If you are a physician or soon-to-be doctor, it’s very possible that you are struggling to pay off medical school debt, making it difficult for you to purchase a home.
Many people believe that doctors are wealthy and would never have trouble buying a house. This is not true for many doctors who are just beginning their careers, or even established physicians who are self-employed.
It can be difficult to get mortgage loans for doctors when there is high medical school debt, no savings and little work history. Luckily, there are mortgage programs for physicians that cater to this kind of situation.
But is a physician mortgage loan really better than a conventional home loan that anyone can get? Let’s compare these two loan options so you can make the smartest decision on your next home purchase.
What is a Physician Mortgage Loan?
After years of medical school and college, doctors often have trouble applying for regular mortgages. Even if they have just finished their residency, they may not have any savings and they might not be able to provide proof of income or employment.
A physician mortgage loan is a special type of loan designed for the unique needs of doctors. Doctors traditionally earn a high income or expect to earn a high income in the near future, but they can sometimes find themselves with no cash, little credit, and high debt, especially if they’ve just graduated from medical school or just finished with residency. Or, perhaps they’re still in school with no current source of income.
Physician mortgage loans are similar to conventional loans, but there are some key differences. Using a physician mortgage loan allows you to qualify with a down payment of less than 20% and still avoid having to pay Private Mortgage Insurance (PMI).
Physician mortgage lenders also use slightly different underwriting criteria, focusing more on how much you have to pay on your loans each month instead of their overall balance and by accepting a signed employment offer as proof of income. This makes it easier for doctors to qualify for loans straight out of medical school or residency.
Physician vs. Conventional Mortgage Loans
Physician mortgage loans are different from conventional loans in many ways:
There are some differences about the type of property that you are allowed to purchase with a medical professional loan compared to a conventional loan. For example, you will likely be limited to only single family homes, condos, townhomes or properties with a maximum of 2 units. You will also likely be required to use the home as a primary residence, so no vacation homes or investment properties under the program.
Is a Physician Loan Right For You?
For many doctors, a physician mortgage loan is the best way for you to purchase a house. However, it is important to note that just because you are a physician or other medical professional that does not mean a physician loan is the best option for you.
You have a unique situation, and there are many loan options available to you. As a medical professional you have more options than most and it’s important to review a total cost analysis – a report that compares all of your home loan options so you can make the best homebuying decisions.
If you would like to know more about our physician mortgage loan programs, fill out the form below to schedule a consultation with one of our mortgage advisors. They will answer all of your questions and create a detailed loan comparison so you can create a solution that is best suited to fit your needs.
