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Doctor\'s Loan or Regular Loan?

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  • Doctor\'s Loan or Regular Loan?

    I am getting mixed feedback. Some of my physician partners say doctor's mortgage's are good for 0 down. Some say they are garbage and you can get a better "regular" loan. Thoughts? Experience?

  • #2
    I know this isn't the answer you're looking for but...it depends. What kind of rates can you get through both avenues...are you planning on using a down payment...etc?

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    • #3




      I know this isn’t the answer you’re looking for but…it depends. What kind of rates can you get through both avenues…are you planning on using a down payment…etc?
      Click to expand...


      I can do whatever in terms of downpayment, term, etc. I just want to do the best thing financially. Assume I could buy the house straight cash if I wanted to.

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      • #4
        If you could buy the home with cash, then you are venturing into a wholly different question relating to risk tolerance, investment objectives, existing asset composition, etc. since you are borrowing money presumably for the purpose of investing it somewhere else.  Also more details about the terms of doctor loan / regular loan, how long you plan to live in the home, etc. will be important.

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        • #5







          I know this isn’t the answer you’re looking for but…it depends. What kind of rates can you get through both avenues…are you planning on using a down payment…etc?
          Click to expand…


          I can do whatever in terms of downpayment, term, etc. I just want to do the best thing financially. Assume I could buy the house straight cash if I wanted to.
          Click to expand...


          There's a long list of questions that need to be answered before a financial evaluation can be done on what is best for you. This will also likely be largely personal decision based on what you're comfortable with.

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          • #6
            They used to be easier to get, but in recent years it was indeed easier to get regular loans at better terms. With your financial profile that will probably be the case. Just search them all and take the best overall package (includes convenience, other banking aspects, etc...).

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            • #7
              usually physician loans charge slightly higher rates to compensate for the lowered percent down.

              so if you can do 20 and get a great rate on a 15 yr, do that.

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              • #8
                I’m personally not a fan of 100% loan to value loans. You’re starting out under water (when u factor in closing costs and such). If you’re making physician salary you should easily be able to cough up 20%. If not, you’re either doing something wrong or you’re buying too much house. Put 20% down and get the best rate you can qualify for. This will be especially important now that most physicians wont be itemizing anymore under the new tax plan.

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                • #9
                  It really comes down to whether you have a better use for your money. If you have 7% student loans (and must buy) then yes, use the doctor loan. But if you can save up a down payment you have more options, slightly lower fees, and slightly lower interest rates.
                  Helping those who wear the white coat get a fair shake on Wall Street since 2011

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                  • #10
                    Would putting more than 20% down be beneficial?

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                    • #11
                      If you aren’t gonna be itemizing with the new tax law, you should buy the house in cash if you can afford it, imo. Without the mortgage deduction benefit, it’s bascially like carrying another enormous student loan that has been refinanced.

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                      • #12




                        If you aren’t gonna be itemizing with the new tax law, you should buy the house in cash if you can afford it, imo. Without the mortgage deduction benefit, it’s bascially like carrying another enormous student loan that has been refinanced.
                        Click to expand...


                        Where can I read about all the new tax law changes in a concise manner for a noob?

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                        • #13


                          Where can I read about all the new tax law changes in a concise manner for a noob?
                          Click to expand...


                          There are no new tax law changes. We are still waiting for reconciliation. The Senate and the House have each passed their versions. You can find the details of the Senate version here, but this is incomplete. It's just the easiest summary of the highlights I've found. Forbes has its take here.
                          Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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                          • #14




                            I am getting mixed feedback. Some of my physician partners say doctor’s mortgage’s are good for 0 down. Some say they are garbage and you can get a better “regular” loan. Thoughts? Experience?
                            Click to expand...


                            Here's one example you might find helpful -

                            One of our clients wants to buy her first house. It is $630k, firm and she has excellent credit. She can put down 20% and wants a 15-yr loan, but that still leaves her with a jumbo loan at 4%. I contacted a realtor we work with who does doctor loans and he quoted 2.875% - 3.375% (depending on points and credit). Keep an open mind about doctor loans - they are not only for doctors who are short on cash.
                            Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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                            • #15
                              We bought a house 1.5 years ago and the dr loan rate was within 0.25% of the conventional but we had the 20% to put down so we went conventional. It just matters which bank and your comfort with debt.
                              We didnt want to be underwater. Also, in Texas your house is protected during lawsuits and that gives a bigger downpayment and 15 year term additional value to me.

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