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|
|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|
|Mortgage Length (Years)||30||30||30|
|Payment with Principal||$2,839||$2,635||$2,550|
|Private Mortgage Insurance||$0||$255||$218|
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.