Young doctors with mountains of school debt already coping with workplace stress feel even more stress about the daunting challenge of buying a new home than the average consumer.
If you’re looking to buy a home, you may be wondering how your student loan debt could impact those plans. Do you have to wait until you’ve paid off your student loans before you can buy your first home? Or could you qualify for a home loan with that debt?
Difficult Homebuying Conditions For Young Doctors
In December, President Biden extended for a final time the pause on student loan repayments to the end of May 2022. The ending of this freeze will hit most medical school graduates hard and complicate their dreams of homeownership.
Of the almost 20,000 US medical school graduates in 2019, 73% carried debt, according to the Association of American Medical Colleges’ most recent data. The median debt for indebted graduates then amounted to $200,000.
This news comes at a time when the average sales price for an existing home in the United States is $401,800 – an almost prohibitive level for many first-time homebuyers with substantial debt. High demand at the upper end of the market and limited supply in the lower end are continuing to bolster prices and make matters worse.
The Solution? A Physician Mortgage Loan
Through their extended education programs, physicians often accumulate too much debt relative to their income and have too little opportunity to build up their credit to qualify for a standard mortgage.
Luckily, there are specialized mortgage products designed to address physicians’ specific circumstances.
The Physician Lending team at NEO Home Loans has been able to find ways to fit an affordable mortgage into the lives of doctors who have complicated income structures and balance sheets. These unique mortgage programs enable young doctors to secure mortgages with little-to-no down payment. These products also have more flexible debt-to-income qualifications than many conventional mortgages and offer 100 percent financing with no private mortgage insurance.
Here are some of the benefits of our physician mortgage loans:
- 100% financing up to $1M
- 95% financing up to $2M
- 2-unit properties available
- Gift funds acceptable
- Qualify as an independent contractor without two-year employment history
- Can close prior to employment start date
- Flexible with student loan debt
- Available to J-1 visa holders
- Available to Physicians, PA, OD, DPT, DMD, DVM, DDS, and others
The Bottom Line
NEO Home Loans’ physician mortgage programs consider young physicians’ unique financial situations, including higher debt-to-income ratios and limited earnings and credit histories. Our team of mortgage advisors have years of experience in educating this physicians on these loans and the mortgage process as a whole, as well as providing more holistic financial advice that helps young physicians afford payments over the life of their mortgages.
In this complicated housing market, it is so important for you to work with a mortgage advisor you can trust. Even after you close on your home loan, our Physician Lending team will continue to calculate your financial health accurately to ensure your mortgage is sustainable over the long term.
You have sacrificed a lot to learn and master your profession and serve society, and your ambition for owning a home shouldn’t be sacrificed along the way. Let us help you find an innovative and sustainable solution for your dream of homeownership.