Like many things, physician loans are not one-size-fits-all. They come in different varieties with different nuances. Additionally, not all mortgage lenders offer this type of loan.
The following case study offers an example of the potential benefits of securing a physician mortgage loan, showcasing how this specialized financing option can meet the unique needs of some medical professionals.
Physician mortgage loans offer a unique financial solution tailored to the needs of medical professionals. They allow them to overcome common barriers, like student loan debt and limited savings, to homeownership early in their careers.
These specialized loans recognize future earning potential and often offer more flexible terms than traditional mortgages. Physician mortgage loans are typically available to medical doctors, dentists, veterinarians, and sometimes other high-paying professionals.
To illustrate the real-world impact of these loans, let’s examine the case of our clients, a cardiology resident and her spouse, navigating the path to purchasing their first home.
Our clients — a cardiology resident and her spouse — wanted to purchase a townhouse valued at $600,000. Their combined income equaled $150,000 annually, and their cash reserves were $20,000.
They had other savings in the form of individual stock valued at $400,000, inherited from a grandparent many years ago. Therefore, the stock had $150,000 of unrealized gain.
After speaking to their local credit union, the clients determined that their only option was to find a way to come up with a 10% down payment ($60,000), and they would finance the remaining portion of the purchase price with the credit union.
After our discussion, we advised the clients of three possible solutions to meet their needs.
Upon receiving the mortgage broker introduction from our team to a local lender, the client was offered 100% financing for the purchase of their new home.
Based on the zip code of the new home, the bank offered a special $20,000 credit. Our clients could use this credit toward closing costs, a down payment, or receive it as a refund after closing.
Collaborating with a financial planner allowed the client to:
Physician loans can be a good option for physicians, dentists, and other early-career professionals who qualify. However, it’s essential to explore a variety of financing options to ensure you find the one that best fits your unique needs as you purchase a home.
If you're considering purchasing a home with a physician mortgage loan, you should take the time to speak with your financial planner and loan officer to help explore all of your options. Working together, you can review your homeownership goals and determine which mortgage best suits your unique financial needs.
This case study is for illustrative purposes only and is not a prediction or guarantee of actual results. Individual outcomes will vary. Any discussion of taxes is for general information purposes only, does not purport to be complete or cover every situation, and should not be construed as legal, tax, or accounting advice. Clients should confer with their qualified legal, tax, and accounting advisors as appropriate.
CRN202712-7715235
Jordan Bilodeau, CFP®, CEPA, is the Director of Planning & Strategy at Spaugh Dameron Tenny, where he leads firmwide planning initiatives and helps clients navigate complex financial decisions. With experience in portfolio design, tax strategies, and business succession planning, Jordan works with executives, physicians, dentists, and successful retirees to coordinate every aspect of their financial lives. He holds both the CERTIFIED FINANCIAL PLANNER® and Certified Exit Planning Advisor designations and has a Master’s degree in Wealth and Trust Management, providing tailored guidance for clients.
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