Banker helps doctor in new fellowship buy East Haven home

Mortgage banker: Patricia

Leary

Property type: Single-family home in East Haven

Purchase price: $265,000

Loan amount: $212,000

Appraised value: $272,000

Loan type: Conventional.

Backstory: Leary often works with buyers who are newly licensed medical doctors who have multiple student loans.

Leary received a call from a young man who was referred to her by a Realtor partner of hers. He had multiple student loans and had just finished his residency and was starting a new fellowship.

He had already spoken to another loan officer who didn’t ask if his fellowship was going to be a W-2 position or if he was going to receive a 1099 tax form at the end of the year. This makes a huge difference because when pre-approving someone for a mortgage we can use W-2 income but when the buyer receives a 1099 tax form, they are considered self-employed and a two-year history is needed. The buyer hadn’t started his fellowship yet.

At the time of the conversation, the buyer did not know the answer to Leary’s question. He had not received his first pay stub yet. The buyer then went to his human resource department and learned his fellowship would be a 1099 position. Therefore, the income couldn’t be used.

The buyer had other income for which he received a W-2 yearly. Leary asked him to explain that position and learned he did per-diem work in an emergency room on weekends. This income could be used.

Leary received permission to look at his credit report. The buyer had deferred student loans in the amount of $200,305.

Leary then did some research and found a Freddie Mac doctor’s program that would let her exclude the student loan payments from his debt if he met guidelines. Normally. you have to add 1 percent of the student loan balance to the borrower’s monthly debt. In this case, it would be $2,003 per month.

After going over the guidelines, Leary found the buyer qualified because his credit score was over 720, he was a newly licensed physician and had been practicing for less than one year. In addition, his student loans were deferred for one year from the proposed closing date of the note.

Leary could exclude the student loan payments from his monthly debt and using his contract for his per diem W-2 income, he qualified to purchase the East Haven property.

The Freddie Mac physician program is a new program available to all new physicians who meet guidelines. This will help them purchase a home before their earnings increase, which usually happens when they finish with their residency and fellowships.

The loan was approved and the loan closed with the buyer putting 20 percent down, though the program requires only a 5 percent down payment.

With student loan guidelines changing frequently on all types of loans, Leary has to stay on top of all of the changes.

This buyer gave Leary all 10s when filling out the Atlantic Home Loans Customer Feedback and stated: “Pat was terrific, much more honest and direct than other company’s loan officers.”