A 10.01 percent down payment on a jumbo home loan with no private mortgage insurance required – sound far-fetched for your clients? Not if they’re doctors who completed their residency within the last three years or medical school residents with less than six months left in their residency.
Wells Fargo Home Mortgage launched a new program in December to help this very specific niche market purchase a home sooner than they may have anticipated with a low down payment for loans up to $850,000.
Why new doctors and medical students? Wells Fargo decided to direct this initiative towards those in the medical profession because about 16,000 people graduate from medical school annually, according to the Association of American Medical Colleges, and the bank recognized this as an opportunity to enhance its product line. In addition, in the medical field, there is a low risk of a doctor being unemployed or under-employed – other niche professions, such as attorneys or law students, don’t have a similar guarantee of future employment or income.
“We simply gauged medical students’ and recent graduates’ needs. We are looking to help our clients achieve their financial goals, and this is one way we can do so,” said Lane Sears, Branch Manager of the Wells Fargo office at 980 North Michigan Avenue in downtown Chicago. “Each of our mortgage offices is employing strategies to promote this product in the local markets. Hospitals and medical schools are a natural fit for the program.”
Residents with less than six months left in their residency are eligible as well. However, their eligibility is contingent upon presentation of a fully executed employment letter demonstrating that they have accepted a permanent position. Income from the permanent position will be used to calculate debt ratios, and fixed rate and adjustable rate mortgages are also available for participants.
“The ability to put down a 10.01 percent down payment without PMI is very unique in today’s marketplace. It is one of the strongest benefits of this program,” Sears said.
The program is the first of its kind for Wells Fargo, and the company is actively monitoring its success rate. Sears reports that the initiative is on track with projections so far. Once the allocation of funds has been reached, the possibility of future funding to continue the program will be considered.