We’ve all heard that buying a house is the biggest investment most people will make. It is very important to go into it knowing what lenders are looking for, and where to get the best financing. One of the biggest factors will be your mortgage to income ratio – lenders will look at this first to help them determine if you’re a good prospect for a mortgage.
MediPro can be your trusted source for access to home financing, and for real-world advice that comes only from years of experience. We specialise in matching medical professionals with mortgage lenders, and in securing business and practice loans, equipment loans, and a range of other types of financing for the medical profession.
Mortgage Debt to Income Ratio for Medical Professionals
If you’re someone who works in the medical field, you may have easier access to mortgage financing along with additional benefits. Lenders view medical-based incomes as more stable than most other fields, and compensation tends to be higher as well. It pays to learn how this can benefit you when you are ready to find the home of your dreams.
Understanding Debt to Income Ratio (DTI) – The Key Metrics
Most mortgage lenders look for home buyers whose total debt is not more than 6 times their annual gross income, but this number changes from lender to lender. Depending on circumstances, some lenders will let a buyer exceed this, up to about 8 DTI. To make this determination, lenders may look at the quality of a prospective buyer’s finances in addition to the numbers – stable long-term income sources are viewed favourably, and medical professionals tend to benefit here. The brokers at Medipro can advise you on acceptable DTIs and also methods to supplement if the requirements are not met.
Medical people who are in the earlier part of their career may still be carrying loans for high education costs – adding this existing debt to their mortgage debt to income ratio – but it has also put them in a position to earn a high income and benefit from the stability of working in the medical field. This is understood by lenders who make a practice of mortgage lending to medical professionals.
What’s In a Mortgage
A mortgage typically consists of four main parts: principal, interest, taxes, and insurance. Insurance will be property insurance to protect the home, plus private mortgage insurance to protect the lender should the buyer become unable to pay. Medical professionals may have access to reduced mortgage insurance rates, because they are considered excellent credit risks by lenders.
The Other Big Number
Down payment – lenders tend to look for buyers who can make a down payment of 20 percent of the total purchase price, but this can be flexible, and some lenders will accept much lower amounts. In particular, medical professionals may be able to negotiate for a lower down payment. A knowledgeable advisor can help with this.
All the Extras
It’s important to be aware of all the additional costs of keeping a home and a life that typically go far beyond the basic mortgage debt to income ratio. For example, there will be property taxes, medical insurance, retirement contributions, and saving for college (and all the other expenses if you have children). These can be substantial, and there isn’t much room to skimp on them.
Mortgages for Medical Professionals
Now that we’ve covered the basics of mortgages and the mortgage to income ratio, there are still many aspects of these complex subjects that are specific to home loans for medical professionals. MediPro works with these aspects successfully every day, and has done so for years. It really pays to know how your status in medicine can help you obtain the financing you need for the home you want. Find out more at these links to our information pages specific to the medical professions:online or you can call us on 1300 375 626 with your questions and ideas.