Specialized Financing - 4 Things to Consider When Applying for a Doctor Loan in Florida
by Donny Mak
on Thursday, September 25th, 2014 at 1:00am.
This article was contributed by Bloom Realty guest blogger, Joshua Feldman, SunTrust Mortgage.
The Feldman-Deas Team with SunTrust Mortgage specializes in loans for doctors, dentists, and orthodontists.
It’s amazing to think that through college, med school, residencies, internships, and fellowships, many doctors end up spending 10-15 years training. With that amount of education and training, all doctors will definitely be experts in their respective fields - and they need a mortgage lender who is an expert in doctor loans. There are a lot of options out there for physicians, but there are several important things to consider when choosing the right lender.
1. Doctor Loan or Marketing Gimmick?
There are a lot of "doctor loans" out there that, really, aren't all that different from other options. Some require 5% or 10% down -- which can often be done through other conventional loan options available to many borrowers with good credit (financed and lender-paid MI could be used to eliminate the monthly mortgage insurance). Other "doctor loans" are really "private bank client" loans that would be available to doctors and non-doctors alike. That's not to say that they may not be good loan options, but they're not really "doctor loans." Make sure the "doctor loan" you seek is truly a benefit that isn't available under another name. If it's a higher loan-to-value than otherwise available, and there is truly no MI, it's likely a true physician loan.
2. How Broad is the Term "Doctor" in the Doctor Loan?
Some banks have doctor loans that are only available to medical doctors, dentists, and orthodontists. Others expand this to Doctors of Physical Therapy, Optometrists, Veterinarians, and more. Of course, if you're a DPT, Optometrist, or Vet, this is great! If you're an medical doctor or dentist, it's likely that the bank that focuses on the smaller applicant pool may be a better choice. Why? First, because they are focusing on your specific profession, so they likely understand your needs better. Second, if the other bank lends to an expanded pool of applicants, there is likely higher default risk on that loan type for the bank - now, that's not to say that Physical Therapists, Optometrists, and Veterinarians can't be trusted to pay their mortgage. But, expanding to other fields and lending to a larger applicant base likely has an adverse effect on pricing - meaning if they're lending to more types of doctors, the rate for everyone might be a little bit higher.
3. Consider Your Contact
It's easy to Google "Doctor Loan Florida" or “Doctor Loan FL” and find a lot of different results - both services that match doctors with lenders and banks that lend directly to doctors. Are you working with an individual who refers you to a loan officer? Are you calling an 800 number for a large institution that has physician loans? Or -- are you calling a loan officer directly who works with the loan and clientele each and every day? Don’t be afraid of using a lender who isn’t local – knowing the loan program is paramount. Your real estate agent knows the market – your doctor loan specialist knows the loan!
4. Consider Your Contact (Again)
Once you're speaking with your loan officer, ask why you should choose them. Do they have a history of working with doctors? How many physician loans have they done? Do they have testimonials from other doctors they have assisted? These are important things to consider. The important thing to establish is whether the loan officer truly has expertise in this area or if they just happen to work for a bank that offers a program.
Now That You Know What To Consider, Are You Looking For A Doctor Loan Specialist?
The Feldman-Deas Team, consisting of Josh Feldman and Jules Deas, with SunTrust Mortgage is one group that specializes in loans for doctors, dentists, and orthodontists. The Doctor Loan/Physician Loan Program features a variety of fixed and adjustable-rate mortgages with up to 100 percent financing and no monthly mortgage insurance payments. As Doctor Loan Specialists, The Feldman-Deas Team has closed in excess of 200 Million Dollars in mortgage loans for Physicians alone. The team focuses on treating each client as if he or she were their only client. As a result of this service-oriented approach, the team closed more loans in 2013 than any other team in SunTrust, and are perennial recipients of the Chairman's Award and Platinum Award, which are given to the top 5% of SunTrust Mortgage loan officers.
For Licensed Residents/Interns/Fellows in MD and DO programs:
Maximum of 100 percent financing for purchases and rate/term refinances
There is a maximum loan amount of $650,000
For Practicing Doctors (MD, DO, DDS, DMD):
100% financing for loans up to $650,000
95% financing for loans up to $1 Million
90% financing for loans up to $1.5 Million
Please note: Doctors with over ten years post residency experience are limited to maximum 90 percent financing. These Doctors need to be members of SunTrust Private Wealth Management or belong to a practice that is part of SunTrust Private Wealth Management to be eligible for this product. Subsequent time spent as a teaching attending or in a fellowship program doesn’t count in this ten year period.
What you'll need to consider:
Loans are available in select states (AL,AR, DE, FL, GA, MD, MS, NC, SC, TN, VA, WV, DC and select counties in PA)
State law may put further restrictions on maximum loan-to-value ratio
Adjustable-rate mortgages have interest rates that may increase during the life of the loan
100 percent mortgage financing will result in no property equity until the borrower pays down the loan principal through regular mortgage payments and/or the property value appreciates
A down payment may be required if the property is located in a declining market
Available only in AL, AR, DE, FL, GA, MD, MS, NC, SC, TN, VA, WV, DC and select counties in PA to Residents, Interns, Fellows, Doctors of Osteopathy (DO), Medical Doctors (MD), Doctors of Dental Medicine (DDS, DMD), or licensed medical professionals that have completed their initial residency within the last 10 years. Doctors with over ten years post residency need to be members of SunTrust Private Wealth Management (PWM) or belong to a practice that is part of PWM to be eligible for this product.
Borrowers should note that 100% mortgage financing will result in no property equity until such time as the loan principal is paid down through regular mortgage payments and/or the property value appreciates. Additionally, if property values decline you could owe more than your property’s value. A down payment may be required if the property is located in a declining market. Subject to state limitations.
Subsequent time spent as a teaching attending or in a fellowship program doesn’t count in this ten year period. If funds from an employer recruitment loan are being used by the borrower, the maximum LTV/TLTV/HLTV is 95%. Gifts are allowed from immediate family members, (parents, grandparents, in-laws, siblings, spouse, children, grandchildren, adopted family members) and can be used for closing costs, prepaids and reserve requirements.