Dentist Home Loans

Through our experience working with thousands of dentist and other medical professionals we have gained a deep understanding of the unique challenges you will likely face while getting a home loan. We are here for any question you may have!

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Fairway Independent Mortgage Corporation

Have You Considered A Dentist Home Loan?

If you are like many of our clients, you might have heard of a physician home loan or doctor mortgage before.  You may be curious if a similar type loan is available to you.

You may also be aware that your student loans, the need to close based on an a new employment contract before you have pay-stubs, or your desire to put less than twenty percent down without paying monthly private mortgage insurance, can be a challenge (or impossible) with conventional financing.

In this short article, I will explain the advantages of a Dentist home loan and why you should consider it as your financing vehicle of choice whether you are buying or refinancing a home.

Despite your high income, Dentists can face significant challenges when seeking mortgage financing.  This should come as no surprise as most Dentists have a negative net worth early in their careers, as student loan debt typically exceeds assets by a magnitude of several fold.

To solve for these challenges, the Dentist home loan was created to help overcome most of the challenges you will face when trying to qualify for a home loan.

There are five primary benefits to a Dentist home loan that you should understand:

            
1. You can typically put as little as three to five percent down payment and still avoid monthly mortgage insurance. With FHA and conventional loans, you will typically pay a monthly mortgage insurance premium that can cost you thousands or even tens of thousands of dollars over the life of the loan.  Mortgage insurance is a forced insurance the bank requires you to pay when putting less than twenty percent down.  This insurance typically does not come off for about ten years (if ever as some FHA loans require the insurance for the life of the loan), which significantly adds to the cost of conventional and FHA financing.

            
2. If you are taking a new position with a valid offer letter or employment contract, you can close on your new home purchase up to ninety days prior to the start of employment. This allows you more flexibility in the timing of your home purchase and plenty of time to get settled into your new home before starting your new position.

No two employment contracts or offer letters are created equal.  When trying to qualify for a Dentist home loan with an employment agreement versus actual on the job paystubs, I recommend you insist your employment agreement is not only reviewed by the loan officer but also reviewed and approved by the underwriter.

Mortgage loan officers are prone to saying yes, while mortgage underwriters are more prone to saying no, especially if something does not fit exactly in the box.  Truly the mortgage underwriter is the gatekeeper of the mortgage transaction, they are risk control for the bank and they are literally paid to say no if certain risk factors are present.

            
3. Most FHA or conventional loans look at your student loans differently than can make it hard for Dentists to qualify. Even if you are currently in a deferral or income driven repayment status, most FHA and conventional loans will default you to a fully amortizing payment.  Typically FHA and conventional underwriters calculate of monthly payment equal to one percent of your outstanding student loan balance, regardless of deferral or income based status.  If you have a hundred thousand of student debt with an income driven payment of two hundred dollars, underwriting is going to apply the one percent rule and calculate that payment at a thousand dollars a month.  Alternatively, the Dentist home loan allows you to use your current or an estimated income driven repayment amount to qualify, making it much easier for you to qualify for the home you really want.

            
4. A Dentist home loan can help you qualify for higher loan amounts that exceed conventional or FHA loan limits. Typically loan amounts over $453,100 are considered jumbo loan amounts and require twenty percent down payments.  A Dentist home loan can help you finance jumbo loan amounts with as little as five percent down and without costly monthly mortgage insurance.

            
5. Many Dentists are paid in unusual ways, which can present challenges for conventional and FHA financing. With a conventional loan, underwriting is required to document stable and consistent income, they do best with straight salary or hourly employees.  If for any reason your pay has inconsistencies or if you have multiple source of income, FHA and conventional underwriters can struggle to approve your loan.  The Dentist home loan was created to help overcome income challenges and the underwriting guidelines are much more flexible in regards to what type of income can be used to qualify.

What other challenges are you likely to face when seeking to buy a home?

Demand for housing nationwide has exceeded new home construction for nearly a decade.  This has caused fierce competition in many areas of the country for housing, with multiple offers and rapid appreciation the norm in many housing markets nationwide.

As you can see, housing inventory remains very low as I write this article in 2018 and we see few signs that the supply of new homes will exceed demand anytime soon.  While this can be a challenge and even frustrating to many clients, it also tells us that housing is on a solid foundation.

The economy is growing, unemployment is low and going lower, wages for most Americans are going up, and all of this points to solid demand for housing going forward.  Econ 101 taught us that when demand exceeds supply, prices will increase.  As you can see from the graph above, home builders have not yet building homes at the pace they were going back to 1995 and until they ramp up new construction to fill the gap, home prices are likely to move higher.

So how do you compete with multiple buyers, many of which are making all cash offers? 

We’ve created a system to help our Dentist client’s offers get accepted.  Unlike most banks, we don’t simply pre-approve you, we actually gather all of your documentation up front and have it reviewed by our in house underwriters.  Once reviewed and approved, we can close in as little as seventeen days in most cases.

We couple this incredibly fast closing time with a solid credit and income approval letter and we even go so far as making a call to the listing agent of the home you are offering on, to confirm that your loan is not just pre-approved, but it has literally be reviewed and conditionally approved by underwriting.

Many times we can close as fast as a cash offer and before the seller needs to make their next monthly mortgage payment.  In a competitive market, the buyer with the strongest approval letter and the quickest close often times wins!

Click here to learn more about Dentist Home Loans https://fairwaydentisthomeloans.com/

Josh Mettle NMLS #219996 is an industry leading author and mortgage lender, specializing in financing physicians, dentists, CRNA, and physician assistants.  You can get more great physician real estate and mortgage advice here or his by visiting his book site.  Josh is also a fourth generation real estate investor, and owns a number of rental homes, apartment units and mortgages.  Josh is dedicated to helping physicians become more financially aware and able; listen to “Physician Financial Success” podcast episodes or download Josh’s latest tips and advice here.

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