Should You Get A Doctor Mortgage When You Have Student Loan Debt? | Student Loan Planner


Maybe you’re thinking about getting a
physician mortgage for your house purchase. That’s okay, even if you have a
lot of student loan debt, because if you wait for a conventional mortgage and
you put down 20%, yeah you’ll have no PMI and you probably will have a lower
interest rate. The thing is, is if you need to pay back your student loans,
then your student loans are always after tax interest, because you don’t really
get a student loan deduction for your interest when you have above a certain
level of income. And even if you did get one, its capped at a very small amount of
money. In contrast, even though Congress decided to limit mortgage deductions for
interest for mortgages that are below $750,000, you still can generally reduce
your cost of interest for most people because most people do buy a house
that’s in that sort of range of, you know, below $750,000. So that means that a lot
of your interest for your mortgage might actually be deductible, whereas your
interest for your student loan is definitely not. And because of that
physician mortgages, they typically have no PMI and low required down payments
and a lot looser standards for qualifying based on income. Most banks
these days will offer some form of a doctor mortgage, and they’re now opening
them up to more than just physicians. You can get a “doctor mortgage” if you’re a
dentist, some cases if you’re an attorney even, which is interesting, and also
podiatrists, veterinarians in some cases, occasionally we see chiropractors
qualify. It really depends on the specific bank and what their program
says. So if you’re a doctor and you have a lot of student loan debt we would
rather see you put lots of money away into retirement and match your
retirement account, and we’d also rather see you put money away
into the tax bomb account, if you need to put money into one of those, because
you’re going for 20 to 25 year loan forgiveness, and we would like to see you
focus on paying down your student loans if that’s what you need to do, because
the interest rate after taxes is going to be more attractive to pay it down. So
that means that if you do a physician mortgage, please just consider buying a
house no more than two times your income, because that’s going to give you enough
freedom to have your house price decline and you not be
financially ruined from it, and also give you flexibility where you might be able
to still move if you needed to for a job. So that’s my take away on physician
mortgages. If you need to apply for one, we have a link. Go to studentloanplanner.com and the article link below. And hopefully you’ve learned a couple things
from watching that video. If you have a lot of questions surrounding your
student loans and buying a house, we’d love to help. Just check out studentloanplanner.com/help.

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