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Loan Talk

Highest Rent in the USA

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How much rent would you pay to live in the city of your dreams? (Updated for 2019)

We all know some cities are just expensive…But how do they compare?  Below is a list of the most expensive rent by city compiled together by zumper.com as of 2019.  All rents are the median price for a one bedroom apartment. Enjoy!

Nationwide Median 1 Bedroom – $1,215

  1. San Francisco, CA – $3,700
  2. New York, NY – $2,850
  3. Boston, MA – $2,420
  4. San Jose, CA – $2,410
  5. Los Angelos, CA – $2,280
  6. Oakland, CA – $2,200
  7. Washington D.C. – $2,150
  8. Seattle, WA – $2,390
  9. Miami, FL – $1,800
  10. Santa Ana, CA – $1,780

Remember to keep the cost of renting and living expenses in mind for your next step in your medical journey.  That huge offer you received might not be as big as you first thought! Of course, there are significantly more things to consider than just cost vs income. Find out what costs you should consider? 

Physician Mortgage How Much Can I Afford?

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Working Out What Mortgage You Can Afford as a Physician

If you’ve just qualified as a physician – or have been working for a few months, and are beginning to think about getting onto the property ladder – then there’s a good chance you’ll have grappled with the idea of “how much can I really afford” when it comes to getting a home loan.

As a Physician, you’re on a relatively good salary – which is likely to increase with experience – so you’ll be faced with some pretty attractive offers from lenders.

Before jumping in, and accepting the maximum offer, however, it’s well-worth working out whether you can really afford the mortgage your lender offers.

In this post, we’re going to look at a few ways you can plan your mortgage’s affordability.

How To Calculate Your Monthly Costs

Thankfully, there are – today – a variety of very efficient mortgage calculators online, which basically do all of the hard work for you.

Mortgage Qualification Calculator – At our mathematical friends and whizzes at DinkyTown.net.

It’s worth looking at your income (after tax), along with ANY and EVERY outgoing you can think of. Don’t forget to add in costs like insurance, closing costs, and also don’t forget about the downpayment, as this may factor into things if you’re relying on savings to ease the initial repayments.

By law, lenders are not allowed to approve you for a mortgage if the repayments would take up more than 35% of your monthly income. This is under the Mortgage Reform and Anti-Predatory Lending Act, which itself is a section of the Dodd-Frank Act, brought into law back in 2010.

While this doesn’t affect you, it’s worth bearing in mind that most lenders will typically avoid approving you for a mortgage if the repayments will take up more than 30% of your monthly income.

(They leave themselves some degree of wiggle-room.)

You’ll also find some lenders adopt a 28% stance – particularly if your debt-to-income ratio (known as a DTI) is high, or if you have a poor credit history or unsteady employment.

A Word of Warning:

Many physicians take out mortgages higher than they can reasonably afford, thinking that in a few years time their salary will have increased sufficiently to cover the mortgage repayments.

(Some even have the aim of paying off their mortgage early, once they receive a pay-rise, only to find that things don’t go to plan, and they become financially unstable.)

For this reason, it’s never worth borrowing more than you can afford… and while legislation like the Mortgage Reform and Anti-Predatory Lending Act has helped somewhat with this, there is still an onus on YOU to ensure you’re borrowing an amount you can afford.

If you feel you need help, don’t be afraid to contact a financial planner or mortgage expert. They’ll be able to take a look at your monthly income, and outgoings, and determine exactly what you can afford.

Above all else, however, don’t just feel that because you’ve been offered a higher mortgage loan than you though, you have to take it.

You’re going to be paying your mortgage for many years to come – and if your repayments are too high, or you find yourself short on money every month, it’s not just your finances that will suffer; so always be thorough, honest with yourself, and realistic; you’ll be thankful for doing so later down the line.

The Truth about the Physician Home Loan

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The truth behind why so many banks have a physician home loan…

It seems lately most banks have started offering a “physician loan”.  Just as you found our site you found 15 others all promising low rates, limited underwriting, and smooth closing.  You are smart enough to know that is not always the case. The banking industry has always desired a way to get high-income earners to become loyal clients. How do you accomplish that?  Do you promise great service? You should– even though everyone in America expects great service.  From McDonald’s too personal financial advisor to the local barber. So if a doctor can go into any financial institution and receive royalty treatment just by uttering their profession. How can you get a doctor to think they need the bank instead of the bank needing them? How does the bank create loyal high income earning clients?

The banks’ physician home loan solution

You all have one thing in common.  Long periods of delayed gratification and sacrifice. Starting at undergrad continuing to med school with internships, residencies and countless sessions of kissing the butt of whoever you had to at the time.  All of that combined with astronomical student loans and earning little to no pay for a decade.  This is the banks’ opportunity.

Who likes paying their student loans?  It did not take long for the banks to figure out that student loans bred resentment, not loyalty.   What could the bank offer to counteract that resentment?  EVERYBODY loves the feeling of buying their first home.  It is romantic.  I still remember my wife and I’s first home buying experience the excitement, the nervousness, and the love that we felt.  The banks realized if they could help make the difficult transition at the end of your schooling to the first “real” position held easier, then you would feel like the banks did you the favor!  Even though you were 3-6 months out from the serious money.  Your mindset is still that of the low-income-earning-high-loan-burdened student how deserves something nice for all their hard work.  LIGHTBULB!  The banks could take a calculated (low) risk of mortgage lending to a highly regarded profession with a solid track record of high income earning levels.  Creating a sense of loyalty from the doctor to the bank.  Genius!

Is the physician home loan a bad thing?

To answer that question is extremely personal. A question that comes with a lot of preconceived notions and bias. I am a morally driven capitalist.  I want to make higher than average income but not at the expense of my soul or reputation. My thought is everybody uses a financial institution and you are a highly educated adult.  Just as prescriptions can be addictive and misused to harm oneself so can borrowing money.  Answer these 3 questions to know if you are using the product correctly. Does the home you have interest in fill your needs or fill your ego?   Will this home hinder, help or neutrally effect my 3-5 year career goals?  Does renting the same home cost more or less in your area?  Remember the easiest person to deceive is ourselves.

That is the truth which is likely to cost me business.  I feel great that somebody finally said it…

If you are ready to find the best physician home loan available in your state click here to see all your options.

First Home 3 Things to Remember

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Buying Your First Home as a Physician: 3 Things to Remember

So, you’ve qualified as a physician, and can’t wait to leave your residency and start your practice. You’ve been offered an amazing position… and all you need now is somewhere to live! For many, this is their first home.

Whether you’re a house-buying novice, looking to practice as a physician in a new city, wanting to get your step on the property ladder or an experienced physician who owns a clinic – but who wants a change of scenery – the same rules apply when it comes to relocation.

You must find a balance between affordability, availability, and suitability.

Affordability

Generally-speaking, as a physician, you’ll be able to afford a bigger house than most. However, just because you may find yourself in a higher income bracket than the average American doesn’t mean you can just choose any home you want, and assume you’ll get approved for a mortgage.

After all, mortgage guidelines (although rough) follow the principle that you can borrow up to three times your total annual income. (Couples benefit here, by being able to combine their incomes to increase the mortgage amount.)

Of course, that may sound like good news – and for many physicians; it is.

However, there’s no point taking a mortgage on your perfect home, if it’s going to leave you sacrificing most of your monthly income on mortgage repayments.

A good guideline is to aim for your monthly mortgage repayments to be no higher than 40% of your net monthly income. This ensures you can comfortably make your repayments, while also giving you plenty of leg-room for savings, home-improvements… or building your nest egg for your golden years.

Availability

Once you’ve got a realistic idea of what you can afford – both in terms of your own cash you’ll be putting towards the purchase of your home – and the mortgage loan you can afford – you need to determine if the home you want, is actually available in the location or neighborhood you want to live in.

More often than not, you’ll find yourself having to make compromises on at least some of your “must haves” and “must avoid” when it comes to finding your first home… so be prepared to be somewhat flexible, as this will enable you to find a home faster, and easier.

Searching for your first home can seem like venturing into a large jungle, with nothing more than a penknife; however, there are a few methods you can use to ease your search, and one of the most effective (and easiest-to-do), is to browse internet forums and message boards like Reddit.

Unless you have your sights set on a remote town with a population of 100, there’s a near-certain chance you’ll find questions from people online, asking what the areas are like, what it’s like to live there and so on.

This type of research can give you a good starting point – and once you’ve settled on your area (or areas), then you can begin actually looking for houses, thanks to the narrowed-down range you’ll now be dealing with.

Suitability

Once you find a home you like the look of – or, in most people’s case – a few properties you’ve “shortlisted”, it’s time to decide which is the most suitable.

Before deciding either yes or no, you need to weight up a number of factors:

Work Accessibility: Is the home near enough that you could comfortably commute each day to your new place of work? Is there public transport you can use, or would you need to drive?

Local Facilities: Are there shops nearby? How about restaurants, parks, and cinema complexes?

Crime: What’s the local crime rate for burglary? Have there been higher-than-normal violent crimes recorded in the near vicinity? Is there a likelihood of gang activity?

Schools: Is the nearest any good? If you already have your eye on a school – is the home you’re looking at in the catchment area? What do the average grades look like?

Parking: Is there off-street parking available? If not, but there is on-street parking – is it a busy road? Is it likely you’ll struggle to find a space when returning home from work?

Some of the points above can sound a little anal – and in some ways, they are. But what you’ve got to remember is that buying a home is no small decision. Buying your FIRST home is an even bigger feat.

Combine that with the fact you are moving to a new, unfamiliar area…

And it’s not hard to see why taking your time is advisable.

Want a Simpler Way To Relocate and Buy Your First Home?

— Get in touch with us here at Physician Banks.

We’re a service dedicated to helping physicians relocate to new cities or states – regardless of whether they’re being a home for the first time, or if they’re already a homeowner – and we can take ALL of the hard work out of choosing your home.

We’ll help connect you with loan officers (so you can get your mortgage quickly, at a great rate)… we’ll do the house-search ourselves, in conjunction with our nation-wide collective of realtors (before presenting you a shortlist for you to look through…)

And we’ll help you at every step of the way – ensuring your move and purchase is as smooth, simple, and hassle-free as possible.

Best of all?

There’s No Charge For Our Service.

We recoup our fees from realtors… and as a special “thank you” for working with us, we’ll even give you a cashback figure up to $3,000, when you close your new home!

To find out more, and schedule an informal, no-obligation phone chat CLICK HERE

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