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About to Graduate Med School with 620 Credit Score- Should I Apply for a Interest-Only Mortgage as a First Time Home Buyer?

Would an interest-only mortgage be a good choice for me when trying to purchase my first home? I'll be graduating from medical school soon and I want to start the search. What qualifications are necessary and are there better alternatives to the interest-only option? by McGleamy775 from Chicago, Illinois. Jan 20th 2017 Reply


Michael Ruffalo (mruffalo)
#1 ranked lender in Illinois - 6 contributions

First of all, the answer for interest only or not interest only is always it depends on your goals / objectives. However, you are not likely to qualify for most interest only products if your FICO is a 620. With your FICO score, you have to look at that along with your down payment amount to see what type of loan will get you the best payment (if it is conventional or FHA). So, a lot depends on the specifics of your situation.

Jan 20th 2017
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Sara Deere (SARAinMO)
#1 ranked lender in Kansas - 504 contributions

I would look into an unique home loan program especially for doctors and also an FHA loan program. 620 is a low score for some Conventional programs, but would qualify for an FHA programs. Normally after you graduate from medical school, one is not allowed to close on a home loan until after at least 30 days at your future paying medical job. I am able to help people with their residential mortgage needs throughout IL, KS, and MO.

Jan 20th 2017
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Larry Gray (lgray_312_247)
#566 ranked lender in California - 1,127 contributions

Sara Deere addresses an opportunity you might take advantage of. Ask mortgage brokers in Illinois if they can do the special loan afforded to not yet graduated Doctors to be, interns, and residents. I do them in California but not Illinois.

Jan 20th 2017
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Mike and Jill Kohler (LenderMike)
#31 ranked lender in Pennsylvania - 56 contributions

Your best option would be to call a mortgage broker in Illinois. They are going to be more up to speed with the options avaliable in your state. There are definitely programs out there, but you may very well need to start your job before qualifying. I would also suggest looking at your credit report and see if there is anything glaring on it that you could fix or pay to help improve your score. 620 is low for qualifying purposes, so anything you can do to increase your score will help you.

Jan 22nd 2017
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