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4 Things Doctors Should Know About Physician Mortgage Loans

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Becoming a doctor is a difficult feat, requiring years of classroom study, followed by exhausting stints of hospital training. The rewards for successfully completing the process and being issued a degree in medicine promise a bright future, but most doctors graduate with student loans to pay, the promise of a job in a distant city, and nowhere to live. A home loan option known as a physician mortgage, offers new doctors a way to more quickly purchase a home than they might otherwise be able to do. If you are about to graduate medical school and are beginning to think about purchasing your first home, here are four things to know about physician mortgage loans. 

What about the down payment? 

The lack of a down payment keeps people on all career paths from becoming a homeowner as quickly as they would like to. Companies that offer mortgage financing services for doctors, however, understand that young doctors, who are just finishing their education, are strapped for cash even though they have great income potential for the future. This allows most lenders to be able to approve a physician mortgage with little or nothing down. 

What about PMI? 

Prime mortgage interest (PMI) adds considerable cost to the monthly principal and interest payment of a home if the buyers are unable to put down the full 20 percent needed to remove the requirement. Like some other specialty home loans, such as VA loans, prime mortgage interest is not assessed on a physician mortgage. 

What about employment history and income? 

Doctors who are just graduating medical school or working through residency usually have little in their employment history except for a few part-time or summer jobs. This lack of a well-proportioned employment history can make qualifying for a traditional home loan very difficult. Physician loans are able to be solely based on having a signed employment contract, even when it will be a while before the first paycheck arrives. 

What other types of medical fields can qualify for a physicians loan? 

In addition to medical doctors, dentists, veterinarians, and some other types of specialty fields can also qualify for a physician home loan. Like physicians, these applicants would also need to have a signed employment contract to qualify.

Like all loans, it is important to always gather all the facts and then decide whether a physician loan is the right option for your housing needs at this particular point in your career. To learn more about physician mortgages, make an appointment to speak with an approved lender. These financial experts can help you look at your specific situation and career track and help you best determine how to move forward.