Medical mortgage loans can be 100% loans that require no Premium Mortgage Insurance (PMI), but you need to know the details of this loan before taking the plunge.
Medical mortgage loans are very specialized and require a loan officer with the knowledge of them who will guide you step by step. With many years of servicing these loans, Valerie Leonard with First Citizens Bank offers her knowledge to help you through the process.
According to Valerie, there five key things to know before you embark on this journey.
1 – Establish Credit
If you haven’t already, you need to work on establishing a 12-month credit history. Valerie suggests getting one or two credit cards and paying them off each month to help you establish a payment history.
2 – Student loan debt considerations
Anyone who has been through medical school knows it is easy to rack up student loans and during your schooling and training, it can be difficult to pay these off right away. With a medical mortgage, the underwriting is very flexible around student loan payments that are deferred or in an income-based repayment. Your loan officer can look at your individual situation and advise you on how the student loans will be treated. If now is the time to take the leap into home ownership, make sure you have all your loan documents at the ready, even if you’re in forbearance or signing up for income based repayment or continued post grace.
3 – No job, no problem…well sort of
You do not have to have started your job to qualify for the medical loan, however, you must have a contract for work signed and available to give Valerie at the time you apply. In addition, you will need to provide all contract documents and compensation plans.
4 – Document, Document, Document
It is super important that if you plan to apply for a medical mortgage, you keep really good financial records. Have documentation for every bill you have paid since you’ve been in school and beyond. If you are renting with friends, make sure you pay your landlord your portion directly and get paper or digital receipts. You will need to show your on time payment history at the beginning of the medical mortgage loan process.
5 – Medical School Transcripts
If you have been a resident for less than two years, be sure you hang on to those transcripts. Even if they are not official, you will need to provide those to Valerie.
Things to Consider
- If you’re just coming out of residency, this home does not have to be your dream home. Keep an eye on the bigger picture. Buy what you can afford now and consider using it as a rental down the road when you can afford that dream home. The good news is you can have two active medical mortgage loans at any given time.
- When shopping for a home to purchase, remember that medical mortgages can apply to single family homes, townhomes, or condos. However, if you’re searching for a condo, keep in mind that there are many requirements around the entire condo project and insurance coverages. That’s where having a knowledgeable Realtor like April Osborne will work in your favor because she can make sure you’re looking in all the right places.
In additional to working with the right Realtor, if you’re considering a medical mortgage loan, working with the right loan officer is a must, because medical mortgage loans are different from regular mortgage loans. Valerie Leonard with First Citizens specializes in medical mortgage loans. She knows the guidelines word for word and can keep you on the right track throughout the entire process.
