Physician Loan Review of Liberty Federal Credit Union

After going through medical school and getting a degree in a healthcare field, there’s a good chance that you might have a high amount of student loan debt, limiting traditional mortgage options due to your debt-to-income ratio and difficulty in saving up for a down payment.

However, some financial institutions, like Liberty Federal Credit Union, offer access to special programs with more flexible underwriting and credit history requirements. Here’s what you need to know about Liberty FCU’s physician mortgage loan program.

Liberty Federal Credit Union physician mortgage loan details 

Liberty FCU was founded in Indiana in the mid-1930s in the wake of the bank failures that led to the Great Depression. Originally designed to represent educators, the credit union has since expanded its field of membership. It’s currently mainly concentrated in areas of Indiana, Kentucky and Tennessee.

Liberty Federal Credit Union offers physician mortgage loans to various fellows, residents and practicing physicians, including doctors, dentists, optometrists, pharmacists and others. It’s part of NMLS, meaning it meets applicable state licensing program requirements.

Minimum down payment	0% on up to $970,800
Residents or fellows allowed	Yes
Maximum loan amount	$2 million
Degrees that qualify	MD, NP, OD, DDS, DVM, PharmD and DO
Eligible states	IN, KY, TN

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Liberty FCU physician mortgage loan: Pros and cons 

As someone with new money fresh from a residency or fellowship, it can be difficult to meet the requirements of a conventional mortgage. This is where doctor loan programs can help. Liberty Federal Credit Union offers its own program, which can be seen when you visit libertyfcu.org.

Before getting any program, though, it’s important to understand the pros and cons involved. Here are some things to consider when researching Liberty FCU. 

Liberty Federal Credit Union physician mortgage loan pros

There are special financing options available for those who have degrees as physicians, including for fellows and residents.

Up to 100% financing

Liberty FCU offers a no down payment option on a home purchase price of up to $970,800. Additionally, there are low down payment options of 5% and 10% down for homes of up to $1.5 million and $2 million, respectively.

If you’re trying to figure out what your payments and interest rates might be, based on down payments, you can go to libertyfcu.org/mortgagecalculator to run the numbers on a sample principal. 

Interest rate reduction

It’s possible to get lower interest rates by opening a checking account and getting a debit card at Liberty FCU. You can get up to 1.8% lower in APR with the help of this account. This can lower your interest payment, as well as your overall mortgage payment.

There are also various loan rates based on your credit history and different products. You can get a Liberty FCU fixed-rate loan or compare Liberty FCU adjustable-rate mortgage products to see what might work best for your situation.

Liberty FCU also has a 680 minimum credit score requirement, which is different from the usual 700 required by many doctor loan programs. However, this could lead to slightly higher interest rates, even with the reduction.

No PMI

Many physician loans don’t charge private mortgage insurance (PMI), and Liberty FCU is one of those programs. Even if you don’t put 20% of your purchase price down, you can still avoid PMI related to how much home equity you have with a Liberty FCU physician mortgage.

Use a physician mortgage loan calculator to see what makes sense for you in terms of getting a bigger loan without the need for PMI.

Liberty Federal Credit Union physician mortgage loan cons

When reviewing mortgage loan originators, it’s important to consider the downsides. Make sure to figure out whether the advantages outweigh the downsides.  

Small down payments can lead to higher monthly payments

Doctor mortgage programs offer the ability to get a larger house than you might otherwise be able to get with a conventional loan. However, this can cause problems during repayment. You might have higher monthly payments and feel house poor. A higher interest rate might also be the result of a smaller down payment.

Reserve requirements

On both existing homes and construction home loans, Liberty FCU has reserve requirements. Even if you can access a low down payment, you might need to prove that you have a certain amount in reserves. This can limit your ability to qualify for a higher loan amount.

Limited availability 

You might not be eligible for a mortgage loan from Liberty FCU programs if you live outside the service area or don’t meet the field of membership requirements. Liberty is a credit union, so you must meet its membership requirements. Additionally, the branches are limited to specific areas, and you might not be able to access the programs due to location. 

Other home loan lenders might offer their own doctor and medical professional loan programs, as well as other programs in more states and without membership restrictions.

How to apply for a Liberty FCU physician mortgage loan 

Compare three to five lenders as you research how to proceed with your physician home loan. Consider closing costs, credit history requirements, underwriting and other terms to determine what will be best for your situation. Don’t forget to think about whether a doctor mortgage loan is the right move or whether you should consider a conventional home loan or government-backed, such as an FHA loan, VA loan or USDA loan.

A Liberty FCU mortgage loan officer can help you understand how to move forward, but here are the basic steps:

Step 1: Contact Liberty FCU

You can go to libertyfcu.org to get more information, or you can fill out an information form below.

Be ready with the following information before you reach out:

• Name
• Email
• Phone number
• Loan purpose
• Loan amount
• Purchase price
• Property location 
• Property zip code 
• Degree
• Employment contract
• Proof of medical license

Step 2: Gather necessary documentation 

Every lender requires its own documentation. Your Liberty FCU mortgage loan officer can help you figure out exactly what you need. Some common documents you might need include:

• Purchase agreement
• Employment contract
• Pay stubs
• Recent bank statements
• Tax returns
• Driver’s license or other ID
• Other documents, as requested

The more information you have, the faster you’re likely to close.

Step 3: If approved, accept the loan 

Once approved by Liberty FCU, decide whether to move forward. Review the documents and terms to determine whether everything matches what you were told when comparing lenders.

Should you apply for a physician mortgage loan with Liberty Federal Credit Union? 

Run the numbers and use a mortgage calculator to see if a physician mortgage loan from Liberty FCU makes sense for you. With certain degrees, you might have access to special financing options to help you become a homebuyer, even with a small amount of money down.  

Before moving forward, look at Liberty Federal Credit Union compared to other physician mortgage lenders. Also, consider traditional mortgage options and government-backed loans. Depending on your situation, a different program might make more sense than a doctor mortgage program. 

Fill out the form below for more information about getting a loan from Liberty FCU or other doctor loan programs.