It’s that time of year again when medical school graduates all over the country wait anxiously to find out what city they will spend the next several years of their lives in. For a lot of these medical students, this is the first opportunity for them to buy a home and they have already started doing research to see what is required to do so. The majority of first time homebuyer loans that are offered by all banks have different variations of mortgage insurance (monthly insurance the borrower pays to cover the banks risk) and a minimum down payment. FHA loans for example require a 3.5%-5% down payment. Most banks, credit unions, and mortgage brokers do not offer a special Doctor’s Loan and if by chance they do, you might get a loan officer that has never originated one.
You might be wondering what you can do while you wait for the news of your match. Before you put the deposit down on that well deserved cruise or sign the paperwork for that new car, you might want think about how this will affect your credit. All doctor loans will have a minimum credit score needed to do a 100% financing and things like high balance to limit ratios can bring your score way down as will new inquiries for credit cards or car loans. A goal you should shoot for is to keep all of the balances on your credit card statements below 30% of the available limit. Consider those accounts “A+’s” on your credit “report card.” Accounts carrying a 55% balance to limit ratio would be considered a “C-“. Another aspect to keep in mind is your debt to income ratio, which is the amount of your monthly debt (credit cards, cars, and the new house payments) divided by your new monthly income. Believe it or not, a new car payment could lower the amount of house you can afford by more than $100,000! I hope this gives you something to think about and I hope you get the “MATCH” you want!
