JD Mortgage loan give lawyers the chance to own a home with little or no downpayment. JD home loans attracts high interest rates because you either pay a small amount or nothing at all for downpayment.
Every year, we have many student graduating from law and it’s is likely that most of these students have debt or defaulted on loans. Due to this state, it’s difficult for them to apply for mortgage loans that demand high downpayments.
JD mortgage loan is available for fresh graduates from law school who are thinking of buying a home. As long as you are eligible to be a professional lawyer, you can access this loan.
How JD Mortgage loan works
JD mortgage loan is designed specifically for lawyers who wants to purchase a home. This form of loan has several features which include;
- There is little or no money down (this ranges from 0-10%).
- Borrowers are not required to purchase mortgage insurance (PMI).
- The lawyer may be required to open a bank account at the bank that is providing the mortgage
- It has same interest rate regardless of whether the loan is above or below the “jumbo loan” limit.
- May allow you to use gift money for the (i) down payment, (ii) required reserves or (iii) closing costs.
- Requires cash reserves equivalent to a few months of principal, interest, taxes, and insurance (PITI), a reasonably good credit score, and a debt-to-income ratio of less than 38%.
- Sometimes doesn’t calculate student loans toward the loan-to-income ratio or is willing to use a modified payment in the calculation similar to Income Based Repayment / REPAYE calculation.
- Alternative JD mortgage loans
Conventional mortgage loan with 20% downpayment – You can get a mortgage loan as a lawyer if you can make 20% down payment. This will come with less interest rate but you will have to purchase a private mortgage insurance.
Conventional mortgage loan with less 20% down payment – This is the opposite of the first. This loan will attract high interest and fees.
FHA Loan – This loan is a mortgage that’s insured by the Federal Housing Administration (FHA). FHA loans allow you to buy a home with as little as 3.5% down payment.
VA Loan – You can get VA loans with no downpayment but comes with high interest rate.
