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Physician Loans? Pros and Cons please...

My husband's a physician and we've just heard about this type of mortgage/loan and we're looking to get educated.   I'm wondering if there's a catch.  I've read that some won't allow for refinancing (in this market should that bother me?? Rates are SOOO low!).  I'm also wondering if the rates are competitive and what would can find in a more traditional mortgage.    We'll be looking for probably a 450K loan and are in Pennsylvania (Philadelphia).  Thanks for any help!
  • May 16 2011 - Philadelphia
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Answers (8)

Whacked by the Moderator's Laser. Glad they posted though, now I know I can go another 500K with 5% down :)
  • December 07 2013
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Humorous, in a sad way. Spamming, trying to get business on a request that's over 2.5 years old.

:-/
  • December 07 2013
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 [Self promotion deleted by Zillow moderator. Please see our Good Neighbor Policy for posting guidelines.]
  • December 07 2013
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Physician Loans are attractive to physicians for several reasons. Many physicians who may still be in a residency program are attracted by this loan because the lender will take into consideration the the applicants income will increase in the future. (physicians starting out may have a lot of debt associated to their education costs) This would typically mean a higher debt ratio than is ordinarily acceptable for the normal mortgage rpogram.
With a smaller down payment, mortgage insurance is usually required. The lender sometimes will build the cost of the mortgage insurance into the loan making the interest rate higher than the normal loan. This can be a good thing but an analysis would be recommended to compare the choices.
In order to tackle the conforming loan limit issue, many home buyers have found that a first and second mortgage are still an attractive solution. Again, an analysis is suggested to compare the choices to see which fits best into your longer term plans.
If you would like to find out how, I'd be glad to discuss it with you further.

Greg
  • May 16 2011
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What the President said. :) Find out what rate "they" are offering. Also see if a 7/1 or 10/1 is offered too unless you plan to be there longer than that.   
  • May 16 2011
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they have no MI and are very competitive for loan amounts greater than $417,000.

In your case with 10% down you can still set up a regular mortgage with no monthly MI and the rate would be comparable to or lower than on a physician loan.
  • May 16 2011
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Profile picture for KimberlyJT
We could do 10% for sure....not sure if we could make 20% as we're planning to hang on to our current place and rent it until the market improves.
  • May 16 2011
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Do you have the funds for a 10% or more down payment? 
  • May 16 2011
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