In fact, many physician mortgages don’t require a down payment at all. ![]() However, with a physician mortgage loan, you sidestep PMI entirely, even with a minimal down payment. In these cases, the PMI you pay is a sort of assurance to your lender that they’ll be covered if you default. If you have a low down payment, you might be viewed as a “risky” borrower. PMI is a monthly premium tacked onto your total mortgage payment that’s intended to protect your lender in the event that you can’t make payments. When you apply for a conventional mortgage, you need to put a minimum of 20% of the total purchase price down in order to avoid Private Mortgage Insurance (PMI). Let’s go over a few of the key benefits you can expect when searching for a mortgage that meets your needs. What are the Benefits of a Physician Mortgage?ĭoctor mortgages have a laundry list of benefits. This can dramatically impact your total debt-to-income ratio in the eyes of a mortgage lender, especially as you start your career. In some cases, lenders will even accept an offer letter of employment as proof of income. For newer physicians, this is an attractive concept.Īs a resident or fellow, your salary is notably lower than it will be in the next few years as an attending. There are fewer restrictions than you might find with conventional mortgages because they’re largely dependent on the calculated future earnings for physicians. Prefer video over the blog? We’ve got you covered! Watch our YouTube video as we dissect this blog post for you:Ī physician mortgage is a homeowner’s loan that is only available to qualifying medical professionals. Most importantly, is a physician mortgage even right for you?įirst, here is a free flowchart we put together for you: What Issues Should I Consider When Buying a Home.We cover who qualifies for the physician mortgage loan (hint: it is not only for physicians!) and the main requirements.While the doctor mortgage is a great tool to have in your back pocket, it should not be your first option all the time.You have heard of the physician mortgage loan, but we finally explain it in simple terms and discuss the pros and cons.This mortgage can help new physicians lock in low-interest rates, avoid a colossal down payment (can be as low as 0%!), and reduce the total amount they have to pay over the life of their loan. The physician mortgage loan is a unique type of home loan specifically for medical professionals. Luckily, there’s an alternative to a traditional, conventional mortgage. ![]() This could translate to higher mortgage interest rates and higher lifetime payments. Depending on the amount of debt you’ve taken on (and whether you’ve been consistent in making payments), you may also struggle with a lower-than-average credit score as you start your career. This is especially true for new physicians who may have a lower salary during residency/fellowship, minimal savings, and student loans that are through the roof. Many physicians struggle to find a conventional mortgage that meets their needs. ![]() The physician mortgage loan (sometimes called the doctor mortgage loan) was created by banks because of the distinctive challenges physicians face when borrowing due to their high debt-to-income ratios - thanks to student loans.
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