mortgage insurance ) required
• There are no rate increases on the vast loan amount, usually higher than an amount of $417k
• The lending takes place depending on the physician’s signed contract of employment
• Much less critical about the student loan debts
Who Gets Qualified As An Eligible Borrower?
Usually, a qualified borrower can be an attending physician or medical resident having a signed contract of their employment. Few lenders also add in veterinarians, pediatricians, dentists and other doctors to their list as well.
What Are The Mortgage Costs You Are Likely To Incur?
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Now that we know what physician mortgage loans are, it is essential to be clear about the costs that one will incur while opting for it. Many individuals concentrate on the monthly payments while they are planning to purchase a home. But there are plenty of expenses that add up to the overall mortgage costs. It comprises of the following:
- The interest – The interest expense is dependent on the loan balance, interest rate as well as loan repayment term
- PMI – The monthly payment gets paid till such time it reaches to a 20% equity
- Closing Expenses – It is a one time and out-of-pocket cost paid at the time of closing, that is summed up to the loan balance or wrapped in the loan, as a high rate of interest
Are you mulling over a physician mortgage loan? If yes, you need to find out the number of lenders that are interested in reducing their fees. It is more so when they are aware it’s competitive.
On several occasions, you will get discounts the moment’s lenders are aware that you are negotiating with various lenders.
So do you want to seal the best deal? If yes, then you need to ensure that you convey the same to the lenders you are negotiating. And when you are aware of how this loan works, you can work your way with this loan seamlessly.
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