Loan Comparison
Let’s compare.
You’ve heard about the physician loan, and you’ve probably read about some of the benefits it offers (no PMI, up to 100% financing)—but how does it compare to other loan programs? The chart below outlines the differences between three loan programs you’re probably considering: the physician loan, an FHA loan and a conventional mortgage.
| Doctor Loan | FHA Loan | Conventional Loan | |
|---|---|---|---|
| Purchase Price | $500,000 | $500,000 | $500,000 |
| Down Payment (%) | 0% | 3.5% | 5% |
| Down Payment ($) | $0 | $17,500 | $25,000 |
| Base Loan Amount | $500,000 | $482,000 | $475,000 |
| Upfront Mortgage Insurance | $0 | $8,444 | $0 |
| Total Loan Amount | $500,000 | $490,944 | $475,000 |
| Interest Rate | 5.5% | 5% | 5% |
| Mortgage Length (Years) | 30 | 30 | 30 |
| Payment with Principal | $2,839 | $2,635 | $2,550 |
| Private Mortgage Insurance | $0 | $255 | $218 |
| Monthly Payment | $2,839 | $2,861 | $2,768 |
Some other factors to consider…
WILL YOUR DEFERRED STUDENT LOANS COUNT AGAINST YOU?
Like so many of your fellow physicians, you’ve probably racked up a bit of student loan debt. Unfortunately, traditional mortgages and FHA loans include these loans in your debt-to-income ratio, and can keep you from qualifying for the home loan you need. Depending on your career stage (med student, intern/resident, fellow, attending), the doctor loan program offered by the bankers in our network DON’T count your deferred student loans against you, making the physician home mortgage loan a very attractive option for doctors.
ARE YOU ABLE TO USE YOUR FUTURE INCOME?
Unlike most other loans, the doctor loan allows emerging physicians to use their future income to pre-qualify for a home loan: all that’s needed is an employment contract. Conventional loans require two pay stubs as proof of income and therefore don’t allow physicians to use future income while pre-qualifying. And FHA loans cannot close until the doctor provides a pay stub or other acceptable evidence that they have begun their new job.