Talking Physician Mortgages with Dr. Juneja and Dr. Shah

Season 1, Episode 13

Listen to an in-depth discussion about the advantages of physician and dentist mortgages, and the unique challenges doctors face during the homebuying process in today’s real estate market.

Transcript

Eric Sutton [00:00:06] Hi everyone, this is Eric and you’re listening to Financing Ambition, a Laurel Road podcast. Today, I’m excited to welcome to the podcast Dr. Sanjay Juneja and Dr. Chirag Shah. Dr. Juneja, also known as the OncDoc on social media, is a triple board certified hematologist and medical oncologist at Baton Rouge General Hospital and is also host of an innovative podcast called Target Cancer. Dr. Juneja, thanks for joining us.

Dr. Juneja [00:00:40] Thank you for having me. I’m so excited. And for everyone listening and looking to learn more, you’re definitely ahead of the curve than I was at your state, so hope you get some good stuff.

Eric Sutton [00:00:50] Excellent. And our next guest, Dr. Shah, is an anesthesiologist at the Edward Hines Jr. Veterans Administration Hospital in Chicago. Prior to his medical career, Dr. Shah worked as an investment banker in New York City. And he’s currently also a licensed real estate broker, where he’s helped other medical professionals find their first home. So we’re thinking he’ll have some great firsthand insights on physician and dentist mortgages for us. Dr. Shah, thanks to you for joining us as well.

Dr. Shah [00:01:18] Thanks, Eric. Really happy to be here. And hopefully we can provide some information to help others.

Eric Sutton [00:01:25] Awesome. And last, but not least, I’m also very happy to be joined today by our very special guest co-host, Laurel Road’s Head of Mortgage, Eileen Derks. Eileen, thank you for joining us for this conversation.

Eileen Derks [00:01:37] Oh, I’m so excited to be here and have this conversation with our peers here and great time to get together and talk, given especially all the air of fear and uncertainty right now around the homebuying process, with rates on the rise and low housing inventory and some markets correcting. I get it. It can be a little disconcerting, but I’m looking forward to coming together as a team today and showing why that doesn’t need to be the case for doctors and dentists.

Eric Sutton [00:02:11] Right. So, you know, we know that doctors and dentists face unique challenges as it is when it comes to homebuying, uncertainty around their location, for example, or length of time in their home. Maybe not being able to buy a home as early in life as they would have liked, or thinking that they may not be able to buy a home as early in life as they would like. All those are factors. So, Dr. Shah, let’s start let’s start with you. Could you talk to us maybe a little bit about the unique challenges that doctors face when it comes to buying a home? And maybe tell us a little bit about what buying your first home was like.

Dr. Shah [00:02:48] Sure, I’d love to. So as the listeners know, doctors, most of us have an inordinate amount of debt after we graduate medical school, which in itself is very scary. And then we take on more debt by having a mortgage. But one good thing with that being you get to build up equity over time. And there’s a product called a physician mortgage in which you can put 0% down, and that’s actually exactly what I did. When I first moved to Chicago for my anesthesia residency, I knew I’d be there for at least four years and if I did a fellowship even longer. So I ended up buying a condo instead of renting. And I was able to do that with a physician loan with 0% down. And then my monthly payment actually ended up being the same as my rent. But the benefit, of course, is that I’m building equity as I pay my monthly, monthly payments. So I think that’s something that we really need to think about. And there’s a lot of ways to calculate what your rent is going to be or what your mortgage payments are going to be. But don’t be afraid. You do have some perks as a physician. You have a very stable job. You have a long term earning potential. So you’ll be in a pretty good spot. Sanjay, did you do something similar when you started residency in Louisiana or what was your experience like?

Dr. Juneja [00:03:59] Yeah. No, I think it’s no coincidence that the wizard that you are is on one side of the conversation here, and maybe mine a little bit more, less educated on the entire process. So what we did, my wife and I were both in med school together. And, so through med school, we were renting for those four years and then when we realized we’d be staying there an additional six years, you know, at that time, hopefully to do three years of residency and three years of fellowship, that’s where I was like, oh, we’re going to do something to make more sense. Instead of paying rent, we’re going to go out and get a house. But I was unaware of some of these products. Ended up finding a loan for a down payment somewhere, which I believe I’m still paying. I need to check. And then that provided a down payment for us. And then and I think we were to get to this. You know, for me in my thinking, I was like, we’re going to be in this house for six years. I was like we, you know we have residency salaries. So I elected, I was like, what was the cheapest thing was that, you know, what’s the lowest interest rate that them to be like a 30 year variable versus fixed? And I was like, well, variable sounds really scary. Even that was a great time at that time that the economy and rates were. And so I was like, I’m on fixed. I want no insecurities on I know exactly what I’m paying, which the very doctor way of thinking. And then the second part was, what’s the cheapest way to do it? You know, 30 years will be the least payment. I’m like, I want that so that I have more money. That’s what I did. And then I had a 30 year fixed rate for six years during a time where the interest rate was like super low and all this stuff. And I’m looking back and I’m cringing a little bit, but that’s how I thought of it. I wanted to pay the least per month and I wanted to have kind of like what I thought was a certainty or not take the liability of a quote unquote variable rate, which is a different time now, and we’re going to get to that. But that’s what I did. And then I end up selling it six years later and it ended up losing value. And so I’m just riddled with poor decisions in the past and only moving forward with the kind of insights like this podcast today.

Eileen Derks [00:05:44] I just have to say, so what I just heard from the two of you, really good. So reflecting on time in your home, how important that is to your decision when it comes to picking a product. You were reflecting on your plans and needs, right, and planning. And that’s really important. And then you just talked about interest rates, right? And so interest rates tends to be an impetus for like, do I move now or not? And, you know, a lot of folks are out there thinking, wow, rates are really high. But you look at even five and 6% rates compared to the eighties and nineties when it was in double digits. So it’s really important, again, in that reflection to say, hey, they’re higher than they were a couple of years ago, but they’re still historically low. And so people shouldn’t have fear about embarking in the homebuying process. It’s really just understanding and reflecting on needs, your timing, and then finding the right product for you.

Eric Sutton [00:06:41] Definitely, Dr. Juneja, it was interesting to hear you talk about sort of, you know, wishing you had known a little bit more about what the adjustable rate mortgage is like. So, you know, Eileen I have a question, how does that mortgage type that fixed rate versus adjustable rate? How should that play a part in your decision in an environment like today’s mortgage environment or, you know, Chirag, if you’ve got something to add. I’m not sure if you are comfortable sharing what type of mortgage you got, whether that was fixed or adjustable. But I’d like to talk a little bit more about that.

Dr. Shah [00:07:13] So I actually got an ARM, which is an adjustable rate mortgage, and there’s various years that it becomes adjustable at, so I got a five year ARM, thinking hey, I’m going to do a four year residency, one year fellowship, then I’m probably going to move out of this little condo if I, you know, I want to have a family or if I want to move into a bigger, bigger situation, or a lot of people don’t stay in the same city where they do residency and their full time job. So one of the thoughts I had was I want to save on my interest rate by doing the adjustable rate initially, knowing that I’m going to move out of this place in five years. As it turns out, I ended up not moving out in five years and ended up refinancing at that point. So I think the average mortgage term is maybe 7 to 8 years, but you’re better off kind of doing that adjustable rate, especially coming out as a physician because most people’s residency is that length of time and then you’re going to switch. So you save the money while you can. Eileen, I’ll let you go ahead and chime in. But I think that’s how I thought about it.

Eileen Derks [00:08:15] It was a perfect way to shape it, right. So first and foremost, let’s understand what an ARM is. It says an adjustable rate mortgage, but it doesn’t mean it’s adjusting this this month, this year. So, let’s just talk about what that means, like a seven, six ARM. So an ARM is really a note of 30 years. And so the first number really reflects the years that it is fixed. Right. So Chirag, you talked about reflecting on how long am I going to be in this home for. And that’s that really important aspect when deciding a product, a mortgage product. So, you were going to be in that home for five years. So if I’m looking for a fixed rate, which gives me more stability in my monthly payment, then that seven-six ARM is going to afford you that fixed rate for seven years. And then that second number, that six, is how frequently it can adjust based on current market rates. So the ARM is very much a great product if someone is looking to move in less than that first number those first years. And so, ARMs tend to be lower rate. And so that’s where, again, Chirag, you saw that as a fit.

Dr. Shah [00:09:32] And Eileen, kinda to go along with that. Banks can give you a lower rate because they’re not locked into a 30 year time period. And if you’re going to move out of your house within 5 to 7 to 8 years, it doesn’t make sense for you to lock it in for 30 years because you’re going to have to get a new loan anyways. So that’s one thing you should be thinking about if it’s not your long-term dream home.

Dr. Juneja [00:09:52] And to that exact point, that’s exactly what I did. I was thinking oh that’s the lowest rate, and that concept for me, on you can refinance at a later time depending on what your current situation is. If you’re a doctor that’s further along and you’re not in residency or fellowship and you’re trying to make investments, that’s how you want to think of it, too. Sometimes it makes more sense to say, I’ve got as much capital now, but I do anticipate capital in the future. And how do you position yourself with these to be able to optimize your opportunity at that time.

Eric Sutton [00:10:18] So in a nutshell, it sounds like to me what we’re saying here is if you don’t plan on being in your home for an extended period of time, ten years plus, an adjustable rate mortgage is something that you might want to look into.

Eileen Derks [00:10:32] Yep.

Eric Sutton [00:10:33] Excellent. And moving on a little bit, what about career stage? Is there, is there an ideal time to buy do you think? You know, for example, Sanjay, you mentioned, you know, having a little trouble figuring out when to get that mortgage earlier in your career. You know, would you advise that people wait until after their residency? Or do you actually think now that folks should be comfortable, residents in fact, should be comfortable doing what Chirag did, for example?

Dr. Juneja [00:10:59] Yeah. I mean, you know, for the same reason, I did get my home before residency and fellowship after med school because I was just kind of adding up how much we were paying in rent over the three years of med school. So one, you want to be one to think about how long are going to be where you’re at. That plays a big role in the way you’re going to go. I did the thing that made the least sense in that scenario, and especially hindsight’s 2020, ended up actually like not making money on that house at all. For some reason that that area depreciated so, for a lot of reasons, it wasn’t the optimum way to do it, but it was still six years that I didn’t end up paying rent, right. So I was still got some return I was paying into principal, but I could have paid into principal so much more if I did a different kind of mortgage and then I was paying so much into interest when I was doing the the 30 year for where I knew, with certainty, I was only going to be there for six years. And and, you know, I think part of it was being intimidated. I’m like, I could sit down and try to learn all this, but I’m also got my step seven whatever was happening at that time. So that intimidation, it really does add up, the cost of it of being too intimidated and saying like, I know I’ll be in a position where at the end of the day it doesn’t matter, it’s actually not that hard. And that’s why we have this podcast, to say like these are the couple of things you need to know.

Dr. Shah [00:12:11] Yeah. I think you said that really well, Sanjay. And I think it’s just important to think about what your goals are. If your goals are to stay in the same city for a long period of time, it may make sense to lock in a 30 year. It may make sense to buy your dream house initially. Again, as a physician or a dentist, the big benefit you have is that you have a long term, stable job, so you’re not really missing out on opportunity cost by putting down a down payment that’s 5%, 10%, or even 0%. So, you have the opportunities, you know to start your own office if you’re a dentist or doctor. So it’s essentially thinking long-term about your career goals when you’re moving to a different city. And you should probably do that every time you move to a new city to make sure that whether it makes sense to buy versus rent.

Eileen Derks [00:12:54] I think what I’m hearing, both Sanjay and Chirag, is the value of talking to a mortgage specialist that understands the physician career and personal journey. And so that’s not a pitch, again, for one lender or another. But if you can align with a mortgage specialist or loan officer that truly does understand that financial trajectory, that uncertainty as far as timing, they can really be valuable in counseling in which products to pick.

Dr. Juneja [00:13:28] How do you even like I would I found one because a lot of times the time stuff is hard with residency because you’re working 7 a.m. to 7 p.m. so like dooms or ideal and all that.

Eileen Derks [00:13:37] Yeah. So Chirag is mentioned often that there’s branding for lack of a better term, in the market of physician mortgages. Right. And you know, really to research that lender to say, hey, is it that they’re just supporting the physician marketplace or do they really, truly understand? That’s what I would say is, do your research, the internet, pop in physician mortgage, dentist mortgage and see who comes up and then reflect. Is that a brand that really has invested in understanding the complexities and inequities of the physician life and, and career journey? And that’s when they can really counsel you.

Dr. Shah [00:14:19] And just to chime in on that, Eileen, three key things you need to look at when you’re looking at a physician mortgage. What percent down are you going to be putting? 0%, 5% all the way up to 20%. Number two, you’re to make sure there’s no PMI, which is private mortgage insurance. And what that means is that if you put down less than 20%, many banks that don’t do physician or dentist loans, they’re going to charge you insurance because there’s more risk, inherent risk in you defaulting. So that’s number two. On the number three, obviously, it goes without saying, is the APR you want the lowest possible. Obviously, look at the ARM options as well as a fixed 30 year or even a 20 year.

Eileen Derks [00:14:56] Chirag talked about APR and I think it’s really important to understand the difference between interest rate and APR and there’s a big difference. And so don’t just hunt to look at what’s the interest rate. The APR is the total cost to borrow. So that includes your interest plus the fees. So really dig in. When you talk with a lender, what are the fees and where can you save? Because that’s what you need to compare is APR to APR, not interest rate.

Dr. Shah [00:15:31] That’s like one of the things people overlook. If you just get a low interest rate, the APR super high and they have a origination fee and they have a X-Y-Z fee, it just adds up really quickly. And then you’re paying interest on all those fees and it’s a big commitment.

Eric Sutton [00:15:46] Okay. So what I’m hearing here is that the career stage doesn’t necessarily play a direct part in how to go about buying a home as a physician or a dentist. But it’s important for physicians and dentists to be aware of all of their options, all of the loan products that are available to them, all of the down payment options or no down payment options, private mortgage insurance or no private mortgage insurance. So just to take the time to do the research and find that lender in that product that is specifically carved out for, for others, or folks in your line of work.

Dr. Juneja [00:16:24] One hundred percent, and I learned some of that the hard way – like that first house in residency in fellowship, like I had a PMI, didn’t know what PMI was, I just I don’t know if I’ll even get the house. That’s most people’s fear is like you have loans and you’re like I’ll just, I’ll just sign whatever like if I can get the home, like with all the loans and no income, I got this PMI on and I got all this stuff. And then when I learned more, for my next house into practice, that was very important. So those three right there, there’s nothing else. That’s number one. And then two is the down payment. But realize I’m going to have a direct effect on the interest of that mortgage you go with. And then number three, I just want to hit again the mortgage specialist thing, because I’ve bought two houses since then and those were physician loans. But I trusted that bank to say what is the best decision for me? But that’s the way you want to think about it step-wise. But it’s not just binary. I have a low income as a resident or fellow and then I have a great income. It’s actually still with the great income, what is your true plan in that first five or six years? And then do you see yourself in a different home even with that large salary as the loans get paid off in a bigger home.

Eric Sutton [00:17:25] Okay. So let me let me transition the conversation into something a little bit different, a different subject, which is really about home value and potential depreciation. I know that’s a fear of of homebuyers, especially in a market like  we’re seeing today. So one thing that we know at Laurel Road from our own mortgage member demographics is that doctors and dentists do tend to buy their first home a little bit later than most people would expect. So the average age is around 35 years old here among Laurel Road members. So besides that, you know, the early costs of medical training and all the things that we’ve already discussed that might contribute to that, it feels like the mortgage market is always shifting. And so I think that might give buyers pause about depreciating home values and so on. So Eileen, from your perspective, what does it mean for physicians and dentists to be a first-time homebuyer right now?

Eileen Derks [00:18:22] Well, I’ll just say it’s all about doing your research. It’s hard when people say depreciation on a home because it’s just correcting over the last five years, particularly during COVID. There’s a lot of mobility. People had the opportunity, rates were low. And so I just warn listeners, too, when we say depreciation, it’s more of a correction and it’s not on every marketplace. And so we might not be seeing such appreciation. The expectation is that it’s going to level out to more moderate like standard, but there are going to be some markets that are going to correct and should correct so that there’s equitably between the buyer and seller market. So it’s really about doing research and then really reflecting, is that where you should be buying or could somewhere in that proximity be a good fit?

Dr. Shah [00:19:13] I couldn’t agree more. I think preparation is the utmost important thing you can do. Hit the three factors. Take a look at the banks and see what they’re offering. Listen to these podcasts. Go and read a little bit about mortgages. It’s such a big commitment, right? At least 3 to 5 to seven years if you do an ARM, 30 years if you’re in your long-term home, it’s worth an hour’s worth of research to make sure that you’re fully aware of what your options are. And a lot of times, even if you have the down payment, you may not want to put it down and do a doctor’s loan anyways, just so you can use that money, that principle you put down and do something else with it. The opportunity cost of putting down 20% is pretty significant.

Eric Sutton [00:19:51] All right. So, speaking of preparation, then, I think that’s a really awesome segue into the next section here of our discussion, which is about logistics. And, you know, you all are talking now about all of the intricate details and considerations around how to go about getting a physician or dentist mortgage. But, you know, speaking logistically, what does it actually take to get the mortgage itself? And I’d love to hear some about what you think people need to know first when it comes to process and what are the steps that we should be following.

Eileen Derks [00:20:24] I call it “the 4 Rs” team and it’s review, reflect, research, and reach out. So, if you’re going to sit down and consider the journey of homeownership, so you think about review, review your credit score, make sure it’s in good standing because your credit score has a lot to do with your interest rate and whether you will be extended credit. Understand your assets right? What funds do you have that you could use for a down payment or closing costs? And as Chirag said, maybe you might not invest that because there’s other opportunities to grow your financial wealth with that down payment. But it’s important to reflect on the assets that you could put towards your home, because the next step of review is your budget. Think about what you think you can afford each month, but talking with a loan specialist will help you get there. But your own sort of assessment of budget is important. The next R is reflect, so what are your needs and wants? You want a big house? Do you need the pool? Do you need the big yard? Reflect on that. Three, five, seven. What is your plan for the next couple of years, you in your forever home? Are you in residency and likely moving? That’s important in your reflection and then your goals, right? So am I going to go back to school? Am I going to invest in something, in a specialty that needs to play into your planning because that obviously affects budget. We’ll go to research, which is, as we’ve said, do your research around your market. Right. Is that market going to have some correction? How does that feel? Where do we think there might be some appreciation in market values where there’s high demand. And then reach out to your existing bank for incentives around mortgages. Do your research around physician and dentist loans, who offers them, who is expert in that space because they’ll be able to guide you and talk to you about the benefits that you’ll get. And then finally I say reach out. I think it’s really important. You’ve done this assessment. You’ve done the homework, as Chirag has said. Now talk with an expert and hopefully an expert in physician mortgages, because, again, they know your trajectory, the financials talk to them, explain your plans. They will listen. There is no cost to do so. And I’ll close with if you’re even thinking about buying a home in six or nine months, get prequalified today. It empowers you to look at homes. It empowers you to make an offer and be in the game.

Dr. Shah [00:22:52] And having that conversation is going to help you at the beginning of your process. Get an idea of what you can afford, what the interest rates are, where you should be looking, and a real estate agent that you’re working with, they’re going to want that anyways when they submit an offer for a house and if you go to get it last minute, you gather all the documents and such and it’s going to take you a little bit of time. The way the market was over the last year, you didn’t have that time. Things have slowed down drastically in the last few months. So I think you could, but there’s obviously no cost to getting pre-qualified. And I think that even if you don’t end up using it, the knowledge you gain from doing that work and putting that time in is going to help you for when you eventually do end up using it.

Eric Sutton [0023:37] And you have an opportunity to educate yourself, you know, about all the lingo, all the words, PMI and APR and FHA and all of the acronyms. And, you know, I think it’s important that that you do take the time to figure out what are those factors and what do they impact.

Eileen Derks [00:23:55] It’s a big decision, right. This is one of the biggest financial investments, other than education. Right. But it’s important and it does deserve that effort to make sure you feel good going into this homebuying journey.

Eric Sutton [00:24:10] For sure, and Dr. Shah as you mentioned, the pre-qualification or pre-approval is, is an excellent way to figure out what your affordability is.

Dr. Shah [00:24:20] And every time you jump into something like that, you’re going to learn something. So again, even if you don’t use it, you learn something and you’re going to build on your knowledge base. Just like in medicine, when you repeat any procedure or any activity, you get better at it. You should do this two or three times because it’s such a big investment. It’s one of the biggest investments you’ll make other than your education, like Eileen said.

Eric Sutton [00:24:37] And maybe, Eileen, if you wouldn’t mind, just giving us a very quick explanation of the difference between a prequel and a pre-approval.

Eileen Derks [00:24:45] Sure. A prequel versus a pre-approval tends to be where a prequel is unverified. We haven’t gone through and verified your income. We haven’t verified your assets. So there’s a soft credit pull that makes sure you’re in good credit standing and essentially saying to you, hey, you know, based on what you’ve said and if it was able to be validated, we would extend you credit conditionally defined, whereas a pre-approval goes a bit deeper. There’s more of that hard credit pull, there’s more of the verification. So that’s where Sanjay was saying, you know, getting your ducks in a row, getting all your documents and getting to that place of pre-qualified pre-approval based on where you’re at in the journey makes a lot of sense and can save you time and really accelerate your ability to buy a home because you’re already three steps ahead in that lender commitment.

Eric Sutton [00:25:42] That makes a lot of sense. Thanks for that clarification. And what about rate lock, which is a term that we hear thrown around? Maybe explain a little bit about just your traditional conventional mortgage and what rate lock means.

Eileen Derks [00:25:54] So we’ll keep it high level. Eric. So almost every lender allows you to just lock in a rate for a period of time. If you’re looking to extend that lock rate, then there tends to be a fee associated with that. And the reason being is in an extended lock period, rates can go up, right? So there has to be sort of a give and take to protect the consumer. But the cost of funds to the bank goes up and they’ve committed to you at a certain rate that there’s some give and take. So in summary, there’s an initial lock period. If you’re looking to extend, there may be an investment on behalf of the borrower to say, hey, I’ll pay up a little bit of this fund ahead of time to keep this rate and protect myself.

Eric Sutton [00:26:37] All right. That makes sense. Very helpful. I feel like I’m learning even more about mortgages than I’ve already been exposed to here at Laurel Road, and I wish I had known it when I bought my first home. But okay, so listen, very helpful information and very helpful advice recommendations from all of you. Thanks so much. Our time is, is almost coming to an end here. I’m just hoping we might be able to wrap up by visiting what I’m sure is a really important topic for our listeners, and that is student loan debt. Obviously, that’s a huge concern for physicians and dentists and it can impact, you know, a lot of factors like affordability, as we’ve talked about, and even credit score. So how would each of you say student loans or med school loans factor into the homebuying process for doctors?

Dr. Juneja [00:27:26] I would say I’ll start with that. I’ll say I was probably more intimidated about it than I should have been. You know, we actually did forbearance. We talk about it on a different podcast, and that’s a really good one that I would also wish I had. And my wife and I, you know, we both triple specialized. She got a master’s before that, so we had a lot of accrued debt. Now, granted, our income was healthy as well, but it, it didn’t play as big of a part as I suspected. So don’t let that scare you away. I guess the first thing, number two, with your credit score, you know, lately in the last six months with the two homes, a lot of renovations and a whole bunch of expenses, like I still was paying my full credit card amount like every month and my score was still down and I was like, how’s this happening?

Dr. Shah [00:28:11] And some of that comes down to credit equalization, Sanjay. So, if your credit card limit is 20,000 and you’re using 19 or 18,000. Your scores are going to go down. And then back to the loan portion. I, of course, have large student loans, as you heard in the podcast prior, same as Sanjay. I actually think about them as investments, right? With my student loans, I got my M.D., I got my bachelor’s degree. With my mortgage, I’m going to have an actual place that I can live in, something tangible. So I really don’t worry about it too much. If a bank is willing to lend me money at a good interest rate for something tangible that I’m getting value from. That’s fine, but you just have to make sure that you can pay off what your monthly payments are going to be and that your income is able to keep up with whatever you’re purchasing. So lifestyle creep, I know it’s a very real thing. And I know, Sanjay, you’re passionate about that. You know, staying within budgets, especially as you’re a young physician or a young dentist, you’re going to be able to afford something drastically different than when you’re established physician in mid-career to late career. So that’s something to keep in mind. Just because someone will give you money and they think you can pay it back doesn’t necessarily mean you can, although I’m sure you’ll be able to just be really cognizant and careful of that.

Eileen Derks [00:29:19] Chirag I couldn’t underscore that anymore. Live within your means. It’ll pay dividends long term.

Dr. Juneja [00:29:25] And one comment to that, is this concept of like it’s actually called the hedonistic treadmill. Like that lifestyle, yes you may be able to afford it once a month, but the question is, can you have a lapse? What is the cushion you have in a lapse of that month-to-month income? And will you be in a bad place? Because if the answer is, I can’t go two or three months, you know, and I don’t mean some devastating injury. I mean, for whatever reason, whether switching jobs or hospital gets in trouble, I mean, things that are totally out of your control, that’s a very uncomfortable position to be in. If you decide three years into your practice like this is not the kind of lifestyle that I want. I’m working really hard to make lot of money. But then now you’re under the pressure of, but unless I have a transition in place at the same sum, and you know, I can’t go more than 60, 90 days. You can afford that lifestyle by some, you know, some metric. But the other one is, you can’t get off that setting on the treadmill.

Eileen Derks [00:30:15] We’re moving outside of mortgage, for sure. But what you’re talking to, Sanjay, is making sure there’s reserves, that if there’s any disruption to your income and that’s the age-old rule, always have at least 3 to 6 months of your total monthly liability in reserves in the event of emergency. So just public service announcements, right?

Eric Sutton [00:30:35] No doubt. Excellent recommendations. Thank you very much to all of you for those final words of wisdom. And thank you, Eileen and Dr. Shah, Dr. Sanjay Juneja, for sharing your valuable time with me and with our listeners today.

Eileen Derks [00:30:51] Thanks, everyone.

Dr. Shah [00:30:52] Thanks.

Dr. Juneja [00:30:52] Thank you all.

Eric Sutton [00:30:53] To find more financial resources on physicians and dentist mortgages and other topics for doctors, visit Laurel Road-dot-com-slash-doctors. And as always, thank you for listening to financing ambition.

Disclosures [00:31:13] Any opinions, findings and conclusions expressed in this podcast are those of the participants and do not necessarily reflect the views of Laurel Road. In providing this information, neither Laurel Road nor KeyBank nor its affiliates are acting as their agent or as offering any tax, financial accounting or legal advice. Our guest, Dr. Sanjay Juneja and Dr. Chirag Shah have promoted Laurel Road and have received compensation for their time. For more information and full disclosures, go to Laurel Road-dot-com-slash-doctor-home. Laurel Road is a brand of KeyBank and a Member FDIC and Equal Housing Lender and NMLS number 399797.