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New home loan program especially for physicians
In our ongoing efforts to recruit and retain the best and brightest physicians for our community, Montage Health Foundation is now funding a home loan program as part of our broader physician engagement efforts. Think of it as an investment in Montage Health’s future, as well as your own.
The loans will be second mortgages on new homes for current medical staff who were not covered under a Montage Health recruitment agreement. The loans will be determined on a first-come, first-served basis, and Montage Health reserves the right to limit loan issuances should demand exceed allocated resources.
Essentially, a physician looking to buy a new home will still secure a primary loan from a lender. Then, that physician can cover some of the down payment by using the Montage Health “second” for up to 15% (no more than $300,000) of the purchase price.
Here’s an example
Judith, a general surgeon on staff at Community Hospital of the Monterey Peninsula, has her eye on a $1,800,000 house. She will likely need to come up with 20%, or $360,000, as a down payment. If she qualifies for the Montage Health “second” loan, she will only need to come up with 5%, or $90,000, because the Montage Health loan provides the other 15% (up to $300,000). So, after putting up her own $90,000 and borrowing $270,000 under the Montage program, Judith’s primary loan is now $1,440,000 and her second loan is $270,000.
Judith will secure her best interest rate from her primary lender, and the Montage Health loan will be issued at the Wall Street Journal Prime Rate plus 1.25%. Today, that rate would be 4.5%.
Judith will make monthly payments on both loans. On the Montage Health loan, Judith pays interest-only for the first five years. With today’s rates, that’s about $1,013 a month. After the first five years, and for the next 10, that increases to $1,368 a month as the payment includes principal. At the end of 15 years, Judith will have a “balloon payment” of the balance of the Montage Health loan, about $216,000. Typically, someone who has a balloon payment refinances their mortgage at that point rather than paying off the balance. To note: At any time during the 15 years, Judith can pay more than the minimum payment with no penalty.
The Montage Health second loan program is available to current medical staff only.
Criteria for current medical staff:
- On staff at Community Hospital for a minimum of 1 year
- Cannot be used to purchase a second home
- Must have a full-time practice locally and not have a restrictive non-compete covenant with a contracted group
- Must be in good standing
- Must qualify for the loan
- Must not have already received a physician recruitment package
You can also find information about more of the foundation’s physician engagement opportunities here.