There are lots of different types of mortgages, it depends on how we define type. However, your main choice will be whether you wish to consider a fixed-rate mortgage or opt for a variable rate. There are pros and cons to both. Then, if you are a doctor, you will want to consider taking out a physician mortgage, as this is a very favorable option and surely just what the doctor ordered.
The advantage of fixing your interest rate is that you can budget more effectively in knowing just how much your monthly repayments will be. The downside is that in say five years’ time the interest rate may have increased significantly. So, you could be paying more for your mortgage than you might have been with variable rate loans. It is the equivalent of gambling with your life’s earnings over a long period of time. A benefit of fixed-rate mortgages is that they are easy to understand and calculate for someone not financially minded.
It is possible to leave a fixed-rate mortgage, but the lenders will usually apply an early repayment charge. This will generally be a percentage of the loan, and typically between 1 and 5 percent.
Variable Rate Mortgages
With variable rate mortgages, the lender will offer you from the onset a rate that will be lower than a fixed rate. This makes this type of mortgage seem tempting at first. The disadvantages later, though, are that the rate will invariably rise over the longer term. It can be hard to budget for the unknown as it will be more of a projection. The solution is not to have finances so tight that you are unable to cope with such fluctuations. Choosing this type of loan is not an easy decision to make even for a financial expert who has some idea of future economies. A mortgage advisor will only be able to advise you so far and ultimately the choice will be yours to make. Taking out insurance is a good idea to protect you against future income loss from one spouse or another and minimize the damage that could ensure from potential future redundancy or longer-term sickness. Can you say for certain that the industry that you are in will provide you with a secure job for the length of your mortgage? Purchasing insurance will increase your expenses but at least give you peace of mind and protection. Many mortgages as standard may anyway come with insurance protection.
It cannot really be phrased, if you are lucky enough to become a doctor you can obtain a more favorable mortgage than most, because it has happened as a result of a lot of hard work and study. It is fair to say, though, that it is a mortgage worth considering for those in the medical profession. Physician mortgage loans offer mortgages that are in the main not reliant on any deposit. At least, it will be a low deposit that the mortgage lender requires. This is the one factor that prevents many people from owning their own homes and getting on the property ladder. Also, with doctors, student debt will be viewed favorably and worked around. This type of mortgage also applies to doctors who are still qualifying. It is viewed that they have careers ahead of them that provide a good earning potential and job security that is not possible in other industries when the economy is constantly on a knife-edge.
So, do not be deterred, there should be a mortgage out there to suit you. It is just a matter of seeing which one best meets your budgeting needs and which will serve you well where the future is uncertain, no matter how safe and secure you feel at present.