If you are a healthcare professional, then you may be able to apply for a physician mortgage loan. These are types of loans given exclusively to people who work in healthcare. More often than not, these loans discount and ignore high student debt (which is typical among physicians and other healthcare workers) and make it a lot easier for them to get a mortgage, even if they don’t have a lot of savings.
If you work in healthcare and are considering taking out such a loan, then this post will tell you about their pros and cons.
Pro – No Deposit
One of the greatest advantages of a physician mortgage is that there’s no deposit requirement. With nearly every other type of mortgage, borrowers are required to put down a sizable deposit, usually around 10-15% of the value of the house that they are buying. If they are unable to produce such a deposit, they cannot borrow. With physician mortgages, however, because there are no deposit requirements, individuals are able to borrow a lot more than they normally would and get a house that’s more suited to them (and potentially their growing family). Essentially, this type of mortgage allows people to buy their forever home when they are still young, instead of having to build their way up the property ladder.
Pro – Easier Qualification
It’s a lot easier to qualify for a physician mortgage than for an ordinary one, since there are fewer requirements. This is, according to the specialists in such mortgages from Physician Banks, in order to help those in medical professions to buy a house. Medical professionals are key workers. If they are not able to get houses, then they could look for other work. A lack of medical workers would be detrimental to our society, especially since it is growing, and the demand for medical workers is growing along with it. However, despite being easier to qualify for, these mortgages do have higher credit requirements.
Pro – Larger Mortgage
If you want to take out one of these mortgages, then you will be pleased to know that you will be able to borrow a lot more than you ordinarily would with them. These mortgages aren’t that dependent on the amount of money that you earn. This means that even people who don’t earn a lot can buy a house that’s large enough for them and their families. These mortgages, as mentioned previously, give people the opportunity to buy forever homes, meaning that they don’t have to spend the rest of their lives climbing the property ladder, buying and selling, just to get the perfect house.
Con – Unaffordable Mortgages
Unfortunately, because these mortgages give people the ability to borrow more than they can actually afford to, it often leads to people making very bad decisions and buying houses that are massively outside their budgets. These mortgages, sometimes, become very unaffordable, and then, lead to people defaulting or losing their houses. Also, because many of the people who take out these mortgages have absolutely no savings whatsoever, even a brief period out of work can mean that they aren’t have to miss payments.
Con – Student Loan Repayments
Student loan repayments aren’t cheap. They are calculated according to the amount of money that you earn each year. If you earn a lot, then you will have to pay very high student loan repayments. Something that a lot of people do when they are taking out a physician mortgage is to forget about their repayments. Forgetting about the amount of money that you will have to repay for your student loan could lead to you taking out a mortgage that is only just affordable, which will then become unaffordable when you have to begin repaying your student loan. As long as you bear your student loan in mind, however, it shouldn’t be a problem for you.
Con – High Credit Requirements
Something else that’s not that great about these loans is that they have high credit requirements, meaning that you have to have a near-perfect credit score in order to qualify for them. A lot of people today, unfortunately, don’t have perfect credit scores. This is mainly due to the fact that people are encouraged to take out credit at every opportunity. Most people have credit cards, contract phones, and sizable debts, before they even reach the age of 21.
Physician mortgage loans can be very helpful, as long as they’re used properly. If you are planning on taking one out, then make sure that you consider all of the things outlined here in this post. Failing to do so could lead to you getting into unaffordable debt.