Home Ownership (Financial Planning)

NAR's Profile of Home Buyers and Sellers indicates 38 as the median age of first-time homebuyers, up from 35 in the previous year. . The median income of first-time homebuyers is currently $97,000, reflecting an increase from prior years., according to the report, with the cost of the purchased home averaging $252,000. and a median down payment of 5 percent.

Deciding whether to rent or own a home is based on lifestyle factors or job stability. Only you can decide whether it is the right time for you to buy or rent.

Physician loans, also known as doctor loans, are specialized mortgage products designed to assist medical professionals in purchasing homes. These loans often offer favorable terms, such as low or no down payments and the absence of private mortgage insurance (PMI), acknowledging the unique financial situations of physicians, particularly those just beginning their careers. (Physician Lending Directory)

Key Features of Physician Loans: 

• Low or No Down Payment: Many physician loan programs allow for minimal to no down payment, enabling doctors to purchase homes without significant upfront costs.
• No Private Mortgage Insurance (PMI): Unlike conventional loans that typically require PMI for down payments less than 20%, physician loans often waive this requirement, reducing monthly expenses.
• Flexible Debt-to-Income (DTI) Ratios: Lenders may offer more lenient DTI ratios, considering the potential for high future earnings and existing student loan debt common among medical professionals.  
• Consideration of Employment Contracts: Physician loans often accept employment contracts as proof of income, accommodating those who have secured positions but have not yet started working. 

While physician loans offer attractive benefits, it's essential to assess the terms carefully. Some loans may come with higher interest rates or specific eligibility criteria. Consulting with a financial advisor or mortgage specialist can provide personalized guidance based on your unique circumstances.

Below are a few mortgage-closing costs you will encounter while purchasing a home. They are fees charged for services that must be performed to process and close your loan.
Mortgage Closing Costs - Third-Party Fees

• Appraisal
  The appraisal is required to determine the fair market value of the home. A property appraisal is generally required by a lender before loan approval to ensure that the mortgage loan amount is not more than the value of the property. Therefore, an appraiser is needed to make this determination.

• Credit Report
  When you apply for a mortgage, you have to prove that you are capable of paying it back. Lenders will obtain a copy of your credit report to review your borrowing history and determine if they should risk lending you money. This fee goes to the credit-reporting agency like Experian, TransUnion or Equifax.

• Closing Fee - This fee is paid to the Title Company or attorney for conducting the closing.

• Title Company Title Search or Exam Fee - This fee is paid to the title company for doing a detailed search of the property records for your home. The title company will look at prior deeds, court records, property and name indexes, and many other documents. This is to ensure that there are no liens or problems associated with your ownership of the property.

• Survey Fee - A survey of the property may be required to verify boundary lines for your property and to ensure that there is no encroachment on the lot.

• Flood Determination/Life of Loan Coverage - This cost goes to determining whether your property is located in a federally designated flood zone. If the property is found to be located within a flood zone, you will need to buy flood insurance.

• Courier Fee - This covers the cost of transporting documents to complete the loan transaction as quickly as possible to avoid paying additional interest on your mortgage loan.

• Title Insurance (Lender’s Policy) - This covers the costs of assuring the lender that you own the home and the lender’s mortgage is a valid lien.

• Title Insurance (Owner’s Policy) - This is an insurance policy protecting you in the event someone challenges your ownership of the home.

• Homeowners Insurance - Homeowners Insurance is required to cover possible damages to your home. In the event of a fire or other damage, homeowners will receive this insurance to cover the costs of rebuilding. Your first year’s insurance is often paid at closing.

• Buyer’s Attorney Fee - This fee is paid to the attorney who prepares and reviews all of the closing documents on your behalf.

• Lender’s Attorney Fee - This fee is paid to the lender’s attorney for preparing and reviewing all of the closing documents on behalf of the lender.

Fixed rate and adjustable rate mortgages are the two main types of mortgages, but there is a wide variety of other mortgage products available. Below are pros and cons of just a few of the mortgage products you may want to consider.

Type of Mortgage	Pros	Cons
Fixed-rate mortgage	No surprises The interest rate stays the same over the entire term, usually 15, 20 or 30 years.	If interest rates fall, you could be stuck paying a higher rate. Unless you refinance the loan.
Adjustable-rate (ARM) or variable-rate mortgage	Usually offers a lower initial rate of interest than fixed-rate loans.	After an initial period, rates fluctuate over the life of the loan When interest rates rise, generally so do your loan payments.
FHA (Federal Housing Administration) loan	Allows buyers who may not qualify a home loan to obtain one Low down payment.	The size of your loan may be limited.
VA loan	Guaranteed loans for eligible veterans, active duty personnel and surviving spouses Offers competitive rates, low or no down payments.	The size of your loan may be limited.