What To Know About Doctor Loans
Buying a home is a major financial step and also a great way to put down roots in your desired location. For many professionals, buying a home as soon as possible is a goal. However, for those in the medical field, buying a home can be a challenge. Doctors, in particular, may find it difficult to purchase due to high levels of medical school debt. The good news is that there is a type of financing that takes their situation into account. Here's what you should know about doctor loans or doctor mortgages.
Whether or Not You Qualify
The first thing to consider when it comes to these types of loans is whether or not you qualify for this type of financing. These loans are available to residents, attending physicians, and other types of medical professionals. Most lenders will require that you provide proof of your degree and of your employment before this type of loan is available. With a doctor loan, you will receive favorable loan terms that allow you to purchase a home even with large amounts of student loan debt.
Your Finances Are Important
While a doctor mortgage does allow for many in the medical field to purchase a home, there still are a few financial requirements that you will need to meet in order to obtain this type of financing. Healthy finances are a must in order to obtain a doctor loan. Credit scores of around 700 are typically required, though some lenders will go as low as 680. A debt-to-income ratio of 45 percent or less is also a requirement for these types of loans. However, it's important to note that your student debt will not be included in your debt-to-income ratio calculation.
The Advantages of These Loans
If you are considering a doctor mortgage, it's important to know about the advantages of these loans in order to determine if it's the right option for you. Private mortgage insurance, or PMI, is not required for these types of loans, something that will help you save each month. If you are having trouble saving up a down payment, this type of mortgage may be right for you as well. Little to no down payment is needed. However, if you are able to come up with a down payment of 5 percent or more, you may qualify for more favorable terms.
If you are considering a doctor loan, there are a few things to keep in mind. First, you should determine whether or not you qualify for this type of loan. Being financially healthy is also key if you are considering this type of loan. There are also a variety of advantages to these types of loans that you will want to consider.