1/18/2016
2016 Home Financing for Doctors
This is what you NEED to know
by
Tal Frank
[email protected]
404-321-3931 www.physicianloans.com
What Obstacles Do You Face?
(Can you buy a home?)
Obstacles
• Little/no savings
• Student loan debt
• Low/moderate income
Solutions
100% loan
Up to $20K graduation loan
Not fully included in debt ratio
Low interest rates
• No verifiable income
& no pay stubs
No PMI
• Job starts in July, but
wish to move in June
or earlier
Approval with signed letter of hire
High debt ratios allowed
Close up to 60 days before job starts
Ask questions & take notes
What Mortgage Products Are Out There?
Which is best? Which do you need?
Which do you qualify for?
Physician Loan
Conforming
Portfolio
Fannie Mae
and Freddie Mac
FHA
VA
Government
Insured
Government
Guaranteed
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1/18/2016
What Loan Meets Your Needs?
Needs
100% loan
Special Student loan consideration
Low interest rates
No PMI
High debt ratios allowed
Approval with employment letter
Close 60 days before job starts
The Home Buying Timeline
1.
2.
3.
4.
5.
6.
7.
8.
9.
Select a Loan Officer you trust
Get Pre-Qualified by the Loan Officer
Select a Realtor you trust
Find a home & get under contract
Complete Application / Get LE
Have the home inspected and appraised
Update your loan approval papers
Obtain a CTC (Clear to Close)
Get CD / TRID Waiting Period
DON’T USE A REALTOR JUST BECAUSE…
•
•
•
•
•
•
She is your aunts’ friend.
He’s a buddy of yours from college.
She is the mother of the chief resident where you will be working.
You saw his picture on a sign in front of a home you liked.
She just started in the business and you want to help her out.
This is the realtor you see on the side of every bus in town
Bottom Line
Get the Right Realtor
Get the Right Loan Officer
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1/18/2016
The 3 C’s
Scores
C Redit
720+
Excellent
700 – 680 – 640 –
<640
720
700
680
Very Good
Fair
Good
Poor
Preparing Your Closing Budget
Down Payment
(0% PhysicianLoan, 3.5% FHA, 5% Down Conforming……………
Closing Costs
(Avg. 3% of purchase price – varies by state).……
Escrows
(3 – 6 mos. taxes & insurance)….…………………..
(1 yr. homeowners insurance)….……………………
(Prorated interest from closing date to month-end)..…
$_________
$_________
$_________
$_________
$_________
Sub-Total $_________
Less Earnest Funds $_________
TOTAL Funds at Closing $_________
DEBT RATIO
Determines How Much You Can Afford
How Are Student Loans Counted?
Total Debt Total Monthly Debt Payments
=
Ratio
Monthly Gross Income
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1/18/2016
How Debt Ratios Are Used
Conforming
Physician Loan
FHA
36%-41%
41%
50%
28% = $1,167
36% = $1,500
$50K or
$4,167/mo.
41% = $1,708
50% = $2,083
What If My DTI is Too High?
• Arrange for a Gift from Family
Your loan must allow for gift funds
(to pay off consumer debt)
Discuss with your LO as this requires proper paper trail
• Apply for a Graduation Loan
(to pay off consumer debt)
No Payments for 3 years
Must apply and get approved prior to graduation
The House You Buy
Depends on your DTI & PITI
$220,000 Purchase Price (assumes 5/1 ARM @ 3.75%)
P&I = $1,018
Taxes = $175
Insurance ( Home Owners) = $100
Total PITI = $1,293
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1/18/2016
The House You Buy
Depends on your DTI & PITI
5 Year ARM at 3.75%
30 Year Fixed at 4.125%
30 Yr Fixed at 4.125%
0% Down PhysicianLoan
20% Down Conforming
5% Down FHA
P&I = $1,018
Taxes = $175
Insurance = $100
P&I = $852
Taxes = $175
Insurance = $100
P&I = $1,013
Taxes = $175
Insurance = $100
PMI = $145
PITI = $1,293
($0 Down)
PITI = $1,127
($44K down)
PITI = $1,433
($11K Down)
The 3 C’s
C ollateral
Reasons
to Hold Off
Reasons
to Buy
1. Rent = House Payment
2. Prices Stable or
Appreciating
3. > 3 Year Stay
1. You Don’t Qualify
2. < 3 Year Stay
3. Values Depreciating
The Buy vs. Rent Decision
The Five Seven Decision Factors:
Match City
Risk
Tolerance
Lifestyle
Tax Deduction
Appreciation
Reserves
Timeline/
Length of
Residency
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1/18/2016
Another Example…
Benefits of a $220,000 House Held for 4 Years:
Rent Payments =
PITI =
Equity =
Tax Advantage =
Appreciation (at 2%)
$48,000
$62,064
- $17,000
- $7,800
- $18,000
$1,000/mo.
$1,293/mo
TOTAL = $19,264
Difference of $28,736
Tips to Avoid Hassle and Extra Fees
Avoid companies that market to physicians but do not have a
Physician Loan. Read website carefully for clues. Many will market
FHA loans to you.
Do not open or close any credit accounts before checking with your
loan officer
Avoid major purchases prior to buying a home
Email or Call with Any Questions!
Tal Frank
[email protected]
404-321-3931
www.physicianloans.com
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