FAQs
Questions About Physician Mortgage Loans & Eligibility
If you’re a medical resident or a licensed physician, you may be an ideal candidate for a physician mortgage loan. This typically includes professionals such as:
- Doctors of Optometry (OD)
- Doctors of Osteopathy (DO)
- Doctors of Ophthalmology (MD)
- Doctors of Podiatric Medicine (DPM)
- Doctors of Dental Medicine (DMD)
- Doctors of Dental Surgery (DDS)
- Doctors of Veterinary Medicine (DVM)
Lenders evaluate several factors, including your debt-to-income ratio, credit score, the property you’re interested in, your graduation timeline, and your current or projected salary. Physicians are viewed as strong candidates due to their earning potential. Generally, a solid credit score (typically 700 or above) increases your chances of qualifying. However, if your credit score is lower, you might face higher interest rates and less favorable terms.
Eligibility depends on the bank. Many lenders do accept non-permanent residents, but specific visa classifications are required. We can help you navigate this and find a lender that fits your situation.
Yes, you may qualify if you are a few months away from starting your residency. Most banks will require a signed residency contract before closing on the loan.
There’s a chance you might qualify, but most banks require a signed residency contract, typically received after Match Day (around March 17th). Additionally, you may need to show sufficient funds in your bank account to cover mortgage payments until your salary begins.
Applying for a mortgage requires a fair amount of paperwork. Documentation requirements have increased in recent years, which can feel overwhelming. To simplify the process, we’ve created a detailed checklist to help guide you through applying for a physician mortgage loan. Keep in mind, additional requests may come up as you go along—this is part of the process. Stay focused on the ultimate goal: owning your new home and building your wealth.
While many banks offer physician loans only in states where they have physical branches, we partner with lenders who provide these loans nationwide. Availability, rates, and terms can vary depending on the bank’s presence in your state. Some banks may offer zero down payment options, while others might require 5% down. Contact us with the state you’re interested in, and we’ll connect you with the best lender for your location. We will make sure you get a quick response.
Eligible properties typically include single-family homes, townhomes, and condos (in most markets). However, properties in areas classified as “declining markets” may face additional restrictions. It’s crucial to work with a lending officer who specializes in physician loans, as they will have the expertise to guide you through these nuances. We’ve seen many cases where doctors, unfortunately, faced issues after going under contract because they weren’t working with a specialist who understands the unique requirements of physician mortgage loans. Ensuring you’re partnered with an expert can make all the difference in a smooth and successful home-buying process.
Questions About Student Loans?
No, conventional mortgage programs do not overlook deferred student loans. If you were to leave residency, those loans would become active and be counted as current debt. However, physician mortgage programs are different—they allow lenders to disregard deferred student loans in debt-to-income calculations, which is a significant advantage.
Physician mortgage loans are specifically designed with doctors in mind, accommodating their unique financial situations, including substantial student loan debt.
Key Differences:
- Debt-to-Income Ratio Calculation: Student loan debt is often excluded or treated more favorably compared to conventional mortgages, where it heavily impacts the DTI ratio.
- Lender Perspective: Banks recognize doctors’ high future earning potential and low default rates, making them attractive borrowers despite high student debt.
- Specific Considerations: Lenders focus on your monthly student loan payments rather than the total balance. Income-driven repayment plans with lower payments can improve your mortgage qualification.
Maintaining a strong credit score by making timely payments on all debts is crucial to securing the best mortgage.
What Are My Options For Physician Mortgage Loans?
Physician mortgages offer a variety of options, including 30-year fixed, 20-year fixed, 15-year fixed, 5/1 ARM, and jumbo loans. You’ll find many of the same terms and lengths as conventional mortgages, but specific options may vary by bank and state. These flexible options allow you to choose the mortgage that best fits your financial goals and career trajectory.
Yes, refinancing with a physician mortgage is possible in many states, and more banks are offering this option every year. However, availability depends on the bank’s policy. It’s a good idea to consult with your lending officer to check your eligibility. We recommend comparing offers from different lenders in your state to find the most favorable terms and to work with a loan officer who understands your unique needs.
Yes, most of our lending partners offer jumbo loans, which are large, non-conforming loans exceeding $766,550 that aren’t backed by Freddie Mac or Fannie Mae. These loans are typically included in their physician loan portfolios, offering you access to the funds you need for a higher-value property.
Credit Scores
While there’s no magic number, aiming for a FICO score in the 720-740+ range will typically qualify you for the best rates and terms. Scores above 800 can unlock even more favorable rates. Maintaining a high credit score is essential for securing the best deals on major purchases, including your physician mortgage.
Improving your credit score is possible with time and dedication. Many resources, including books and websites, offer practical advice on boosting your score. If your score isn’t where you want it to be, consider taking steps to improve it, as a good credit rating is crucial for securing favorable terms on your physician mortgage. Aim for a score of 720 or higher, although a score of 700 is generally acceptable. Check out “How to Boost Your Credit Score in Months” by The Motley Fool for actionable tips.
Other Questions About Physician Mortgage Loans
Deciding whether to rent or buy a home is a personal choice that depends on your unique situation. Owning a home can provide financial and psychological benefits, such as peace of mind, wealth building, and the potential for future investment. However, there are also disadvantages to consider. To help you weigh your options, we’ve provided a detailed list of pros and cons. For more insights, read our article on renting vs. buying with a physician loan.
Physician mortgage loans offer several key advantages over conventional loans, including zero down payment in most areas, no PMI payments, and the exclusion of deferred student loans from your debt-to-income ratio. However, there are also differences, benefits, and a few drawbacks. Mortgages can be complex, so check out our comprehensive guide comparing physician home loans to conventional ones.
Private Mortgage Insurance (PMI) is required by most lenders to protect them if you default on your mortgage. While PMI covers the lender’s risk, it doesn’t contribute to paying down your loan or building your wealth. Physician home loans typically do not require PMI, allowing you to save on this additional expense. For more details, check out our in-depth article on physician loans and PMI.
The amount you can borrow as a resident varies based on factors like your annual income, which typically ranges from $55,000 to $65,000 depending on your state and residency level (e.g., PGY-3). Other factors, such as credit card debt, car loans, and liabilities will also affect your borrowing potential. For more detailed information, read our article: How much can I borrow with a doctor mortgage?
Buying down the rate can save you money on interest over the life of your loan, but whether it’s a good choice depends on your personal goals and situation. For many, especially residents, it may not be the best option. On the other hand, if you’re a practicing physician with a positive cash flow, opting for a shorter-term mortgage (10-20 years) and buying down the rate might be beneficial. To help you decide, check out our guide: Should You Consider Buying Down Your Physician Mortgage Rate?
Questions About Doctor Loan USA?
No, you’re not obligated to use the lender we connect you with. It’s important to explore different lenders to find the one offering the rates and terms that best meet your needs. We ensure that the lenders we connect you with are experienced, but you should choose the one who makes you feel most comfortable and respected. Buying a home is a significant step, and you deserve a lender who will prioritize your needs and go the extra mile for you.
No, we’re not a lender, bank, or mortgage broker. We connect physicians and residents with carefully vetted lenders specializing in physician loans. While we don’t handle loan origination or discuss rates, we focus on guiding you to top lenders and providing the information you need for a smooth home buying process.
No, there are no fees or commitments for using our service. We connect you with specialized lenders at no cost to you. Our goal is to help you access top mortgage lending officers who focus on physician loans, and our service is completely free.
You’ll typically hear from a lender within one business day. If you don’t receive a response, let us know, and we’ll investigate the delay. We connect you with a lender within this timeframe 95% of the time. You should also receive an introduction email shortly after submitting your info. If you’re on a tight timeline, please follow up directly.
Our lenders are flexible and can communicate with you in various ways, including text and email, to fit your busy schedule. However, we highly recommend having a brief conversation over the phone. This quick discussion allows the lender to fully understand your unique situation, provide expert advice, and ensure everything is handled correctly. While we respect your preferred communication method, a short call can help avoid potential issues and make the home-buying process smoother and more efficient.
No, your information will not be shared or sold. We value your privacy and are committed to keeping your details confidential. We only share your information with the lender you’re matched with and do not engage in spamming or selling your data. For more details, check out our privacy and security policy.
While it’s natural to prefer working with someone local, choosing an experienced lender who specializes in physician mortgages can make a significant difference in your home-buying experience. Our lenders have extensive experience with the unique needs of doctors and are equipped to handle the complexities of these loans, ensuring a much smoother and more efficient closing process. Local lenders who may not have as much experience with physician loans can sometimes overlook critical details, leading to delays or issues at closing. By working with our vetted experts, you can trust that your mortgage process will be handled with precision, no matter where you’re located.
Please note: This FAQ is not meant to be a comprehensive list of all program guidelines associated with physician mortgage loans and is not legal advice. Mortgage programs may change without notice, so please consult with your individual loan officer when you have specific questions.
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