When you become a doctor, you might discover that you've suddenly acquired a new perk that you may not have known even existed: the doctor loan. Doctors are known for having the lowest rate of defaults, so lenders prefer to lend to doctors over those of any other profession. As a result, you may be able to obtain a loan that has several advantages over the loans that are typically offered to other professions.
Principal Mortgage Insurance Isn't Required
You may not need principal mortgage insurance. This insurance program is sometimes required by banks when lending to other types of professionals to safeguard the banks from a default. There is no benefit to carrying this form of insurance since it is expensive and is not tax deductible, so you will simply save money if you're able to avoid it. These insurance policies can be avoided if you make a large down payment, but if you simply don't have the money, you'll benefit from a doctor mortgage.
Student Loans Are Less of a Problem
When you have finished your education, you may find yourself with a considerable number of student loans. Normally, having a large number of student loans might impede on your ability to obtain a mortgage, but you may be able to obtain a doctor's loan even with student loan debts. In many cases, it might even be your only option.
You Can Still Make a Larger Down Payment
A doctor's loan does not require anything down in some cases. Other doctor's loans require you to put 3-5% down. However, you can choose to put down a higher down payment if you wish to save money in the long-term.
You Can Purchase a Home Faster
One of the challenges that other professionals face is that they will often need two years of income before they are able to obtain a mortgage. However, if you're a doctor, you'll be able to move into a home in as little as two months because you'll simply need your employment contract.
Even though a doctor's loan is beneficial, it's important to not make a fast decision that you may later not be happy with. For example, because of how fast you're able to obtain a loan for a house, you may not spend enough time shopping around for homes that you would be happy with. However, after spending enough time searching and performing enough research, you'll be able to make a better decision.
Share18 September 2019
When it comes to borrowing cash for a new house or a nice car, how much money do you really need? Although you might be tempted to mortgage yourself to the brim or borrow a little more than you should, the fact of the matter is that everyone has financial limits. My blog discusses the impact of borrowing more than you need, so that you can make smarter decisions with your money. In addition to keeping you out of trouble, this valuable information might also improve your quality of life and protect your financial future. You never know, it could make all the difference.
