Residents and graduates are frequently declined loan approval from a 'Wal-Street' banks because of their income to debt ratios (student loans) and are unable to offer special loan products due to Federal guidelines. The 'Main-Street' bank is far more likely to look at the applicant's whole package and use common sense underwriting. The default rate on physician's first home mortgages is almost non-existent. Thus, private and local bankers look forward to building relationships with physicians, dentists and pharmacists.
What do physician home loan products look it? It really depends on the local and private bankers home loan design. Typically, anywhere from 80% to 100% LTV (loan to value) with varius stipulations. Thus, residents, graduating residents and those in their fellowships really should speak to at least 3 local banks before deciding which home mortgage to take. Sometimes, not always, physician loans will have slightly higher interest rates and closing cost, but not always. Thus, price shopping the loan and loan product is extremely important.
Unfortunately, physicians are not taught finance in medical school and determining the best mortgage to an individual's financial position is not always easy if one is not trained and experienced in finance. Why would a physician purchase a home with all that student debt? Because, they have to pay rent anyway and in many cities across America and Oklahoma it's still cheaper to buy than rent with these historically low interest rates. Plus, it's a strategic way to begin building one's financial portfolio without wasting anytime. Being a heart specialist doesn't mean one is also Donald Trump. Be savy, be smart, and ask for ADVICE.