Welcome to Physicians and Properties
Are you a physician who wants to get started investing in real estate? If so, you likely have an incredible amount of medical school loan debt and your savings account may look more depressing than me pounding Taco Bell alone on a Friday night after a long clinic day while the family is away. Anyways, don’t give up just yet – there’s a loan product specifically designed to help physicians overcome these hurdles and get started on the journey to achieve their real estate investing dreams. Enter, physician mortgage loans!
What is a physician mortgage loan?
Introducing the physician mortgage loan – a unique loan product exclusively available to licensed physicians, including medical doctors, doctors of osteopathy, and dentists. Interestingly, some banks offer it to other high-paying jobs in the medical field like physical therapists and optometrists. With a physician mortgage loan, you can buy a primary home on a 30-year fixed mortgage with little to no money down. And, you do not have to pay private mortgage insurance (PMI). THIS IS HUGE!
Buy a home with 0% down!
This deserves its own heading. The physician loan is such an incredible loan product for physicians looking to get started in real estate. By allowing you to purchase a home with little to no down payment, the physician mortgage loan helps you overcome the challenge of saving up for a large down payment while dealing with significant student loan debt. The bank takes into account your future income potential and minimizes the fact that your debt-to-income ratio looks terrible initially,
Importantly, you can qualify for a physician mortgage as a resident! I bought a home in Florida prior to my family medicine residency and it cost me $58 dollars out of pocket. That $58 dollars, less than a nice dinner, bought me a home that was perfect for my 3 years of residency and now generates over $800 dollars a month in cash flow and has over $150,000 dollars worth of equity. Read this again, the physician mortgage loan allowed me to buy a cash-flowing asset worth hundreds of thousands of dollars for $58 dollars. Just get started!
No Private Mortgage Insurance (PMI)
Moreover, physician mortgage loans typically do not require PMI, which can save you thousands of dollars over the life of your loan. PMI can add a significant cost to a mortgage payment, and it can take years for borrowers to build enough equity in their homes to eliminate it, typically about 20%. With a physician mortgage loan, you can avoid PMI altogether, freeing up more of your cash flow to invest in other assets.
Lenient Credit Scores
Another benefit of physician mortgage loans is that they often have more lenient credit scores. Also, debt-to-income ratio requirements are less strict than traditional mortgage loans. This can be especially helpful for physicians who may have high levels of student loan debt or who are just starting their careers and have not had the opportunity to build up a significant credit history. Seriously, if you have a pulse and are a physician you can get one of these loans!
Multiple Ways To Benefit
Finally, physician mortgage loans allow you to finance the purchase of multiple properties, which can be an excellent way to get started in real estate investing. By using a physician mortgage loan to purchase your primary residence, you can free up your savings to invest in other properties or assets. Or pay off your student loans. Or, you can re-use a physician loan to buy another primary residence. Buy one, live in it for a few years, and turn it into a cash-flowing rental. And repeat!
Cons of a Physician Mortgage Loan
I would be remiss if I did not mention that there are some cons to a physician mortgage loan. First higher interest rates. This is Due to the fact that the loan can be a little riskier for the bank since it is 0% down without PMI. This helps the bank offset risk. There is also the risk of negative equity with such a small down payment. Meaning, owing more than the house is worth if the housing market declines.
Conclusion
In conclusion, if you’re a physician with a passion for real estate investing, don’t let high student loan debt and a lack of savings hold you back. The physician mortgage loan is an excellent loan product designed to help you overcome these challenges and achieve your real estate investing goals. With its numerous benefits, including little to no down payment, no PMI, and lenient credit score requirements, the physician mortgage loan can be a powerful tool in your quest for financial freedom.
Let me know your experience with a physician mortgage loan in the comments and share what lenders you have worked with. Would you do me a favor? If you learned something from this will you share it with a friend and invite them to our FB community?