Do Shop Around
Although you are getting a better deal with physician mortgage loans, you should still look at different lenders. When you look into various loans, you’ll get a better idea of all the options you have. Compare interest rates and terms to find the best deal for your needs. Some lenders let you close on a home before you start working if you have the right contract and documents to prove earnings. Keep in mind that a mortgage might not be worth the trouble if you don’t plan to stay in your city or town. Just because you can afford a mortgage, doesn’t mean it is the best option if you don’t plan to stay for at least a few years.
Don’t Buy More Home Than You Need
Before settling on a physician loan mortgage, decide how much space you need. How much money you can afford to spend and your lifestyle will dictate the amount of space that works for you. Spending a lot of time in medical school to buy yourself a dream home when you get a job is ideal for many. However, it isn’t always practical. If the real estate market begins to plummet, you’ll have a harder time selling a large and lavish house. Your investment could decrease in value over time. Don’t go overboard, only buy what you need.
Do Understand the Difference Between Doctor Loans and Conventional Mortgage
Physician home loans and conventional mortgages differ in many aspects. A doctor loan is offered to physicians, dentists, and other medical professionals. Those in residency can also apply for this type of loan. The key differences between the two loan options are:
You can put little or no money down
The interest rate is slightly higher
No private mortgage insurance (PMI) is required
Private mortgage insurance is available to protect lenders if you stop making payments on a home loan. Most lenders require this insurance, but not for those applying for a doctor’s home loan. This allows the applicant to focus on paying off school debt even if you don’t pay a down payment on the home you are buying. Although income is a huge factor to qualify for a physician mortgage loan, you’ll have a high-interest rate because of your debt-to-income ratio. Even if you receive a high-paying salary early in your career, your debt is likely to outweigh your annual income. When you apply for any home loan, the debt-to-income ratio is an important factor. In a lot of cases, young doctors who want to buy a home can only get approved for a physician mortgage loan because of their debt. Don’t let a high-interest rate keep you from buying a home straight out of school. You’ll have the option to refinance your home to a traditional mortgage with a lower interest rate later on.
Don’t Freak Out if You Get Denied
If you get denied by one lender, don’t freak out! Different lenders assess criteria differently. The loan amount you receive will be determined by the following:
Income
Debt
House condition
Credit score
House condition
Banks might have different credit score requirements and offer varying loan amounts depending on the physician loan program they run. Some banks provide construction loans for doctors who want to build a new home or buy one to fix up.
Do Find the Right Bank
There are both national and regional lenders that offer physician mortgage loans, and the details can vary quite a bit from one program to the next. Terms, eligibility, and underwriting requirements aren’t always the same—so it helps to compare options side by side instead of assuming every “physician loan” works the same way.
Dr. Home Finance makes that easier by helping you connect with physician-focused lenders in your state through one simple intake form. When you’re ready to shop and compare, you can use our network to quickly identify strong options in your area and start conversations with the right people—without wasting time chasing dead ends.
Keep Saving—Because Cash Creates Options
A physician mortgage can reduce or eliminate the need for a big down payment, but saving still matters. Cash gives you flexibility during a move—travel to tour homes, deposits, movers, and the first-month surprises that come with starting in a new city.
On a monthly basis, savings also buy you choices: live closer to the hospital, keep a bigger cushion, or pay for a lower rate or lower payment. The goal isn’t just a down payment—it’s financial leverage that makes the whole process smoother and less stressful.
Are Physician Mortgage Loans Right for You?
If you want to buy a home right after medical school despite your debts, you can with a doctor home loan. Physician mortgage loans are made specifically for doctors or residents who want to buy a house. With this loan program, you benefit from little to no down payment and don’t have to pay private mortgage insurance, but the interest rate is slightly higher. For most, the pros outweigh the con. Think a physician home loan is right for you? Contact Dr. Home Finance today to get started or to answer any questions you might have.
