6 Expensive Mistakes Doctors Make When Buying a Home (and How to Avoid Them)

TL;DR:
Even with high earning potential, physicians are not immune to costly homebuying mistakes—especially early in their careers. From underestimating closing costs to relying on generic loan programs, the wrong move can cost thousands. This blog explores six of the most common financial pitfalls doctors face when buying a home and how to sidestep them with the right preparation, team, and loan strategy.

1. Assuming Your Income Guarantees Approval

It’s a common belief: “I’m a doctor. I’ll get approved no matter what.”
But lenders don’t only look at your salary—they look at your debt-to-income ratio, credit score, savings, and employment status. And for physicians, that debt often includes hundreds of thousands in student loans.

Fortunately, physician mortgage loans are designed with this in mind. Many programs allow you to qualify based on future income via an employment contract and may even exclude deferred student loan debt from your DTI calculation.

To understand what really affects your eligibility, review Physician Loans: The Guide That Will Save You Money and Time—a practical overview of how doctor-specific underwriting actually works.

2. Not Understanding the True Cost of “No Down Payment”

Physician loans often offer 0–5% down, but that doesn’t mean zero upfront cost.

You still need to cover:

• Appraisal and inspection fees
  
• Attorney/title fees
  
• Escrow deposits
  
• First-year homeowner’s insurance

Altogether, these costs can equal 2–5% of your purchase price. If you don’t plan for them, you could find yourself dipping into emergency funds or relying on high-interest credit cards.

To get a solid estimate, use the Mortgage Calculator—but don’t stop there. For a national overview of what typical homebuyers pay in closing costs (by state), check out this breakdown by Bankrate, which gives physicians a benchmark for budgeting realistically.

3. Relying on a Generic Lender Instead of a Physician Specialist

Working with a lender who doesn’t specialize in physician loans can lead to:

• Denied applications due to student debt misinterpretation
  
• Missed opportunities to qualify with an employment contract
  
• Unfavorable terms or unnecessary PMI

You need a lender who speaks your language—one who knows how your income structure, training timeline, and contract terms differ from traditional borrowers.

This is explained in more depth in How to Compare a Banker Who Understands Physician Mortgages vs. One Who Doesn’t. The wrong banker could cost you thousands—before you even realize it.

4. Overbuying Based on Future Earnings

Yes, your income will rise. But in residency or early practice, your paycheck may not reflect your full potential yet.

Buying too much house early on creates pressure:

• Higher mortgage payments and property taxes
  
• Increased utility and maintenance costs
  
• Reduced flexibility for job changes or family plans

Before setting your sights on that dream house, check out Home Loans – How Big of a House Can I Afford?. It helps reframe affordability in real terms, not assumptions.

5. Ignoring the Resale and Exit Strategy

Physicians often move:

• From med school to residency
  
• From residency to fellowship
  
• From fellowship to an attending job
• Know what your future buyer will look like

Yet, many buy homes as if they’ll live there forever.

Ask yourself:

• Can this property be rented out easily?
  
• Is it in a high-turnover or stable market?
  
• Will I recoup closing costs if I sell in 3–5 years?

If the answer to most of those is “no,” your purchase may cost you more than you think. When in doubt, a smaller starter home in a desirable zip code may be better than a bigger one with poor resale potential.

For those navigating cross-state moves, the blog A Cross Country Moving Guide For Physicians can help you plan a more mobile-friendly strategy.

6. Not Factoring In Lifestyle Inflation

You’ve been living frugally through training. Now you’re making six figures—and you deserve to treat yourself, right?

Maybe. But combining a big mortgage with big lifestyle upgrades (furnishings, cars, vacations) is a recipe for financial stress.

You don’t need to live like a resident forever—but you also don’t need to upgrade everything all at once. That’s why many seasoned doctors recommend the Benefits of Living Like a Resident—at least for the first few years in practice.

Staying modest while growing your emergency fund and student loan payments gives you financial breathing room.

Final Thoughts

Buying a home as a physician is both exciting and empowering—but it comes with its own unique risks. From overestimating your financial runway to choosing the wrong lender, small decisions can have major consequences.

But with the right guidance, tools, and a little restraint, you can turn your home purchase into a smart, long-term asset.

Want a trusted partner to help you avoid costly mistakes on your path to homeownership?
Explore our physician mortgage tools and connect with experienced lenders now.