Buying a home as a healthcare professional isn’t always straightforward—especially if you’re dealing with student loans, forbearance, or 1099 income. That’s why Josh Mettle, Division President and Director of Physician Lending at NEO Home Loans, joined Fitbux for an exclusive webinar to break down the biggest challenges (and solutions) facing buyers like you.
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Key Highlights from the Q&A
In this session with Fitbux, we dug into some crucial topics that are top of mind for medical professionals looking to navigate the housing market and secure a mortgage. Here are the key takeaways:
Student Loan Flexibility
With all the confusion around SAVE, Junction, and student loan forbearance, many buyers were worried about qualifying for a home. The good news? Medical professional loans—often called physician loans—are more flexible when it comes to student loan payments. Unlike conventional loans, which can count your entire student loan balance as a payment, medical professional loans allow for more leniency. As long as your loans are deferred for 12 months or you can get documentation showing future payments, you might qualify with a significantly lower debt-to-income ratio.
No Need for Two Years of 1099 Income
If you’re in a 1099 role—think locum tenens or per diem work—you’ve probably heard that you need two years of tax returns to qualify for a mortgage. That’s true for conventional loans, but not for medical professional loans! These loans often allow you to qualify even before you’ve received your first paycheck, as long as you have an employment agreement with guaranteed hours or income. If your income is variable, you might need a bigger down payment, but there are still options available.
Medical Professional Loans Aren’t Just for MDs
There’s a misconception that doctor loans are only for MDs. Not true. Many lenders, including us at NEO Home Loans, offer loans for a wide range of healthcare professionals. This includes dentists (DDS), veterinarians (DVM), CRNAs, NPs, RNs, and more. Depending on your profession and location, you might even be eligible for 100% financing up to $1M, with minimal down payment requirements for others.
Flexible Loan Terms
Medical professional loans come with both fixed-rate and adjustable-rate mortgage (ARM) options. In many cases, a 7-year ARM can provide better pricing, which works out for many healthcare professionals who don’t stay in the same home for more than 7-10 years. If you’re open to an ARM, you could lock in a lower rate and save money in the long run.
The Real Estate Market Outlook
Despite a drop in existing home sales in 2023, home prices still went up by about 5%. Why? Because 80% of homeowners have mortgage rates below 5%, and no one’s eager to sell. But here’s the exciting part—mortgage rates have dropped since January, making homes more affordable and opening up opportunities for buyers. If you’re thinking of buying, don’t wait too long. As more buyers re-enter the market, competition is bound to ramp up.
Top Tips for New Graduates and Healthcare Professionals
Josh’s #1 advice for new grads and healthcare pros? Don’t wait until you’ve found a house to talk to a lender. Get fully underwritten now, not just pre-approved, to avoid delays and potentially missing out on your dream home. Also, work with a realtor who understands the unique needs of medical professionals—this can make all the difference in your home-buying journey.
