Is it Possible to Close on a Home Before You Start Residency or New Job?

Congratulations on matching or on finding a new job! Now that you know where you’ll be living for the next few years, you’ll need to find someplace to live. Sometimes it’s wise to rent for a while when you move to a new area. But not everyone is willing to move twice. Many medical professionals want to make the move as easy as possible and only to do it once. So if you’re planning on buying a home, you’re likely going to need to close on your home before starting work. Luckily, there are plenty of doctor home mortgage programs that can help you do that.

Why it’s a problem:

Because you’re trying to get a doctor home mortgage before you’ve started your new job, you have no payment stubs to show to the nice mortgage underwriter. They’re the ones who will determine how much of a credit risk you may be. Of course, that’s hard to tell if you haven’t started working yet.

The 60-day window:

Fannie Mae and Freddie Mac, who make the rules on “conforming loans,” those that are eligible to be sold on the secondary mortgage market, have given borrowers a 60-day window. So long as you have a signed and executed job contract, mortgage lenders can usually help you close on your home up to 60 days prior to the start of your job. After you provide this information, mortgage lenders can use the specified salary at your new job in their DTI (Debt-to-Income) calculations.

However, most banks will require “reserves” for those two months. That means you need to have enough money to cover your mortgage payments (usually the entire monthly PITI—principal, interest, tax, and insurance payments required) for at least those two months prior to start of your employment. Many will also require an additional 6 months or more of reserves, just to be on the safe side.

60 days and beyond:

But what if you want to close on your home three or four months in advance of starting work? Is that even possible?

Unfortunately, it’s not possible if your doctor home mortgage program is using the “conforming loan” guidelines since these regulations make it possible for them to sell your loan on to the secondary mortgage market. Having the option to do so mitigates the bank’s risk, but it does tie their hands.

Many of the doctor home mortgage programs, however, plan on keeping your loan as part of their own portfolio. Since your loan will be kept “in house,” they have a lot more wiggle room on closing early. So, it’s not uncommon to see doctor home mortgage loans that will allow you to close 90 days, 120 days, or even farther in advance of your start date.

For those who need to close more than 60 days in advance of the start of their jobs, we’ve compiled the following list for you:

 “120+ Days” Doctor Home Mortgage Loans

Huntington Bank

So long as there are no outstanding contingencies, Huntington should be able to work with your particular closing date requirements. You will need to have at least 2 months of reserves per month prior to the start of your contract start date.

Medical Professionals to whom program is available: MD, DO, DDS, DMD, or VETD

States Available: IL, IN, KY, MI, NJ, OH, PA, WV, WI

Contact Sandi Jameson-Frith or Michael J. Smith

 

Fulton Mortgage Company

They’re willing to work with your situation.

Medical Professionals to whom program is available: MD, DO, DDS, DMD, PHARMD, VETD in residency or fellowship. If already practicing, they can not be out of training for more than 10 years, but if they are relocating the 10 year restriction no longer applies

States Available: DC, DE, MD, NJ, PA, and VA

Contact J. Mansisidor

 

Physician Loans

They can help you close 120 days (and possibly more) in advance of the start of your job.

Medical Professionals to whom program is available: MD, DO, DDS, DPM, and DMD

States Available: CA, CO, CT, DC, FL, GA, IL, IN, KS, KY, LA, MD, MI, MN, MS, MO, NC, OH, PA, SC, TN, TX, VA, WV, WI

 

“Up to 90 days” Doctor Home Mortgage Loans

Horizon Bank

Medical Professionals to whom program is available: MD, DO, DMD, DDS

States Available: IL, (greater Chicago area), IN, MI, OH (call for specific counties served)

Contact Barb Reamer

 

BancorpSouth Bank

Medical Professionals to whom program is available: MD, DO, DDS, DMD

States Available: AL, AR, FL (Panhandle area), LA, MS, MO, OK, TN, TX

Contact Charley Woodward

 

Cadence Bank

Medical Professionals to whom program is available: It’s actually an “Early Professional” Loan available to Doctors, Dentists, Engineers, Architects, Pharmacists, Chiropractors, PHD level Professors, Attorneys, CPAs, etc. who have been practicing their profession for no more than 5 years post-graduation or post-certification. They must have their license prior to closure.

States Available: AL, CO, FL, GA, MS, NC, TN, and TX

Contact: Lisa Daniels

 

First Financial Bank

Medical Professionals to whom program is available: MD, DO, DDS, DMD, DVM, MSN (Nurse Anesthetist)

States Available: IN, KY, OH

Contact Bill Lavelle

 

Synovus Mortgage

Medical Professionals to whom program is available: MD, DO, DDS, DMD, and DPM

Available in these states: AL, FL, GA, MS, NC, SC, TN

 

University Federal Credit Union

Medical Professionals to whom program is available: MD, DO, DDS, DMD, DPM, NP, and RN

States Available: TX

 

US Bank

Medical Professionals to whom program is available: MD and DO (Cannot be out of residency for more than 10 years)

States Available: All 50 States

 

Midland States Bank

Medical Professionals to whom program is available: MD, DO, and DPM

States Available: Available in All 50 states except MD

 

Washington Trust

Medical Professionals to whom program is available: MD, DO, DDS, DMD, DPM, DVM

States Available: CT, MA, NH, and RI