MD Mortgage Loan Blog

Why Do Lenders Offer Physician Loans?

Doctor home loan mortgages offer unique terms setting them apart from traditional home loans. These types of loans are made available to professionals in the healthcare space – such as doctors and dentists. The Physician Home Loan Program, or “doctor loan,” makes it easier for medical professionals to purchase a home. 

These types of mortgages have more flexible guidelines. This means they don’t have to adhere entirely to more strict parameters – such as those set forth by Fannie Mae or Freddie Mac. 

Even though the guidelines differ from lender to lender, some things are similar. IE most doctor loans are obtainable with lower down payments – from 0% to 15% than conventional loans. These types of loans are unique because they usually don’t require Private Mortgage Insurance (PMI.)

Additionally, since physicians usually carry a large amount of med school debt, their student loan burden is calculated differently or may not be included when determining approval. These types of loans follow different guidelines regarding proof of employment – for instance, they take fellowships and residencies into account.…

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Doctor Home Loans: Buy Now Or Wait?

2023 Physician Mortgage Loan

The housing market is still hot going into 2023. The overriding consensus is that home prices will not drop at a noticeable rate anytime soon in most housing markets. 

Many potential home-buyers are hesitating to purchase their homes, waiting to see if 

housing prices will drop. The realities of the 2023 real estate market do not support this decision.

The reality is that though home prices may, in fact, decrease slightly over the next year, mortgage rates are more likely to be higher due to rate hikes. This can cost homebuyers more per month, and many will refinance when rates get lower. According to Forbes, today’s market has only 1.7 months of supply. Since rates will continue to rise and the housing supply is historically low, there is no better time than the present to seek a mortgage.

New construction may be a better investment. Physician doctor loans include mortgages for new construction as well as traditional home buys. 

Advantages for doctors include qualifying for a loan with zero to very little money down and no private mortgage insurance (PMI.)…

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Who qualifies for the Doctor Home Loan Program?

According to real estate marketplace Zillow, the age of the typical first-time homebuyer in the U.S. is 34 years old. For those in the medical field, four years for medical school, a minimum of three years for residency (maybe more to specialize with a fellowship) means most medical students do not even become independent physicians until they are in their early 30s. Medical students and new physicians typically have a harder time when it comes time to purchasing their first home.

Combined with the lack of inventory attributed to the current pandemic-era real estate market, relaxed loan options are a valuable tool. Physician loans, or “Doctor loans,” can help elevate some of the obstacles of home ownership and provide rewards for those in the medical field for all their time and training.

The Doctor Mortgage Loan Program is designed to help those who qualify receive a mortgage loan from participating lenders with zero to very little money down and no private mortgage insurance (PMI).  The doctor loan generally makes allowances for deferred student loans.  Doctors would normally be at a disadvantage by a lenders’ DTI requirements, as most physicians carry a six-figure medical school debt.…

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The Many Benefits of a Physician Mortgage Program

The Physician Home Loan Program, or “doctor loan” – is a mortgage that makes it both faster and easier for medical professionals e.g. (Medical Doctors, Dental Surgeons, and Doctor of Podiatric Medicine), qualify right out of medical school with a low-down payment mortgage without mortgage insurance.

These programs have been around for decades and were designed to entice young medical professionals into new banking relationships.  Physicians are a low credit risk for banks as according to ZipRecruiter they have approximately a 0.2% default rate – much lower than the national average.  Lenders also base loans on the future earnings by physicians with most forecast to have an annual income between $150,000 and $312,000.

On average, physicians carry a six-figure medical school debt. This has historically been an obstacle to those trying to obtain a mortgage. Lenders are more flexible with debt-to-income (DTI) ratios, in respect to student loan debt, on the Doctor Mortgage Loan Program.  Student loan debt can often be waived from the DTI, if deferred for 12 months.…

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Loan Approval Amounts Vary By Doctor Mortgage Lenders

Whether you are looking for a conventional mortgage or a healthcare professional who qualifies for a Physician Home Loan when starting a home search, the first question is always how much can each borrower be approved for? 

Each lender is different and brings its own parameters to answer that question. Borrowers can help themselves by getting the right documents together and considering the main factors lenders consider.

First and foremost is income. This can be a clear answer if a potential borrower takes home a salary, works in a hospital, or has another form of guaranteed income. W-2 or contract income is generally accepted as proof of income. Physicians in a partnership or who are self-employed can be more complicated.

Guaranteed income is always counted by the lender. Variable or irregular income – such as  bonuses, incentives, etc., may not count for the lender. Physicians who are just starting a practice or are just out of residency should take note that negotiating a guaranteed income will be easier to satisfy the lender.

Lenders also use gross pay to calculate income.…

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Zero Down Payment Options for Physician Mortgage Loans

Healthcare workers who take advantage of physician home loans can usually afford their own homes better than with a conventional home loan. The Doctor Mortgage Loan Program is designed to help professionals who qualify to receive a mortgage loan from participating lenders with zero to very little money down and no private mortgage insurance (PMI.) 

A common requirement of a conventional mortgage has a 20% down payment. This opens up a world of opportunity for homebuyers. Many potential home buyers can put down less than 20% and still secure financing.  However – there is a catch. Lenders will also require an extra monthly fee covering the cost – IE PMI. PMI is insurance that covers the mortgage loan balance if borrowers default on their loans. This became the industry standard after the 2008 housing debacle. Many lenders automatically include PMI, where the down payment is less than 20% of the purchase price.  Thankfully doctors can usually bypass this with a doctor mortgage loan from one of our top physician mortgage lenders.

How do potential homeowners determine how much to put down?…

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