Getting a home loan these days

[Cumberland]

I am reading everywhere that you need 20% down to get a home loan these days, or if you qualify for putting down less, then you have to pay 1-2 points plus a higher interest rate. I am wondering, how do the common folk like us who are finishing years of training, have no down payment, tons of loans and in our case, watched the equity in our home that was supposed to be the down payment on the next place disappear? Is anyone qualifying for physician loans these days, and are they any good?

[SuzySunshine]

Re: Getting a home loan these days

My sister and BIL just went through this, they just bought their 3rd house (not at the same time) and the bank wanted 20% no exceptions, they had the money but really wanted to put less down so they found a different option but yes the bank they'd had both their other mortgages with was very strict with them.

We have several friends finishing this year that are renting while they build. They can get a construction loan that way which means they don't actually start paying it back until they move in and by then they'll have a much larger down payment.

Re: Getting a home loan these days

At the beginning of residency we bought our first house. If I remember right, we went with a physician loan and didn't have to have 20% down. I don't remember our interest rate, but I know it wasn't bad. Our loan was through Bank of America. That was four years ago, so I guess you'd have to call and see what the options are now.

Re: Getting a home loan these days

We have several friends finishing this year that are renting while they build. They can get a construction loan that way which means they don't actually start paying it back until they move in and by then they'll have a much larger down payment.

While the mortgage market has gotten tighter over the past year, I'm sure things are going to get even trickier w/the current situation. My guess is that there will still be "special" loans available, but you'll really have to dig for them, and will probably come at a premium. DH was contacted this week about a job that would certianly mean relocation .... and we emphatically said NOT INTERESTED.

[rockgirl]

Re: Getting a home loan these days

we used the bank of america physicians loan and it has worked out exceptionally for us. no money down and no PMI. I ditto the calling around thing. It never hurts to shop around. BOA also approved us for way more than we could handle as far as a mortgage. We closed in february.. not sure how things have changed since then.

Had we been in the position of not being able to purchase our home, financially we would be more stable right now. increases in utilities on top of general maintenance and upkeep have cost us way more than we anticipated. Hopefully in a few years when we sell everything will work out to our benefit.

[Cumberland]

Re: Getting a home loan these days

I am fairly certain that the BoA physicians loan with nothing down and no PMI is a thing of the past. We got a similar loan during residency, but with the mortgage crisis those loans are gone. I was more wondering about what is going on since the change.

Re: Getting a home loan these days

Here is an article on changes in getting a mortgage:

http://www.smartmoney.com/consumer/inde ... es&pgnum=1

It is from March 2008.

[houseelf]

Re: Getting a home loan these days

It makes me sad that the zero down/no PMI loans may not be available for future generations of resident families. In our case, this was they only way we could afford our first home and it turned out to be a solid investment.

I can also tell you that there is no way that we will be able to come up with 20% plus closing costs for an attending house come this July. Renting would be a big step backwards for us. :|

Kelly

[Vanquisher]

Re: Getting a home loan these days

It makes me sad that the zero down/no PMI loans may not be available for future generations of resident families. In our case, this was they only way we could afford our first home and it turned out to be a solid investment.

I can also tell you that there is no way that we will be able to come up with 20% plus closing costs for an attending house come this July. Renting would be a big step backwards for us. :|

Kelly

This is us too, and I am scared! To come up with 20% down will take a long, long time. Ugh.

[DCJenn]

Re: Getting a home loan these days

We have second mortgages to cover the down payments. Banks may be less likely to do this these days but it's worked well for us. The DC house is a huge PITA and that loan will have to be refinanced next summer but eh, what can we do? I'm not selling it anytime soon, as it is still increasing in value, albeit much more slowly. (we haven't lost anything yet!)

Jenn

[Vishenka69]

Re: Getting a home loan these days

It took us a solid year to save up 20% but our student debt is much less than average (under $100K). I'm glad we didn't buy right away because the houses in our area have come down significantly and we can do a lot better now. I don't know if rushing to buy is always the best option.

[moonlight]

Re: Getting a home loan these days

It took us a solid year to save up 20% but our student debt is much less than average (under $100K). I'm glad we didn't buy right away because the houses in our area have come down significantly and we can do a lot better now. I don't know if rushing to buy is always the best option.

I'm so glad to hear someone say this!! We start residency next year and I'm getting more and more set on the idea that we'll rent. We are not willing to burden ourself with something we can not afford. And we feel more and more strongly that we want to move back home, where we don't have residency options at this time. It's been great seeing the country (and the world for that matter) but for us there is no place like home.

Did anyone see Suzie Orman on Oprah last week? It’s going to be very hard for anyone to get credit according to her, for the next couple of years. We’ve even had large car dealerships go out of business in the past week because they can’t provide enough auto lending to sell the cars. Anyone want a car loan with 24% interest? I'm afraid that's whats about to happen. Scaaaary stuff.

[peggyfromwastate]

Re: Getting a home loan these days

Old topic, but I just wanted to add that DH has been calling around for 80-10-10 financing (where 10% is from a cash downpayment and 10% from a Home Equity Line of Credit-- aka a second mortgage on the prop you're buying) and they no longer do this. This was the loan type we used for our 1st mortgage 5 years ago.

This leaves us with the VA loan or paying a PMI-- it is a MUCH tighter market now. We didn't call BankofAmerica about the physician loans yet...

[houseelf]

Re: Getting a home loan these days

Acquiring a homeloan is something we have been very vocal about on the interview trail. In order for us to move to X city and take your job, the benefit package is going to need some sort of hospital backed guarantee that we can attain a mortgage loan. Under previous circumstances, this wouldn't have been such a BFD. We enjoy good credit and have successfully managed two mortgages in the past. But we have some serious student loan debt and a medium pile of credit card debt. The fellow from this program last year received this type of benefit when he took a position at Harvard, which apparently is a standard practice for attendings there. I think that many more hospitals are going to have to offer this benefit in order to recruit. I'm sure that this benefit is somewhat specialty dependent, but if they want someone bad enough, the hospital should be able to make this happen. :huh:

Kelly

[spotty_dog]

Re: Getting a home loan these days

I've got an email in to a BoA guy who specializes in physician loans. His computer is down this week so we'll be running the numbers next week, I'll let you know what I hear. I've also got a call in to SunTrust for a physician loan program, though they were supposed to get back to me within 24 hours and didn't. :huh:

We've pre-qualified with two banks so far and anticipate no problems getting a pre-approval (with 5% down and paying PMI.) One, a credit union, worked with us to create a loan structure that fit our budget and got us the most house for our payment. The other, a small bank, was REALLY hesitant to talk to me about loan amounts above the federal conforming limit. I guess in the post-fiasco world, mortgage insurance is really hard to acquire on those larger loans if you don't have at least 10% to put down; however he did suggest that a 90-10 would get around that problem, and didn't imply that getting the second mortgage would be an issue. :huh: