The Pros and Cons Of A Zero Down Doctor Mortgage

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The Physician Home Loan Program, or “doctor loan” – is a mortgage that makes it both faster and easier for medical professionals to buy a home with a low down payment.

The other two major advantages of this type of loan are that lenders are able to offer a mortgage with zero to very little money down – only 0%, 5% and 10% down depending on the lender. Opting for one of the low down payment loans can help physician borrowers qualify for a lower interest rate and better terms. Plus, borrowers will save thousands in interest and pay less money over the life of the loan. 

However, there are both advantages and disadvantages to zero down mortgages. 

The Cons:

  1. Zero-down mortgage loans are a bad idea in a less-than-ideal market. If a buyer puts no money down and the market starts to tank, home values will go down (“underwater”). At that point buyers will owe more than the home is actually worth.

2. Putting zero money down at the start of the loan, results in not building home equity. Equity matters in situations where there may be a home emergency. With equity built up, home owners can qualify for a home equity loan or line of credit that will help pay for repairs. With a zero-down loan, it will take a lot longer to build equity. 

3. Physician mortgage loans are not cheap, when compared to traditional mortgages, in the long run. Borrowers will pay a slightly higher interest amount – along with fees – than with a traditional mortgage. Combined with financing the full purchase price of a house, can mean significantly more interest paid over the life of a loan.


  1. Zero-down home loans help new borrowers get into a home even if they don’t have the money saved up to put towards a loan immediately. 
  1. It’s a good idea if borrowers are planning on staying put for a few years. This makes sense for more medical workers who are looking to build their careers. 
  1. Since medical school costs/debt are/is so high, physicians usually carry a lot of debt that would normally exclude them from securing a traditional mortgage. The zero down physician loan allows them to gain as much as 100% financing. 
  1. Doctors just starting out will normally see a substantial increase in their income as they progress through their career. Therefore the financial break at the beginning of the loan is not a risk. 

As with any mortgage, borrowers must pay closing costs. Additionally, with a $0 down option, physicians can skip private mortgage insurance (PMI). Normally, this type of insurance protects the bank if a mortgagee defaults – or fails to make their payments. PMI is usually expensive and not tax deductible. However, with the doctor mortgage loan program, borrowers can obtain 95% to 100% of the home purchase price with no PMI required. 

Finding a qualified lender to work with is crucial to the process as not all financial institutions offer the doctor mortgage loans program. MD Mortgage Loans help physicians find lenders while also taking into account the pros and cons of the program for each individual. 

MD Mortgage Loans have compiled a list of Physician Mortgage Lenders and Banks by both state and qualifications. MD Mortgage Loans helps to narrow down the list so borrowers find the right fit for their individual needs. 

Sorting through industry-leading competitive rates that fit a variety of financing needs is the first step to finding a program that works for the individual and their specific circumstances.


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