Dr. Home Finance: First Horizon Physician Loan Guide 2024

A Comprehensive Review for Medical Professionals

Introduction

As a doctor, the journey to homeownership can seem daunting, especially with the unique financial challenges you may face, such as significant student debt. The First Horizon Physician Loan offers a specialized solution, tailored to the needs of medical professionals. This review, from Dr. Home Finance, will guide you through the specifics of this loan program to help you determine if it’s the right fit for you.

Understanding the First Horizon Physician Loan

First Horizon Bank, a longstanding institution founded in 1864, provides a variety of banking services and has a particular loan program designed for doctors. With assets totaling $85.1 billion and a strong commitment to client and community service, they offer a robust option for physicians seeking home financing.

Key Features of the Loan:

• Maximum Loan Amounts: Loans are available up to $2.5 million.
• No Down Payment Required: For loans up to $750,000, no down payment is needed, which is crucial for doctors managing heavy student loans.
• Eligibility: Specifically catering to MDs, DOs, OMSs, and DPMs, this loan accommodates a select group of medical professionals.

Pros of the First Horizon Physician Loan

• Generous Loan Limits: You can borrow up to $2.5 million, allowing you to purchase a significant property as needed for your professional status and family needs.
• Zero Down Payment: Particularly beneficial for new doctors, the zero down payment up to $750,000 option frees up resources for other expenses or investments.
• Student Loan Flexibility: If your student loans are deferred for 12 months or more, they may be excluded from your debt-to-income ratio, making qualification easier.

Cons to Consider

• Limited Eligibility: The loan is only available to a specific subset of medical degrees.
• Banking Requirement: Eligibility requires having a checking account with First Horizon, which might be a drawback if you prefer managing all your financial services under one roof or having better terms elsewhere.

How to Apply for the First Horizon Physician Loan

1. Pre-Qualification: Begin by getting pre-qualified to estimate how much you can borrow. This step involves a casual discussion with a loan officer about your finances without committing to anything.
2. Gather Necessary Documents: Prepare necessary documentation such as income proof, savings, degree certification, and employment information.
3. Pre-Approval: Apply for pre-approval to get a more formal commitment. This will require a detailed application and documentation submission.
4. Satisfy Loan Conditions: Once pre-approved, you’ll need to meet any conditions set out by the underwriter.
5. Close the Loan: Finalize the purchase by closing the loan, signing all documents, and meeting any last administrative requirements.

Alternatives to the First Horizon Physician Loan

For those who may find First Horizon‘s offering limiting, several other banks offer physician loans with different benefits:

• BMO Bank: Requires lower down payments and offers flexible underwriting.
• Huntington Bank: Offers no down payments on loans up to $1 million.
• Fulton Bank: Allows no down payment on loans up to $1.5 million and offers closing cost assistance.
• Fifth Third Bank: Provides 100% financing up to $750,000 and larger loan options for established doctors.

Frequently Asked Questions

• Are the interest rates competitive?
  • While typically competitive, rates may be slightly higher due to the loan amount and the zero-down payment feature.
• How much can I borrow?
  • The loan amount varies based on your financial profile, including your income, assets, and credit score.
• Who is eligible?
  • Eligibility is restricted to MDs, DOs, OMSs, and DPMs, limiting some potential applicants.
• What are the benefits of a physician loan?
  • These loans are ideal for doctors, due to the flexible down payment options and the potential exclusion of deferred student debt from financial assessments.

Conclusion

The First Horizon Physician Loan is a specialized financial tool designed to help doctors navigate the path to homeownership despite the heavy burden of student loans. With its generous lending limits and flexible qualifications, it stands out as a strong option for eligible medical professionals.

Making an Informed Decision

When choosing a physician loan, it’s important to weigh all factors, from financial benefits to potential limitations. The First Horizon Physician Loan offers substantial advantages, particularly for those in the early stages of their medical careers or those burdened by student debt. However, the requirement to open a First Horizon checking account and the restricted eligibility criteria can be drawbacks for some.

Financial Planning Advice

As a doctor, planning your finances with a long-term perspective is crucial, especially when considering a significant commitment like a mortgage. Here are a few tips to ensure that your home purchase fits within your broader financial strategy:

• Budget Wisely: Ensure that your home purchase does not overly strain your monthly expenses. Factor in not only your mortgage but also property taxes, insurance, maintenance, and unexpected repairs.
• Build an Emergency Fund: Aim to have at least six months’ worth of living expenses saved, separate from your down payment and closing costs. This fund will help you manage unforeseen expenses without financial distress.
• Consider Your Career Trajectory: As your income may increase over time, consider how future earnings could impact your ability to pay off your mortgage faster or invest in additional properties.

Leveraging Physician Loans for Financial Growth

A physician loan can be more than just a pathway to homeownership; it can also be a strategic financial tool. By saving on a down payment, you can allocate funds towards investments, retirement savings, or furthering your education, which can offer better returns over time. Additionally, the exclusion of deferred student loan debt can significantly improve your borrowing power.

The Role of Credit in Securing a Loan

Credit scores play a crucial role in determining your eligibility and the terms of your loan. A higher credit score can lead to better interest rates and more favorable terms. It’s recommended to:

• Check Your Credit Report: Make sure there are no inaccuracies that could impact your score.
• Pay Down Debts: Lowering your credit utilization ratio can boost your score.
• Avoid Opening New Credit Accounts: In the months leading up to your mortgage application, try to keep your financial situation stable.

Navigating the Housing Market

When searching for a home, consider the location, potential for property value growth, and the quality of local schools and healthcare facilities. These factors can significantly affect your lifestyle as well as the long-term value of your investment.

Summary

The First Horizon Physician Loan is tailored to address the unique financial challenges faced by doctors, offering substantial loan amounts with no down payment required for eligible medical degrees. While it provides significant advantages, it’s important to consider all aspects of the loan and how it fits into your overall financial plan.

Ready to Move Forward?

Whether the First Horizon Physician Loan sounds like the right fit for your needs, or if you have more questions, contact one of our verified bankers today. They can provide personalized advice and help you navigate every step of the application process, ensuring you make the best decision for your financial future.