In keeping with our recent focus on blogs about professional loans, this week we’ll introduce lawyer mortgages. Also known as JD mortgages or attorney mortgages, lawyer loans are a special type of home financing designed with lawyers in mind. These professionals, especially new lawyers, often face challenges while searching for mortgages because they have substantial debt from law school and minimal full-time employment history. At First Financial Bank – Bill Lavelle, we work with attorneys in Columbus, Dublin, Powell, and Cleveland, OH, to help them find home financing that works for lawyers. Read on to learn more about lawyer mortgages and call us to schedule a free consultation when you’re ready.
Getting a Mortgage with College Debt
When lawyers graduate from law school, the vast majority have at least some debt from their graduate and even undergraduate education. When people apply for home financing, lenders are wary of financing applicants with substantial debt and debt-to-income (DTI) ratio. In the years after graduating from law school, many attorneys have a high DTI because of their school loans, despite the high earning potential that lawyers have. When we look at financing options for these professionals, we take into consideration that DTI may temporarily be higher than for applicants in other professions and even calculate it without including college debt.
Down Payment Flexibility
Many lawyers are unable to raise the cash required for many traditional home loans, which often require at least 20% down. JD mortgages loans are more flexible when it comes to down payments, some requiring no money down at all. Attorneys have great earnings potential, which adds a level of security that they will not default on their loans. If a down payment is required, attorneys may be able to use a gift from a friend or loved one to cover the down payment cost.
Jumbo Lawyer Loans
Because they are likely to have high income, many attorneys choose to purchase high-value homes. In Franklin County, loans that exceed $424,100 are known as jumbo loans. Typically, jumbo loans have even more strict approval requirements in when it comes to employment history and DTI than conforming loans (those less than $424,100). For attorneys, because of reasons we’ve detailed, these eligibility requirements could be bad news. Luckily, lawyer mortgages don’t have these same requirements, and most attorneys are just as eligible to get approved for jumbo loans as they are for conforming loans.
If you’re an attorney or soon-to-be attorney in Columbus, Dublin, Powell, or Cleveland, we’d love to help you find home financing that works for you. We work with top lenders across the country to offer the most competitive rates in the area. Contact First Financial Bank – Bill Lavelle with questions about lawyer mortgages or any other related topics and get a free quote today.