Loans for locums

[Grade4BorBor]

Hi,

I have about 18 months until I'm done with residency, and my SO and I are looking to relocate to a more pricey part of the country upon graduation. 3 bed 2 bath homes can be around $500k, which is around the size of home we would both be happy with. My plan is to be 3/4 time locums though and I wonder if banks look askance at someone asking for a loan without an employment contract guaranteeing X monthly or yearly income.

Any thoughts? My other idea is we rent for a bit in the area, I accrue more liquidity after a year or so, and bring tax statements, quarterly or yearly, to the meeting with the bank.

It seems that banks offering "physician loans", and by that I mean low interest/low down payment, might only offer loans to those who have proof of future earnings/current assets meeting their threshold in hand.

Edit: My SO has <$150k in debt but I have none.

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[doc05]

Why would you choose to do locums as a new grad? Kind of an unusual path.

 

[Grade4BorBor]

I would agree it's a bit different and not sure how marketable I will be immediately out of residency, but some benefits are the ability to make my own schedule, working in a variety of environments, and potentially making more money per hour as many places requiring locums try to attract physicians with higher pay.

Do you have any thoughts on the loan question? I have never taken out a mortgage and not sure if a residency diploma/specialty board cert and medical license is enough for a bank to issue a low interest/low down payment loan.

 

[Dr. Mortgage Lender]

Hi,

I have about 18 months until I'm done with residency, and my SO and I are looking to relocate to a more pricey part of the country upon graduation. 3 bed 2 bath homes can be around $500k, which is around the size of home we would both be happy with. My plan is to be 3/4 time locums though and I wonder if banks look askance at someone asking for a loan without an employment contract guaranteeing X monthly or yearly income.

Any thoughts? My other idea is we rent for a bit in the area, I accrue more liquidity after a year or so, and bring tax statements, quarterly or yearly, to the meeting with the bank.

It seems that banks offering "physician loans", and by that I mean low interest/low down payment, might only offer loans to those who have proof of future earnings/current assets meeting their threshold in hand.

Edit: My SO has <$150k in debt but I have none.

A lender will want to feel confident the income used for mortgage qualifying will continue. You’ll need a either a work offer letter/contract stating a guaranteed base pay and time frame. Also, very important to be paid via W2 (employee), not 1099 (independent contractor). If you are paid through 1099, you’ll need to wait until you have a 2yr history of receiving that form of income before most lenders will allow it. You would be able to secure a physician loan while in residency but it will be based on your current income, unless you get a work contract as mentioned above.

 

[TMP-SMX]

How do you know you'll like the new location? Might be worth feeling it out for a year or two and renting.

 

[Grade4BorBor]

Dr. Mortgage Lender: thank you for your thoughtful reply! Confirmed what seems reasonable from a lender's perspective.

Bactrim: I've lived there before and loved it. SO likes it too. But there is some wisdom in renting for a bit.

 

[TMP-SMX]

If there's a lot of potential jobs in the same area (you'll be there for at least 4-5 years) then financially probably a better plan to buy. If it's a little remote and if you don't like your job you'll be losing financially if you move.

 

[Grade4BorBor]

If there's a lot of potential jobs in the same area (you'll be there for at least 4-5 years) then financially probably a better plan to buy. If it's a little remote and if you don't like your job you'll be losing financially if you move.

Yes this seems to make the most sense. Thank you!

 

[FlowRate]

the ability to make my own schedule, working in a variety of environments, and potentially making more money per hour as many places requiring locums try to attract physicians with higher pay

Just wondering how much you've really read up on this. Locums isn't all sunshine, cash, and rainbows. I wish I could think of the thread but there have been a few good ones on SDN by people trying to handle serial locums work and it sounds like quite an undertaking. The worst part is that it's often misleadingly advertised and you're often not in a "make your own schedule" type of position.

 

[cpants]

I agree that renting is the way to go. You can establish 2-3 years of income and save $100k for a down payment. You won't need a physician loan and you will enjoy a lower interest rate.