Is a Physician Loan Right for You?

If you’ve never heard of a “physician loan” before, you are not alone. Many people, even aspiring physicians themselves are unfamiliar with this loan type. Put simply, a physician loan, also known as a “Doctor’s Loan” is a a type of mortgage designed to help medical professionals purchase homes. These loans can be used by individuals with advanced degrees in medicine or dentistry, including:

• Medical Doctors

• Doctors of Osteopathy

• Dentists 

• Veterinarians 

• …and more

With a son-in-law currently in medical school, Steve Smith, founder of Honor Mortgage Solutions, has a personal interest in the benefits and accessibility of such loans. “This could be a really great option for young first-time home buyers in med school and residency and I’m passionate about creating more awareness and accessibility,” says Steve. 

The Key Features of Physician Loans include…

1. Low or No Down Payment

Physician loans often allow borrowers to purchase a home with as little as 0-5% down, without requiring private mortgage insurance (PMI). This is a significant advantage, as it lowers upfront costs while eliminating ongoing PMI expenses.

2. There is No PMI Requirement

Unlike conventional loans, physician loans waive the PMI requirement even when the borrower puts less than 20% down. This can save thousands of dollars over the life of the loan. (Money saving is important to anyone but especially valuable to those already spending thousands of dollars on med school!) 

3. Student Loan Flexibility

Most physician loans account for the unique financial burden of medical school by offering flexible debt-to-income (DTI) calculations. For example, lenders may exclude student loans in deferment or use income-driven repayment amounts rather than the full monthly payment in DTI ratios.

4. High Loan Limits

Physician loans typically offer higher borrowing limits than conforming loans, making them ideal for professionals looking to purchase in high-cost areas or invest in homes that align with their lifestyle and future earning potential. Many of the best medical schools in the country are located in extremely expensive areas. Having the option to begin investing in one’s family's future by putting down roots can be hugely beneficial.  

5. Flexible Employment Requirements

Many physicians secure these loans before they officially start working. Lenders often accept employment contracts as proof of income, allowing borrowers to close on a home even before their first paycheck.

Physician loans are an incredible option for first-time home buyers who are also medical professionals.  Not only do these loans accommodate unique situations, but they also provide medical professionals with a distinct advantage when it comes to entering the housing market. 

If you’re a physician or medical professional looking for tailored mortgage options, we’re here to help. With first-hand knowledge and personal experience, Steve specializes in understanding physician and medical students’ needs and is prepared to guide first-time home buyers through the loan process. 

Contact Steve today to learn more about physician loans to see if this loan type might be right for you.