When Dr. William Ngo was shopping for his first home two years ago, he ran into a problem: He got rejected for a mortgage because he had about $250,000 in student debt in addition to little savings.
So the surgeon applied for a loan specifically designed for doctors of which came that has a higher interest rate however no money down, in addition to just a future work contract as proof of income.
Mortgages tailored to doctors have grown more favorite inside last few years, according to the lenders who offer them. Bank of America said the item has seen the dollar volume of physician mortgages the item issued between 2008 in addition to 2017 increase ninefold because of greater awareness coming from consumers.
Smaller banks also report increases. Stillwater, Oklahoma-based Bank SNB, owned by Simmons First National, issued $50 million in physician home loans last year in addition to can be on track to double of which amount This particular year, said Drew Daniels, a mortgage sales manager who launched the loan program.
Meanwhile, SunTrust Banks’ largest subsidiary, based in Atlanta, has doubled its staff dedicated to serving physicians in addition to medical practices over the last four years as the item sees more demand for the mortgages, according to a company spokesman. in addition to LeverageRx, a website of which compares physician mortgage lenders, has seen a 51 percent increase in doctors searching for the loans year-to-date, compared with the same period last year.
High salaries in addition to a stable job market relative to different professions make doctors lucrative in addition to low-risk customers for banks of which wish to sell them different products down the road. The average physician salary This particular year can be $299,999, according to Medscape’s annual survey of 20,329 doctors across roughly 30 specialities.
“You’re a student, emerging physician, hit with all This particular debt. You have a lot of future upside,” said John Cross, divisional sales executive at Bank of America. “If you provide a mortgage solution at the beginning of their career, … coming from there the item turns into all kinds of different conversations.”
Bank of America stopped offering the loans in 2009 during the housing crisis however brought them back in 2010 with stricter borrowing guidelines, Cross said. For instance, doctors have to put at least 5 percent down instead of zero.
For brand-new physicians, the loans can offer a fast path to home ownership for those who wouldn’t be approved otherwise. Last year, the median student debt for brand-new medical student graduates was $190,694, according to the Association of American Medical Colleges.
The loans are also designed for dentists, while some also cover veterinarians, optometrists, nurse practitioners in addition to physician assistants.