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Obtaining a physician's loan without a contract

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  • Obtaining a physician's loan without a contract

    I am a newly graduated resident attempting to obtain a mortgage through Suntrust. I will be working as an independent contractor as an ER physician with a national practice group. This company does not create contracts with their physicians. In other words, employment contracts do not exist. After being initially denied for this reason, I drafted a document which stated the minimum shifts and pay per shift I was guaranteed to arrive at a base annual salary. I just found out that even this is not sufficient--the underwriters at Suntrust apparently demand a contract, which again does not exist.

    I can't imagine I am the first person to run into this problem because I know of several practice groups who don't do contracts. Any ideas or suggestions? Much appreciated.

  • #2
    In my experience, as a 1099, the banks need two year's worth of paystubs as your proof of income if you do not have a contract.

     

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    • #3
      I don't have a contract and I don't have two years' worth of pay stubs.

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      • #4
        Why are you in a hurry to buy a mortgage with zero down? Doesn't seem like the best idea.

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        • #5
          Its highly unlikely anyone will give you a mortgage anyway. Even with a contract I had to have 2 years of tax returns and reams of other info.

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          • #6
            Let me simplify my question: has anyone ever obtained a physician's loan without an employment contract (because you were 1099 /or your company simply does not do contracts)? Thank you.

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            • #7
              Nope, and I tried. I am a 1099 but have a contract. On a total aside, I would be uncomfortable without a basic contract defining responsibilities, expectations, etc...Its odd that your national practice group feels like they dont want that kind of protection. Im sure theyre concerned about being the employer, but thats all in the language.

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              • #8
                I know you're not asking for this advice, but in general, I wouldn't recommend buying a house until you have been in a steady job in that same location for at least a few years, and until you have made partner in your group or otherwise have confirmed that you will be remaining in that same location.

                Houses generally will appreciate less than the stock market, even after accounting for leverage, so there's usually not a good financial incentive to buy a house.  If you need the space, try to rent a house instead.

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                • #9
                  Especially beware of putting zero down, and especially further on an expensive home; that (and the closing costs) is all principal to steamroll interest with.

                  Don't let them sell you home ownership as the American Dream.  If it's the right thing for you, great, but the math probably doesn't support a zero-down loan.

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                  • #10
                    Lots of threads on this site about the wisdom of not immediately buying a house.  You may change jobs and cities.  A house is very burdensome to sell.  Accumulate a down payment and some other money.  be sure of your job and location.

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                    • #11
                      In my experience you definitely need a contract and if you don't have the two year income than your contract has to have a guaranteed salary. My production only contract (based on RVU) didn't pass.

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                      • #12
                        A smaller bank or one that you have a long term relationship may bend the requirements just a little for you.  I only had about 1.5 years of 1099 but 2 tax returns with 1099 when I applied for a loan with BBT.  I've been using them for about 7 years though, 1.5 years with my business account and the branch manager knows my face when I walk in.  I'm on a production based contract and my bank didn't even ask for it.  I did rent in the city I'm working in for the same 1.5 years before I applied and went with a 20% down conventional loan.  I'd say the security of knowing I'll stay at my job was a big factor for me.

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