What Are Home Repair Loans for Physicians?

With mortgage rates touching 7%, buying a home that’s in a good location but needs some repairs may be your only way to home ownership. Home repair loans can help you turn a worn-out house into a beautiful home.

Unfortunately, finding home repair loans that offer reasonable terms, competitive interest rates, and trustworthy lenders can be few and far between.

Let’s analyze what to look for in a home repair loan and see all the options you’ll have at your disposal.

When Should Physicians Go for a Home Repair Loan?

Here’s when you might need to opt for home improvement loans:

1. When You Need to Make Costly Repairs

As a physician, you may not have enough saved up to manage unexpected issues like burst pipes, leaking roofs, or broken HVAC systems out of pocket.

A repair loan helps you offset some of the immediate costs when you’re in a jam and pay it later.

You can also use this loan to pay off expected repairs like repainting your home, replacing your old windows for better insulation, or remodeling your kitchen.

2. When Renovations Can Increase Your Property Value

If you want to make strategic upgrades to your home to increase its value, repair loans can be a big help.

Let’s say your listing agent recommends revamping your living room’s lighting setup.

A home repair loan can help you get the expensive wiring and light fixture costs off your back, and you can pay the labor costs.

This way, you aren’t hit with a huge bill that you might not have the funds to pay, especially if you’re in debt.

3. When Insurance Doesn’t Cover Repairs

Sometimes, your insurance may not cover your repairs because of wear and tear, “non-covered” costs, or too-high deductibles.

Covering this unexpected bill out of pocket can set you back on other priorities like student loans, mortgage payments, or medical license fees.

Home repair loans help you access the funds you need to fix the issue right away.

Types of Home Repair Loans Available to Physicians

Here are five types of home repair loans that you might come across:

1. Physician’s Loans

Doctor’s loans are designed specifically for medical professionals and often come with lower interest rates, higher borrowing limits, and flexible repayment terms.

If you have high student loan debt or are just starting your career, these loans can help you access the funds you need without having to meet stringent requirements.

2. Personal Loans

Personal loans are usually unsecured, meaning you don’t need to use your home as collateral when getting these.

If you have a good credit history and a high income, you can usually qualify for personal loans with competitive interest rates (usually variable) and quick approvals.

This makes them great when you need to make quick repairs.

3. Home Equity Loans

A home equity loan comes with fixed payments, usually has a fixed interest rate—lower than many other loans—and lets you borrow a set lump sum for 5-30 years.

This makes it great for major renovations like lighting upgrades, deck reconstruction, etc.

You can qualify for this loan if you have enough equity built up in your home.

This is based on your combined loan-to-value (CLTV) ratio. The higher your home’s value, the more you can borrow.

However, if you can’t pay your loan, you may lose your home.

4. Home Equity Line of Credit (HELOC)

A home equity line of credit is a revolving credit line that lets you take money out to a specific limit, repay your loan, and then withdraw money again.

Like home equity loans, this is secured based on your home equity.

Unlike home equity loans, a HELOC usually has a variable interest rate, which makes it harder to budget because your monthly payment may unpredictably change.

5. FHA 203(k) Loan

An FHA 203(k) is a single, long-term, fixed-, or adjustable-rate mortgage that combines financing for a home purchase and the cost of necessary repairs or renovations.

It’s only eligible for homes that will be your primary residence.

When you take out an FHA 203(k) loan, the funds allocated for repairs are placed in an escrow account and disbursed to FHA-approved contractors as the work is completed—which should be completed within six months.

Factors to Consider When Choosing a Home Repair Loan

If you’re thinking of getting a home repair loan, here are five considerations to keep in mind:

1. Eligibility Requirements

Lenders often have specific criteria you’ll need to meet, such as a minimum credit score, income level, home equity, and residency year.

As a physician, the certainty of your income will work in your favor, but if you have high student loan debt or a new mortgage, that might limit your loan pool.

In this case, you’ll need to look for loans specific to your circumstances.

2. Loan Interest Rates and Terms

Your interest rate and terms will depend on the type of loan and lender you go with.

If your loan has a fixed interest rate, you’ll pay that specific amount over the life of the loan.

But if it’s variable, your payments may start low but could increase over time.

As a physician, try to look for loans with flexible repayment options. It’s okay if they have a variable interest rate—you could always refinance the loan later.

3. Loan Amount and Project Scope

The scope of your project will decide the loan you need.

If you’re looking at a $30,000 kitchen remodel with new countertops, cabinetry, and appliances, you’ll need a loan that covers as much of that amount as you can’t pay.

To get an idea of how much you’ll end up paying, ask your contractor for an estimate.

Always keep in mind market fluctuations because prices of items can go up or down, so you want to end up a little over budget but not borrow too much.

4. Repayment Flexibility

As a physician, it’s almost guaranteed that you’ll have an unpredictable schedule, with some working days starting as early as 2 AM.

Your income may also be unstable, especially if you’re moving to another state or working locum tenens.

If you relate to this, look for loans that allow you to make early payments without penalties or offer grace periods if you end up late.

5. Lender Reputation

Not all lenders are reliable, so make sure to research every offer you come across as deeply as possible to get the best deal.

This means looking at the lender’s policy transparency, customer service, and customer reviews.

If you need a starting point, we’ve put together a list of the best mortgage lenders to help you make an informed decision.

The last factor is the most important one.

If people don’t say good things about the lender on public forums or specific issues pop up every time people use their service, you might want to check twice and walk away if you aren’t satisfied.

Get the Home Repair Loan You Need With Physicians Thrive

Homeownership is expensive, and the costs can become almost impossible to bear when you add in repair costs for older homes.

Home repair loans help you get around this issue by giving you access to funds that you can use now and repay later.

If you’re looking to find a repair loan that you could use to fund your home improvement project, we can help you out.

At Physicians Thrive, we help physicians understand their loan eligibility, find home repair loans with terms that will work for them, and get funding without messing up schedules.

We know how busy you are, so we get everything done for you.

Want to learn how we can help you get the home repair loan you need? Give us a call today!