Finances and Your Health

By Steve Barrett
Saturday, July 1, 2017

Mismanaged finances or unrealistic income expectations can affect not only a physician’s bottom line but his or her health as well.

Physicians, residents and medical students who seek help from Physician Health Services (PHS) — founded by the Massachusetts Medical Society (MMS) to deal with substance abuse, mental health issues and physical health concerns — often are experiencing significant financial troubles, Steve Adelman, MD, PHS Director, writes on the MMS website.

Here are a few of the difficulties PHS regularly addresses among clinicians who enlist the nonprofit corporation’s help:

They prioritize money rather than a passion for medicine. Providers struggle if their career paths don’t feed their souls as well as their bank accounts.

They have too much student debt. Seeking positions that help physicians repay their loans is one way to avoid this trap.

They fail to count the personal cost of the quest for higher earnings. Family life in particular can suffer when a bigger payday becomes an all-consuming objective.

They do not acknowledge that something could short circuit their careers. For example, serious medical problems can strike anyone. That makes adequate insurance critical for physicians.

Leveraging Earning Potential for Home Purchases

Although newly minted physicians may not live in Oliver Twist-level destitution, the combination of a scary student debt load and a lack of savings puts them at a disadvantage when seeking to buy their first home.

However, they have significant earning potential, which has spawned mortgage loans geared to recently graduated physicians and residents. Here are some of the benefits of such loans, as outlined by Physician’s Money Digest and The White Coat Investor:

  • Lenders may not factor in student debt at all when they consider you for a loan, or they may make your debt load less weighty in those considerations.
  • It is OK if you do not yet have pay stubs from your new position. The lender will rely on your employment contract in facilitating the purchase, enabling you to buy the home as much as two months before you begin working.
  • Down payments are often 5 percent or less — and in some cases nothing.
  • Physician loans typically waive private mortgage insurance requirements even if you cannot make a 20 percent down payment.

These loans are not only for new physicians. The White Coat Investor notes some lenders make physician loans available for second homes or to physicians in later stages of their careers.