Self-Employed Physicians

Physician loans for self-employed & 1099'd physicians

We've compiled this resource and videos below so that we can inform you and answer many of the questions that we receive from our self employed and 1099'd physicians. As a self employed or 1099 physician, you face more challenges than almost any other type of client that we work with, in that you're still relocating many times, you still have student loans many times. But, to stack on top of that, you've got self employed 1099'd income which creates a whole other level of challenges for mortgage lending. So, we'd like to educate you as much as we can and answer many questions with the videos below. Then we'd invite you to contact us for a compatibility interview. We spend 5 to 10 minues on the phone, we're going to ask you a couple of pointed questions to get a little better feel for your situation and then at the conclusion of that we can answer all your questions. And then if we feel like we're a good fit, we can invite you to move forward with the application process. The other thing you can do is if you watch the videos below and if you feel comfortable with moving forward right away, you can just complete the application, which you can find the link for at the bottom of this page, and then upload any documents and we can get you a financing proposal right away. Thanks fso much for tuning into us and we hope that we provide you with some real value and some information on financing for self employed physicians.

Why work with us- Solutions and Service

There are a lot of things that we do that are different from other loan officers and other mortgage programs, but I can boil it all down to two really key points. And that is solutions and service. Whether it's one of our specialized physician programs, an FHA program or a conventional program, we have loan officers, pre-underwriters and final underwriters who have all been specially trained to identify and understand the unique sets of situations and contracts that physicians have. So whether you are going into residency, starting a new position or you are a self employed 1099'd or in private practice, we understand those complexities and we know how to place your loan with the correct loan program that will find the right solution for you. And I think that is very different than most lenders. You'll find out right from the beginning we have a deeper understanding of your situation.

The second thing is service. We understand that many times when you are relocating or transitioning between jobs, there is a tremendous amount of stress to pack around the moving, the relocating, kids - it just adds stress to everything. And if we put a complicated loan process on top of that, it can be too much to bear. We understand that we need to get as much documentation up front, we need to have a very clear, fundamental understanding of what your situation is - where you're going into practice, what your new contract looks like and when you need to be in your new home. Then we deliver excellence in service in guiding you to that place.

So, what I'd invite you to do is to take a look around the website and find out what these resources have to offer. You're going to see that we have a unique section for residents, for new physicians or physicians relocating and self employed, or private practice. Go there, enjoy those resources and then I'd invite you to contact us. Thanks so much, we hope we have the opportunity to help you.

Am I better off renting or should I buy?

That's a really good and although I do love real estate and I think there's no better way to build wealth and tax deductions and all the benefits that come with owning a home, I think there is also a time when you should rent. The only way to really know how that should work for you is to identify the market and where you're buying, and then do a cost analysis. Take a look at what it's going to cost you to rent over the next coup;e of years and take into consideration that if you're in a booming economy or a hot economy that likely you're going to have rent raises over the next couple of years. And then take a look at where the real estate market is and then see what those payments look like. What are the payments on rent vs. the payments to buy and what are those costs going to look like over the amount of years that you expect to be in your home. And then I'd also encourage you to think about when you're buying a first residence or a primary residence that you're probably going to get one of the lowest interest rates in your entire life. And with that loan, it's expected that you live there for at least a year, but it is oftentimes a great opportunity to leverage that low interest loan into an investment after you move on, whether you're out of state or staying in the state moving into a larger home. But you can keep that as investment property. So, I'd love to counsel you and give you advice on that directly and if there's anything we can do to be of service helping you break down those different costs we'd be happy to do it. We'd invite you to reach out to us directly for more information.

How do I tell if a loan company is legit?

The only way to really know is to do your own research and due diligence in searching out a mortgage lender. One of the ways that I'd suggest you do that is get on Google. Start researching them. See if you can get a list of their past clients and get a deeper understanding for who it is they serve in their community. One of the things I'd love you to do is take a look at this testimonial from Utah Medical Association Financial Services where they've endorsed us as their preferred lender.

"We have been very impressed with Josh and his team. In fact, I first learned of Josh through one of my physician clients. The feedback was so outstanding that I decided to contact Josh directly and meet. Since that time, we have been extremely impressed with Josh?s knowledge, customer service and strong desire to continually do what is right for his clients. As a result, we have been referring our clients to Josh and the feedback continues to be exceptional!"

Jeff Zesiger, Vice President ? Utah Medical Association Financial Services

They've done that because we have a deeper understanding of the physicians that we serve and that we're more adept at identifying the unique challenges and making sure that we get you into your home without any surprises.

If you have any other questions about this we'd be more than happy to answer them for you. We'd love you to check out the testimonial.

What is the difference between a physician loan and a conventional loan?

That is a particularly important question for self employed or 1099'd physicians. The conventional loan guidelines will typically require that you are in practice and have two years tax returns filed as being self employed. Where a physician loan program will allow you to qualify with as little as one year's tax return and oftentimes that will just show six month worth of employment in private practice. There's also even some more liberal guidelines depending on what type of private practice you're in. If you are a 10 99'd employee who is essentially an employee of a practice but just receiving your income via 1099, then sometimes we can do it without even a single year's tax return being filed. Again, this is a very specific question, and when we start out with our initial interview we'll find out if we're compatible to work together, we'll ask all the right questions and then be able to give you a specific plan for moving forward on when we're able to help you. As always, we invite you to reach out to us, we'd be happy to answer any questions you have.

How much do I need for a down payment?

It really depends on the price point of home that you're going to be buying, and it depends where you are in your career. So, generally speaking, we have programs that will go up to 97% financing and that money can be gifted to you - you don't have to have accumulated that out of your own savings. And that loan will go up to a purchase price of about $430,000. And then if you're looking for a purchase price above and beyond that, say up to about $660,000, we'll have a loan program that jumps up to at least a 10% down payment. That loan program will require 5% of your own funds, and then 5% can be gifted from a family member. To directly answer your question on exactly how much down payment you'll need for your specific situation, we'd like to start out with a phone call. We call that our compatibility interview where we spend a few minutes finding out a little bit about your situation and we'll give you a proposal and give you exactly where your down payment would need to be. If you have any additional questions, as always, we invite you to reach out to us directly.

Can you get a construction loan with a physician loan?

Yes, but it's not going to give you as high of a loan to value as you would get with an existing construction. So, if you're building a home and you want 97% financing, we're going to struggle with that. If you're building a home and you have a challenge with student loans, maybe in deferment, or being new into private practice or being a 1099'd employee or maybe wanting to go into a 90% loan to value, then we have some solutions for you.

What you should know about this kind of product is they're going to be what's called a two time construction loan. So, you're going to close on the construction loan, that loan will typically be between 3 and 6 months while you build the home, and once the home is complete, we are going to refinance you to a long term construction. That's called a two time close as compared to a one time close. There are some lenders that allow one time closes, but none of them have any varying or bendable guidelines, specifically for physicians that I'm aware of. So a two time close, close on your construction loan, then refinance and get your long term financing. We do have some products available that will be more flexible, will bend the underwriting guidelines and are a little more liberal for physicians than they are for anyone else.

So this is a little bit more of a detailed conversation and there's many moving pieces when you talk about physicians relocating or starting new into practice and then the timing of two different loans. So, if you've got any questions about that, we'd invite you to email or contact us directly. We'd be happy to find out a little bit more about your situation and then give you some specific answers.

Are there really loans that you can put less than 20% down and not have mortgage insurance?

Yes, absolutely, we have those products. But, what you should know, this isn't a one size fits all solution. We have many different products and depending on your particular situation with your employment contract, your credit scores, the amount of money you have down, where your down payment is coming from, how much student loan debt you have, where you are in your repayment process with student loans - we have different solutions that will fit all different types of situations. So, where we start is with a compatibility interview. Usually takes five to ten, maybe fifteen minutes over the phone. We walk through your specific situation and all the factors that are in play.

If you are trying to get this done now, are working 70 hours straight through, have about ten minutes to catch some rest and don't have a spare minute to talk on the phone for a compatibility interview, then you can go down to the bottom of the page and fill out a loan application and get things rolling!

And then we're going to give you some advice on which loan program we think is best. Once we've done that, we usually do a cost breakdown or a cost analysis, where we're going to look at the difference between a physician loan product, an FHA product, and if you would qualify, a conventional product. And then we're going to make the best decision at that time on what the least costly solution for your financing is. So, we understand that you probably have a lot of questions about that and we'd be more than happy to answer them for you. We'd invite you to reach out to us directly.

I have massive student loans, will I qualify for a mortgage?

Don't let that scare you. We have solutions and many times have seen physicians that have student loans in excess of $250,000. Sometimes we've dealt with couples that are going through the process together and combined they have over $500,000 in student loans. So, don't let that scare you. We have solutions that will take care of that for you. And we have many programs, so we have a physician loan specific program, we have solutions even on the conventional and FHA side. Where this all starts and where we really understand your situation is we do a compatibility interview and during that interview we're going to find out a little bit more about you and then we're going to give you some specific solutions. So, we'd invite you to contact us directly. But don't be afraid if you've got student loans, there's more than likely a solution out there for you.

Do physician loans have higher closing costs & interest rate?

The answer is, it really depends. And it depends on your exact situation. So if you're asking a lender to go to a much higher loan to value like let's say you're in a situation where you want 97% financing and you don't want to pay mortgage insurance, then yes, typically you're going to have a higher interest rate. if you're in a situation where you're putting five, ten percent down, then no, your loan as a physician loan should actually be more cost efficient.

So, when you think about a physician loan, we're either going to be more liberal in the loan guidelines, meaning higher loan to values or higher loan amounts or excluding student loan payments. But with those more liberal guidelines, understand that typically there's a little bit of a higher cost.

Now what I encourage clients to do when we look at a loan is we do a side by side comparison. So, we'll look at a physician loan and the total costs associated - there's no mortgage insurance so we're just talking about closing costs and interest rate. And we'll maybe compare that with how an FHA loan would look or a conventional loan would look. Those loans are typically going to have mortgage insurance, interest rate and then closing costs, and we're going to compare those two and I'll do a total cost analysis so you can see the differences.

So, it depends where you are and what situation fits best for you, but on average, I would say that you are going to pay about 1/8, maybe 1/4 percent more for a physician loan that has very specific underwriting guidelines, more liberal underwriting guidelines that will help you get approved. As always, if you have more questions about that, we'd invite you to contact us directly.

Who is responsible for closing costs?

Who is responsible for paying closing costs?

That's all negotiable. What you should know is in a slow moving market, oftentimes buyers are able to ask the seller to cover their closing costs. That's just pretty much par for the course. When you see more of a fast moving market where there's very low inventory and the sellers kind of rule the roost, then oftentimes they are going to not pay your closing costs and you'll have to pay them yourself. And so how do yo upay them? There's a couple of different ways you can do that. You can do that in cash in addition to you down payment or you can actually roll it into your interest rate. So we've got several solutions there, where you say, "I'm probably only going to be in this house for 3 - 5 years" so maybe if we increase the intrest rate an eighth or a quarter percent, which typically is only going to kick up your payment between twenty five and fifty dollars a month, then you don't have to come to closing with tht additional money. So, we have solutions, we're more than happy to walk you through those depending on your specific situation. Don't let closing costs scare you, they are something we have a solution for. Thanks for watching and if you have any more questions we'd invite you to contact us directly.

How can I skip two month's mortgage payments when buying my new home?

This is a great one for new physicians, because lots of costs are associated with relocating - maybe your coming out of a fellowship or residency and haven't built up or accumulated a lot of savings and the down payment is taking a good portion of that. This strategy is something that we employ all the time. We want you to try and select a closing date when you find a home for the first portion of the month. Let's say you were to close in the first week of June. We're able to then push out your payment all the way to the middle of August. So not payment in June, No payment in July, payment's due August 1st but not late until the 15th. So, we can actually push that out as far as 75 days before your first payment is due to be received. Just a little tip, something that we try to do for our new and relocating physicians that we don't think many other lenders think through. If you have any other questions on how this might work for you, feel free to reach out to us directly. We'd be happy to answer your questions.

Will there be surprises the day of closing?

We get this all the time, and for the clients who don't say it, they are probably thinking it. Like any other industry, there are the good guys and there's the bad guys. And you really need to make sure early in the process that you are dealing with someone that has testimonials and you have a really good gut feel for. The process is, and when you are shopping for a loan, you need to understand that what you're getting is not just on a piece of paper, like a Good Faith Estimate, but you're actually getting a service. What you're buying is how will that process of the loan, and closing and making sure you get to the closing table without any surprises - how will that person service you throughout that process? So that's the thing that you've got to assess and the best way to do that is to do some research on those lenders. Make sure you look at their testimonials, ask them if you can talk to past clients, and you're going to figure out real quick if those guys will deliver exactly what they've promised to you. So if you'd like to speak to any of our past clients of view our testimonial page we'd certainly invite you to do that and we'd be happy to give you any other information you need.

How big of a PIA is the loan process?

Of course PIA is for pain in the *** and that's a question we actually got from a medical chat room and we go in there frequently and we try to understand the challenges that medical professionals are running into when they are getting home mortgages. And that's a question that comes up all the time - how big of a pain is this going to be? We think we bring a unique perspective and an advantage to you is our deeper understanding of those challenges that you're going to have. Those challenges surrounding student loans, new employment contracts, transferring across the country and the timing on the closing of your new home. And through our experience and deeper understanding, we're able to bring down that PIA factor substantially. However, understand that we are in the age after the mortgage meltdown and 2006 it was the glory days, if you could fog a mirror and you knew how to sign your name you could probably get a million dollar mortgage. That's not today. There's definitely more questions being asked, there's more due diligence, which is good for our real estate market. It's actually good for the state of our economy, but it's a little more work. Our deeper understanding is going to make it much less painful but you are going to have more questions and probably more detailed examination by underwriting to all the financial affairs. Basically all that means is a little more documentation. If you have any other questions on this, be happy to answer them, as always, we invite you to reach out to us directly.

Contact your New Mexico
Physician Home Loan Specialist