Doctors, Dentist, etc, still have a broad range of finance options, despite the current credit crisis. For example 90% financing for medical property loans, on purchases and refinements when collateralized by commercial real estate is still available. Amortization schedules as long as 30 years with fixed rates as long as 10 years is still an option as well. In fact, having the loan amount going beyond the value of the real estate, although unheard in the rest of the industry, is still available for medical professionals (only).
Medical Property Loan
One of the keys here is to realize that there are additional funding sources nearby local banks. For example life insurance companies, foreign banks and other non bank lenders such as hedge funds can offer some really interesting options. For example most traditional banks are currently only offering a max 5 year fixed rate with max 20 year amortization schedules. For many, this risk of having such a short term fixed period is unsettling due to our uncertain times.
By doubling the length of the fixed period to 10 years and increasing amortization schedules to 25 or 30 years, doctors have the benefit of the additional security and typically enjoy a lower payment by approximately 15 – 20% (comparing a 20 year vs. a 30 year schedule). This increase in cash flow is a significant point. And again these types of loans are know only available through none bank and non depository lenders.
The last point that these sources are non depository is important. Most traditional banks are now getting very aggressive with asking (really demanding) side business. Ie in order to close your potential medical property loan with them, they will require you to shift your checking, savings and other bank related business to them. Not only can this be time consuming / annoying it also has a negative business component to it as well, that most attorneys will warn you against.
The "Right to Offset" is a nasty little clause that you will find in most traditional banks agreements. What this means is that the banks hold the right to go into your deposit account that you have with them, and take cash out, to offset their losses or potential losses. Granted this is only an issue when you're in trouble (trends are down, cash flow under water) but this is exactly when you need access to your reserves the most.