Doctors make an enormous amount of personal sacrifices to become a doctor, and then even more once they practice. Often one of the many challenges doctors face is a high amount of student debt. That can throw off their debt to income ratio (DTI) and make it difficult to qualify for a home loan. Well, Primary Residential Mortgage is here to help! Did you know there are special loan options for doctors, dentists, veterinarians, ophthalmologists, and other types of M.Ds? One of the programs we offer is designed specifically for licensed medical professionals. It can be a valuable tool for helping more people get the home loan they deserve and make their American dream of homeownership a reality.
Higher DTI Financing Available For Licensed Medical Professionals
The main advantage of this specialty program for doctors is that it allows potential buyers to take advantage of more lenient debt-to-income ratio requirements than most conventional loans. Debt-to-income (or DTI) is a significant factor that lenders consider before approving a loan. The number is a reflection of a person’s outgoing monthly debt payments compared to their monthly income. For example, if a person makes $10,000 a month, and their outgoing debt is currently $2,500 in total a month, their DTI is 25%. ($2,500 is 25% of $10,000.) From the lender’s perspective, the lower the DTI, the better in terms of minimizing the risk of default.
For most jumbo loan programs, the maximum DTI is around 43%. If you have a DTI that is higher, it usually causes a higher level of risk, and lenders are unable or unwilling to issue a new home loan. However, with this specialty program, lenders can issue loans to borrowers with higher debt-to-income ratios, sometimes as high as 47%. That may not sound like much. Still, just a few percentage points can be the difference between rejection and acceptance for many aspiring homeowners.
Most medical professionals typically have a lot of student loan debt. However, the program does take this into account and provides a small workaround. With this unique program, any student loan that is deferred for a minimum of 12 months is excluded from your debt-to-income ratio. This can be a significant step to lowering the official DTI that home lenders consider, and could be the difference between qualification and rejection.
Up to 90% Financing Means a Smaller Down Payment
The other highlight of the program for medical professionals is the potential for as much as 90% loan-to-value (LTV) financing. Loan-to-value (LTI) is an expression of the amount of the loan compared to the overall value of the property. For example, if a home is worth $2 million, and the loan is for $1.5 million, then the loan-to-value ratio is 75%. Lenders like to see this ratio as low as possible because it lowers their risk. The closer it gets to 100%, the more hesitant lenders become.
With this program, medical professionals can take out a mortgage loan that is up to 90% of the property value (90% LTV.) This higher LTV allowance makes more purchasing capital available for medical professionals and may result in a larger home, or a house that has more high-end amenities.
Medical Professionals Should Call Primary Residential Mortgage Today
If you’re a medical professional, give Primary Residential Mortgage a call and talk to a loan professional to see if you can qualify for this special home buyer program. What are you waiting for? Call today!
Note: Opinions expressed are solely my own and do not express the views of my employer