Home Loan Programs: How Recent Medical School Graduates Can Qualify

Graduation is an exciting time for any college graduate, but for those graduating medical school, the excitement is an understatement. For recent medical school graduates who are getting ready for new employment, the idea of looking for a home isn’t exactly easy. But with the help of loan programs specific for medical school graduates, the process becomes a little easier. In Utah, there are lenders ready to help medical school graduates in the country get the financing they need to purchase a home.

Available Options

Today there are mortgage programs tailored specifically for medical school graduates and physicians to meet the needs of doctors who are just starting out in their career. A physician home loan is an excellent option for graduates to obtain a home mortgage. This program typically presents itself with a low down payment of 10 percent or less, with no private mortgage insurance required and 100 percent financing on certain loan amounts. Generally, physician home loans are offered with a 30-year fixed rate, or a five- or seven-year adjustable rate.

Other options for physicians wanting to receive a home loan include: FHA loans, VA loans and conventional mortgages with different down payment rates. A conventional loan with 20 percent down may be a better alternative for home buyers as it offers more options and flexibility, though requires a large sum of money to be put down.

Requirements

Typically, a borrower will be required to provide an employment contract from your practice instead of pay stubs. This can be helpful to doctors who are relocating for their first job after graduation and want to be moved in prior to starting work. Some banks may also a borrower to set up a savings/checking account with their institution prior to creating the loan.

One important aspect to remember about these loans is although they offer many advantages to medical school graduates, they also typically involve a higher interest rate, fees or points.

Should I apply for a home loan during residency?

It is advised to a student in a residency program to wait until the medical student’s program is finished before applying for a home loan because many residents will end up relocating after three to five years when their program finishes, leaving a significant amount of debt to be paid and a home to sell, if needed.

As a medical school graduate, consider the several financing options available prior to purchasing a home of your own for you and your family.