How to Shop for a Physician Loan

WHAT EVEN IS A PHYSICIAN LOAN?

There are two types of mortgages available: private funded loans (conventional) and government funded/backed loans. If a loan is not a government backed loan, it is considered a conventional loan. Unfortunately, there is a common misconception that physician mortgages are not conventional loans, but this is untrue. It is important to understand the differences between conforming and non-conforming conventional loans. Non-conforming loans, also known as "portfolio" loans, do not adhere to all the Fannie Mae and Freddie Mac guidelines for secondary real estate markets. However, non-conforming loans can offer better rates and terms than conforming conventional mortgages because they are not using someone else's money. Most physician loans are non-conforming but still follow 90% of the lending guidelines set by Fannie Mae and Freddie Mac.

Physician loan lenders offer both fixed rate mortgages and adjustable rate mortgages, and it is important to understand the pros and cons of each. While having 20% down payment may eliminate the need for a physician loan, there are still many perks to these loans, such as lower down payment minimums and no mortgage insurance. It is important to shop around and compare different loans to find the best fit for your needs.

WHAT ARE THE BENEFITS OF A PHYSICIAN LOAN

• Often, no down payment up to $1,000,000 or more.
• Loans up to $2,000,000 without being "Jumbo" which would typically come with higher interest rates.
• No Private Mortgage Insurance (PMI) on your monthly payment. (Typically required with any loan with less than 20% down)
• Usually lower interest rates
• More flexible with debt-to-income ratio.
• More flexible with employment verification (contract vs. Match Day letter)
• Will often provide for K1 status, or 1099 with less than one year employment.

There are many more benefits, but that was a short sweet list. 

HOW TO FIND A GOOD PHYSICIAN LOAN

_{When my husband and I bought our first home many years ago, (before my Real Estate Life) we didn't even know about Physician Loans. Due to his time in the service, we qualified for a VA loans, but truly, the terms of a physician loan are almost always better. We wish we'd known!}

_{So when it came time for our next house, and we had a little knowledge about it, we went searching... and became overwhelmed. Nearly every lender SAID they had physician loans, but I was soon to realize they were vastly different. So there were some things we had to ask straight up to weed them out before we wasted too much time:}

• _{Is your professional loan a non-conforming loan?}
• _{Do you have 100% financing options?}
• _{If I am a newly Matched doctor, will you require a copy of my Contract for an approval?}
• _{If I am a newly Matched doctor in residency, what will you need to see in terms of my student debt, and any deferment documentation?}

_{By asking a few lenders these same questions, we discovered right away that some were a loan in sheep's clothing. I had a mentor once call many professional loans PHO-sycian loans... because they're phony. ha!}

_{How do you find a true Physician Lender? Honestly, reaching out to your sphere, or a professional network that works with physician lenders day-in and day-out is an easy way to just get the best info without having to do the legwork.} 

_{Moving Medicine Partners, collectively, have closed hundreds of physician loans, and know which lenders have the best rates, closing costs, reliable lenders and products at any given time.}

Please reach out to us and we'll be happy to connect you to 3 lenders that we would trust with our own home loans. 

We hope you learned something from this and hope you reach out with any questions

Please contact Zoe Cangas directly at [email protected]

or Moving Medicine Partners at [email protected]