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.

Sol Nasisi
Sol Nasisi: Sol Nasisi is the co-founder and a past president of BestCashCow, an online resource for comprehensive bank rate information. In this capacity, he closely followed rate trends for all savings-related and loan products and the impact of rate fluctuations on the economy. He specifically focused on how rates impact consumers' ability to borrow and save. He also has authored a wee

Add your Comment

or use your BestCashCow account

or

Featured - 30 Year Fixed Mortgage Rates 2024

Lender APR Rate (%) Points Fees Monthly
Payment
Learn More
PenFed Credit Union
NMLS ID: 401822
6.530% 6.375% 0.63 $5,200 $1,997 Learn More
Mutual of Omaha Mortgage, Inc.
NMLS ID: 1025894
6.966% 6.875% 0.75 $2,982 $2,103 Learn More
Rocket Mortgage
NMLS ID: 3030
7.451% 7.375% 0.75 $2,400 $2,211 Learn More
Neighbors Bank
NMLS ID: 491986
Learn More