Three Critical Pitfalls of Physician Mortgages

We know physician loans!

If you spend a few minutes in physician chat rooms where the topic focuses on mortgages, you’re more than likely to read nightmare after nightmare and horror story after horror story. It’s so devastating to see what happens to a crushed home loan and what closing can do to a family.

One time out of the blue, we received a call from a young resident while he was relocating to Utah. The gentleman was working on a home purchase for two months and he was called the day before his closing and two days before he anticipated moving into his home with his wife and two kids.

They were literally driving across the country in a U-Haul truck, and told they were declined for their mortgage loan. He was wrecked. He did not know how to respond to that. He couldn’t believe that he could get so deep into a transaction, supposed to have his keys the next day, and move into his home, and at the last minute he was declined.

What we found out is that the loan officer had failed to realize that he had about $170,000 in student loans and they all showed a zero payment. The loan officer made the mistake of just excluding all of that debt from his debt-to-income ratio. When the loan finally made its way to an underwriter, the underwriter had not made the same mistake and eventually declined the loan.

Explore with us three pitfalls that you can implement today in order to make sure that this doesn’t happen to you.

Read the full article by clicking here.

By Dave Denniston, CFA and Josh Mettle

We love happy clients!

We know physician loans!

Thanks to our clients to take the time to let us know how we are doing and what we can improve. We’d love to hear from you!

“Today we were able to close on our home and sign all the documents. I just wanted to say thank you to everyone involved. Mostly to Brandon who admittedly considered buying a room size white board to make my loan happen ever since our first communication clear back in December. I’m sure my phone calls were not always the most pleasant and full of questions, but Brandon was nothing but pleasant and professional throughout. I also want to thank Josh for stepping in at the end to make sure we got this done. Once again, thank you from both me and my wife. Good luck with the other 100+ closings this month.”
Eric Lindley, MD, Interventional Cardiology Fellow 2014-2015, University of Utah Medical Center Division of Cardiovascular Medicine

“I have confirmed from my account today that the refinancing process is over and both of my BBVA compass Bank mortgages are paid off. I want to sincerely thank you for all the things that you have done for me and for your time and energy. This was a long process for the reasons that are obvious to you; however we arrived to finish line. It was certainly a great pleasure with you and I appreciate your professionalism and your knowledge. Hopefully in the process I did not stress you too much, as time to time issues came up. Some of it is my meticulous nature, so hopefully no hard feelings! I will definitely refer anybody to you that I know who needs a mortgage/refinance. You know where I am in California, if you happen to visit please let me know.”
Dr. Serhat Aytug, Physician, St. Jude Medical Center

Where do most millionaires make or hold most of their wealth?

Click here to watch on YouTube.

Eric TaitEric Tait:  Getting to business school, I kind of took my first financial accounting course. Enron was a big company here, a big company in the world. Doing their books, we found out about a year before they collapsed that they really weren’t making any money from operations. That kind of set me on the pathway of trying to find a different way to invest my own personal money.
I didn’t start out saying, “Hey, I was going to go out there and create an investment firm and have other investors.” It was really a quest to place my own dollars to begin with. Then it just so happened once we started doing it, we had other physicians who wanted to align with us. Getting to the real estate path when I was in business school and in residency, I just looked at many, many different ways to try to create income whether it be trading stocks to maybe kind of long-term buy hold person or looking at franchises, all of them required active, everyday management to really stay on top of it.

What I found with real estate was you could decide to do that if you wanted to or you could bring in professionals to do that for you. Then also in looking at it, I just asked the basic question: where do most of the world’s millionaires and billionaires even make or hold most of their wealth and it kept coming back to real estate. I’m not that bright a guy, so I just said I’ll just copy and follow instead of trying to create something out of whole cloth.

Josh Mettle: I think that’s the brightest kind of guy.

Please visit to listen to the full episode and read the full transcript.

Eric Tait, MD, MBA – on our podcast

VAM3Tune in to listen to Eric Tait, MD, MBA founder and senior fund manager at Vernonville Asset Management as he talks about alternative investments as well as:

  • why he started his investment firm
  • the reasons he likes investing in real estate
  • where he feels physicians payment model is heading and why he feels creating passive income is crucial to stress levels and quality of life for doctors
  • his formula to see if a property is a good investment
  • the difference between price and value
  • what the 1 percent rule is
  • an equation to determine what you should pay for a property

Josh Mettle: Hello and welcome to the Physician Financial Success Podcast. My name is Josh Mettle, and this is the podcast dedicated to advising physicians how to avoid financial landmines. Today, we’ll be talking with Dr. Eric Tait, practicing internal medicine doc and alternative investment expert. In addition to earning his MD, Eric also earned his MBA in Entrepreneurship from Rice University. He is the founder and senior fund manager at Vernonville Asset Management. Beyond practicing medicine, Eric has analyzed, purchased managed, and developed numerous income-producing investment projects both domestically and now internationally.

Eric, I’m really excited for today’s show. Thanks for your time. How are you doing this morning?

Eric Tait: I’m doing great. Thank you for having me on.
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This is the most crucial part of a doc’s employment agreement

Josh talked to Dennis Hursh, a physician focused attorney about employment agreements on our podcast. Here is a short clip about the most crucial part of a physician’s employment agreement:

Josh Mettle: Okay, so this is one that I would guess 99 of the physicians miss and you mention that the restrictive covenant is one of the most important aspects of a physician employment agreement. Can you tell us what we need to know and what the risks are that surround this area of the agreement?

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If you can, buy now. Mortgage rates expected to rise!

One of the biggest questions plaguing the current housing market is where mortgage interest rates will be at this time next year. Over the last two months, rates have begun to creep up (see chart).


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Dr. Doug Carlsen – 3 Major Keys to Wealth

Josh Mettle:  Let’s talk about the article, Retire by 50, which I loved, and I’d like to dig just a little deeper into that article. In the article, you examined three major keys to wealth. Would you mind explaining those three keys to us?

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Home as an Investment: The Role of Price Appreciation

The dream house 27In our post “Does Homeownership and Real Estate Investing Make Sense Financially?” this week, we shared 5 data points, which we believe indicate real estate is going to be MUCH stronger in the next 5 years than many people think. The following post from KCM Blog supports what we’re saying.
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Does Homeownership and Real Estate Investing Make Sense Financially?

IMG_3356_1_11_1_90There is nothing like spring soccer season to get you ready for the warmth of summer. This year has been dreadfully wet and rainy – however, I think the parents are the only ones who notice or seem to care. Aria (now 3 ½) and Zander (now 5 ½) are having great seasons. Aria has turned the corner and is now totally involved in the game, a major improvement from her 2014 daisy picking year. Z-Man is IMG_3337_10becoming a little super star, he plays on two teams now, one with kids ages 4 to 5 and the other 6 and 7 year olds. He dominates his age group, regularly scoring as many as 6 goals a game. His challenge this year has been to ramp up his aggression with the older kids, he’s working on focusing on the ball and to attack the ball before the older boys. What a journey this kid thing is; I’m personally grateful to be along for the ride.

Speaking about journeys…

We have seen a remarkable turnaround nationally in real estate since the 2006-2010 crash. In 5 years, most areas of the country have completely recovered and median prices are at or near all-time highs again. Who in the world would have predicted that in 2010? Nobody! Not a single analyst that I’ve read called that one right, which tells me we need to be doing a lot of thinking for ourselves and a lot less listening to the talking heads in the media.

Today I’m going to share with you 5 data points, which I believe indicate real estate is going to be MUCH stronger in the next 5 years than many people think. Just like the real estate forecast from 2010, I believe most analysts are under forecasting the real estate growth that is ahead of us in the next 5 years.

Let’s get started!

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Importance of Paying Yourself First

podcast 3 iTunesJim Hemphill and David Burd, authors of Changing Outcomes: A Financial Recovery Strategy for Peak Career Physicians, as well as Pay Yourself First: A Financial Guide for Doctors Entering Practice talked to Josh Mettle on our Physician Financial Success podcast about the importance of paying yourself first. Please listen in!
Click here to listen to the interview

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