Mortgages for Doctors and Physicians

Mortgages for Doctors and Physicians

Residents and existing Doctors can benefit from a mortgage offered by some banks called a Doctor or a Physician Mortgage. The Doctor Mortgage offers special underwriting and rates to residents as well as just starting out doctors who may not have significant salary history yet or a long credit history. This can resolve the problem that many young professionals face of having excellent earning prospects but being unable to quality for a mortgage and buy a home.

In general, a doctor/physician mortgage provides the following benefits: 

  • Is made to a resident or Doctor (7-10 years out of residency), and often dentists, veterinarians, attorneys, and other skilled professionals.
  • Requires little down payment (between 0-5%).
  • Doesn't require the use of Private Mortgage Insurance (PMI).
  • Will accept a job contract as evidence of earnings versus most mortgage programs that require up to two years of pay stubs and tax filings.
  • May allow the purchaser to use gifts as a down payment (many mortgages do not allow gifts to be used for the down payment).
  • Usually do not calculate student loan debt towards the loan/income ratio.
  • Provides the same rate whether the loan is a conforming or jumbo loan.
  • Requires a decent credit score and a loan to payment ratio of between 30-40% depending on the bank.

Below is a comparison of a doctor mortgage versus a conventional mortgage for a 30 year fixed rate loan.

                                         Doctor Loan                 Conventional Loan

Amount:                                $435,000                       $435,000

Down Payment %:                   0%                                 5%

Down payment amt.:              $0                                    $21,750

PMI:                                     $0                                    $213.51

Interest rate:                         4.490%                         4.250%

Monthly Payment:                  $2,201.50                      $2,246.46

* Data supplied by Stephanie Arcelay from SunTrust Mortgage as of May 14, 2014.

As you can see, the rate on doctor mortgages are often are slightly higher than a conventional loan or an FHA loan but the low down payment and fees often offsets the higher rate. And once a doctor has built some earning history and equity, they can refinance to a lower conventional  rate. 

See mortgage rates today.

Image: photostock at FreeDigitalPhotos.net

Reviews

Add your Review

Featured - 30 Year Fixed Mortgage Rates 2017

Lender APR Rate (%) Points Fees Monthly
Payment
Learn More
Quicken Loans NMLS #3030
NMLS ID: 3030
4.248% 4.180% 0.50 $2,049 $1,220 Learn More
Rocket Mortgage
NMLS ID: 3030
4.248% 4.180% 0.50 $2,049 $1,220 Learn More