SHOULD
I DO
0% DOWN?

One of the biggest marketing strategies for physician loans is their 0% down program. Most physicians coming out of medical school with no savings because the rigors of third and fourth year rotations makes it nearly impossible to hold a job outside those responsibilities. Other healthcare professions have similar issues with their clinical rotations excluding them from having a job. For many medical school graduates, residency is the first income-producing job these physicians have had in 4+ years. The 0% down program is a great way to help residents, new attendings, and other newly graduated healthcare professionals get into a home years earlier than they otherwise might have. The rate difference between the 0% down and the 3-5% down physician loan programs is usually about 0.25% difference. So because you are a little more risky they mitigate that risk by charging you higher interest. People who do 0% down only pay loan closing costs to get into a home.

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Depending on what your investment goals are, your student loan repayment goals, and investment property goals are will depend on if 0% down is right for you. Compare what the current market rate is for a mortgage, and see what the interest rate is on your debt or what ROI you can get on other investments.

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When we bought our first home we could have put 10% down. We chose to do the 0% down route because rates were 2.875 % for a 30 year fixed mortgage at the time. Our student loan debt was at 6.5% and we had a goal to pay that off. So we paid off debt with our "down payment" money and still got a great rate on a mortgage. If interest rate on the mortgage would have been 7% at the time, we may have chosen to put the money at the higher interest debt.