It takes hard work, perseverance and determination to make it through med school. Residency takes another toll, both physically and mentally. As a doctor, you also need the compassion and skills to help people day in and day out.
The good news is that your sacrifice and dedication don’t go unnoticed or unrewarded. One really nice tool available to you is something known as a “physician loan.” This is a way for doctors (residents and attendings) to buy a home with favorable terms without requiring mortgage protection insurance. Lenders realize that you are a good future risk since your profession is pretty much recession-proof. Your potential earnings are stable as well. Lenders also realize that you have student loan debt and, if you are just starting a residency, you might not have as much of a down payment as they normally like to see.
What all this boils down to is that if you have a good credit score, chances are very good you can get the house of your dreams. Now you just need to know the kind of house you can get.
Physician Loan Restrictions
While each lender will have different terms and restrictions, one that seems to be universal is the residency requirement. This has nothing to do with your medical residency — it has to do with where you will reside. In order to get a physician or doctor loan, you must live in the property. You can purchase a single-family home or a condominium, or even a multi-unit property with up to four units, as long as you live in one of the units.
You CAN’T use this type of loan for a vacation property or a second home somewhere. The property purchasedmust be your primary residence.
So, which type of property is best for you?
These are probably the most commonly purchased properties for doctors, especially those with families. These homes give you privacy and space, with a possible yard for entertaining, raising kids and chasing the dog. After years of college dorms, med school housing and cheap apartments while you work through your residency, a home of your own with a nice plot of land is a really nice change.
Some possible drawbacks of this type of property (depending on your preferences) are that you are responsible for the yard work and maintaining the exterior of the home.
If you prefer a more urban setting with less maintenance and upkeep, a condo might be more your style. These come in a variety of shapes and sizes, from urban contemporary to traditional apartment-style units. Converted warehouses are very popular with their exposed brick walls and gleaming ductwork accents combined with the latest modern features. Condos are also popular for their community amenities like gyms, pools, entertaining areas and more.
A couple of downsides to condo living are that you don’t always have the privacy a single-family home offers, and you are also subject to the rules and regulations of the condo association.
The beauty of buying a multi-unit property is that it acts as an investment, as well as giving you a place to live. You can actually make money from this purchase. For example, if you buy a four-suite apartment building (remember, four units is the max on a doctor loan) and live in one of them (that pesky residency requirement), you can rent out the other three units and get income from them. Depending on your payments and other expenses, those three rent checks each month could cover all or more of your mortgage payments.
The con to this kind of property is that you will be the landlord responsible for repairs and maintenance of the units, inside and out.
The Bottom Line
Being a doctor comes with great responsibility and often a huge student loan debt. Isn’t it time you took advantage of one of the best perks offered just to doctors? When you are ready to start looking for a home, contact us at Curbside Real Estate. We will help walk you through the entire process, start to finish.