Can you anticipate higher fees and closing costs with a physician loan compared to a typical conventional or FHA loan? The answer is…it depends.
There are a lot of different physician home loan products out there, and different banks all have different fee structures. On average, physician home loans will typically have a slightly higher interest rate – we usually see between .125% and .25% depending on the market – and slightly higher closing costs. This is usually because of the higher loan amounts and lower down payments that physician mortgage borrowers often require.
However, in exchange for this slightly higher fee structure, a physician home loan program is going to give you several benefits not available with a conventional loan:
- Much more liberal underwriting guidelines when it comes to income and debt structure
- The ability to close before starting a new position
- The ability to qualify with self-employed or 1099 income without two years’ worth of tax returns (guaranteed salary or hourly rate and a stated number of hours to be worked is acceptable)
- Flexibility with student loan debt
- The option to avoid mortgage insurance
There are many perks to choosing a physician home loan over a conventional mortgage. Fees and interest rate may be slightly higher (not always), but for physicians who have complicated income and debt structures or who have unconventional closing timelines, the pros often outweigh the cons.
In order to decide if a physician home loan is the best option for you, it’s important to meet with a physician-focused mortgage advisor. A mortgage advisor who has experience working with physicians will be aware of the problems that can arise when buying a home as a physician, and they will know what questions to ask in order to build the best mortgage strategy for YOU – one that meets your expectations and will help you build wealth.
If you would like to meet with a physician-focused mortgage advisor and learn more about the costs associated with a physician home loan, fill out the form below. We look forward to working with you!