Which Mortgage Option is best for us (Virginia)?

My wife and I are both recently graduated physicians which means high loan debt but high income potential. Our combined salary next year will be 360,000 with the possibility of earning closer to 700K combined in a few years. Our student loan debt is ~ 280,000 but carry absolutely no other debt in our names. Credit scores are 740+ each. We are looking at a house in the ~400-450 K range. We will have ~30K saved for a down payment... with that background here are our options:1) All traditional options..2) A "Physician Mortgage" -- which seems to me a fancy feel good term that means lower down payment, higher interest rates. The best 'offer' we have so far is a modified 5/1 ARM @ 3.5% (1% origination fee), up to 95% financing. The ARM can increase only by 1.5% every 5 years to a maximum interest rate of 6.5%.Part of me thinks we should try for a 15 year traditional mortgage, pay the PMI but with a much better interest rate. Given all our debt though, would we qualify?Thoughts, suggestions, opinions most welcome. Thank you so much in advance!! by cather_859_374 from Morehead, Kentucky. Mar 18th 2013 Reply