For medical professionals, securing a mortgage can be an arduous process due to their unique financial circumstances. Extensive education and substantial student loan debt often pose hurdles in qualifying for traditional home loans. Finding the right mortgage can be challenging, but physician mortgage loans are here to help. They come with great terms and flexible underwriting to fit the unique needs of doctors, dentists, and other healthcare professionals. One standout option is Lake Michigan Credit Union (LMCU), which is well-known for their innovative physician mortgage program. In this article, we’ll dive into what LMCU offers so you can decide if it’s the right fit for you.

What is LMCU?

Lake Michigan Credit Union (LMCU) is a well-established financial cooperative founded in 1933 as a teacher’s credit union. Initially focused on supporting educators during the Great Depression, LMCU has since evolved into a full-service financial institution catering to residents of Michigan and Florida, as well as individuals nationwide who contribute to the ALS (Amyotrophic Lateral Sclerosis) Foundation.

With an A+ rating from the Better Business Bureau (BBB) and Sandra Jelinski at the helm as CEO, LMCU offers a diverse range of personal and business banking services, including lending and investing solutions. The credit union’s physician mortgage program has gained recognition for its innovative approach to addressing the unique financial needs of medical professionals.

LMCU Physician Loan Highlights

LMCU’s physician loan program is designed to cater to the specific requirements of medical professionals, including medical doctors (MDs), doctors of osteopathic medicine (DOs), dentists (DDSs), and doctors of dental medicine (DMDs). The program extends its reach to residents, fellows, and established practitioners, acknowledging the varying stages of their careers.

One of the standout features of LMCU’s physician loans is the flexible financing options available. Depending on the loan amount, borrowers may qualify for the following:

• 0% down payment for loans up to $1 million
• 5% down payment for loans up to $1.25 million
• 10% down payment for loans up to $1.5 million
• 20% down payment for loans up to $2 million

The maximum loan amount offered through LMCU’s physician program is $2 million, catering to the diverse housing needs of medical professionals.

Furthermore, LMCU’s program does not require private mortgage insurance (PMI), even for those opting for low or no down payment options. This feature can result in significant cost savings over the life of the loan.

Is a LMCU Physician Loan Right for You?

Determining whether LMCU’s physician loan program is the right choice for you requires careful consideration of your individual circumstances and financial goals. To qualify for the program, you must meet the following criteria:

Eligible Profession: You must work in an eligible medical field, such as an MD, DO, DDS, DMD, or as a resident or fellow.

Employment Status: You must be currently employed or have an employment contract that commences within 90 days of closing the loan.

Primary Residence: The property you intend to purchase must serve as your primary residence.

While LMCU’s physician loan program has appealing terms, it’s vital to evaluate your overall financial situation and long-term goals. Take a close look at your debt-to-income ratio, credit score, and future earning potential. Make sure the loan matches your financial capabilities and aspirations.

Pros and Cons of LMCU Physician Loans

Like any financial product, LMCU’s physician loan program comes with its own set of advantages and disadvantages. Take the time to really think about these factors to see if this loan fits your unique needs and long-term financial goals.

Pros

• No Private Mortgage Insurance (PMI): One of the significant advantages of LMCU’s physician loans is the absence of PMI requirements, even for borrowers opting for low or no down payment options. This can result in substantial cost savings over the life of the loan.
• Flexible Underwriting Guidelines: LMCU takes into account the unique financial circumstances of medical professionals, offering flexible underwriting guidelines that consider future earning potential and student loan debt.
• Variety of Property Types: Unlike some physician loan programs, LMCU allows financing for condos and 1 to 2-unit properties, as long as the property serves as your primary residence.
• Closing Cost Discounts: LMCU offers a $500 closing credit to physicians who set up automatic mortgage payments from a qualified LMCU account.
• Pre-Employment Approval: You can obtain loan approval and close the transaction before starting your new position, provided you have an employment contract with a start date within 90 days.Cons
• Limited to Specific Medical Professions: LMCU’s physician loan program is restricted to MDs, DOs, DMDs, and DDSs, excluding other healthcare professionals from eligibility.
• Primary Residence Requirement: The loan cannot be used to purchase a second home or investment property, as LMCU limits the program to primary residences to mitigate risk.
• Potential for Overspending: The relaxed guidelines may tempt some borrowers to overextend themselves financially, emphasizing the importance of careful budgeting and financial planning.
• No Cash-Out Refinance Option: LMCU’s physician loan program does not offer a cash-out refinance option, limiting borrowers to rate/term refinancing for existing loans.

Alternatives to LMCU Physician Mortgage

LMCU’s physician loan program is a great choice for many in the medical field, but it’s smart to look at other lenders too. This way, you can find the best terms and rates for your needs. Here are a few other options to check out:

Cadence Bank

Cadence Bank recently merged with BancorpSouth to become an even larger bank than it was before. It still has a limited footprint (southern states) but an excellent doctor home loan program where you can get 100% financing up to $1.5MM. Learn More: Cadence Bank Physician Loan Review

TD Bank

TD Bank’s physician mortgage is a popular choice among LeverageRx readers. The bank provides 100% financing up to $750k for both residents in training and attendings. The loan is for primary residents only. Learn More: TD Bank Physician Loan Review

Truist

Truist was formed through the combination of BB&T and SunTrust. The program provides full financing up to $1MM for the following designations: MD, DO, DPM, DDS, DMD. Learn More: Review of Truist Physician Loan

Make sure to research and compare different lenders to find the best terms and conditions for your financial situation.

Key Takeaways

LMCU’s physician mortgage program is a solid choice for medical professionals looking for good terms and flexible underwriting. With perks like low or no down payment options, no PMI, and the ability to qualify before starting a new job, it addresses many of the common hurdles doctors, dentists, and other healthcare providers face when getting a home loan.

However, it’s important to weigh the pros and cons of LMCU’s program and consider other lenders too. This way, you can find the best fit for your long-term financial goals. Doing your homework and working with a broker like LeverageRx can help you explore all your options and find a mortgage that truly meets your needs as a medical professional.

Remember, getting a home loan is a big deal. Take your time and make sure you fully understand all the options out there. Working with reputable lenders and advisors can help you confidently navigate the details of physician mortgage loans. This will help you achieve your dream of homeownership while keeping your finances stable.