Special financing for doctors and dentists
Our colleagues at CrossCountry Mortgage proudly support the medical community. That’s why they offer physician loans designed to provide healthcare workers and doctors with innovative, flexible solutions to finance their homes.
What is a physician or doctor mortgage loan?
Sometimes called a “doctor loan,” a physician home loan is a specialty mortgage loan aimed at doctors and other medical professionals. They require no down payment for loan amounts below $1 million, nor will borrowers be asked to pay any private mortgage insurance (PMI).
These advantages are designed to help doctors afford a home while also juggling medical student debt. This type of loan typically allows you to qualify for a house more easily than a conventional loan.
Who can qualify for a physician loan?
Physician loans are ideal for new doctors and medical professionals. If you’re a recent medical school graduate, resident, or doctor entering the field, you can pursue a doctor loan for flexible financing. These loans are for the following professionals:
Medical Doctor (M.D.)
Doctor of Science (D.S.)
Doctors of Osteopathic Medicine (D.O.)
Doctor of Podiatric Medicine (D.P.M.)
Doctor of Dental Medicine (D.M.D.)
Doctor of Dental Surgery (D.D.S.)
Doctor of Veterinary Medicine (D.V.M.)
At CrossCountry Mortgage, you can close on your new house before you start your new employment.
How do doctor mortgage loans work?
New medical professionals often find themselves in a unique financial situation. Even if you’re gainfully employed, your financial history can make it difficult to qualify for a traditional mortgage.
Physician loans provide a flexible option for those who struggle with the requirements of a conventional mortgage. CrossCountry Mortgage offers physician loans with features that include:
No down payment requirements on loans up to $1 million
No private mortgage insurance (PMI)
Loans up to $2 million
30-year fixed rate or ARM options
Doctor loans differ from conventional loans in several key ways. Here are some of the things that distinguish these loans from other programs.
Student loan debt
At CrossCountry Mortgage, physician loans come with either a fixed–rate or an adjustable-rate mortgage. With an ARM, borrowers typically pay a lower interest rate during the initial years of the loan, which gives you some breathing room to pay off things like student loan debts.
Debt-to-income ratio (DTI)
When you apply for a conventional mortgage, a lender will evaluate your credit history, monthly income, and debt-to-income ratio (DTI). Your DTI is the ratio of your total monthly debts to your monthly income. Most lenders prefer borrowers with a DTI of 43% or less.
Doctors often have high student loan debt that can raise their DTI significantly, limiting their ability to qualify for home loans. But physician loans are often more accommodating, accounting for their deferred student loans.
Debt-to-income ratio calculator
Use our debt-to-income ratio calculator today to assess your financial health.
Private mortgage insurance (PMI)
In a traditional loan, you will be required to pay for private mortgage insurance (PMI) if you don’t make a down payment of at least 20%. While your PMI payments are small, they can add to your total monthly mortgage payments.
Doctor loans don’t require any PMI payments. This means that you can secure a physician loan with no down payment and still avoid paying PMI for the duration of your home loan.
Physician loan pros and cons
Is a doctor loan right for you? Before you commit to this loan type, learn some of the advantages and disadvantages.
Pros
Positively, physician loans offer benefits such as:
No down payment required
No PMI payment
Flexible eligibility criteria
Cons
There are some downsides to a physician loan, including:
ARMs can result in unpredictable interest rates
The loan is limited to primary residences, not vacation homes
Interest rates may be higher than traditional mortgages
Additionally, any time you buy a home with no down payment, you can create an underwater mortgage, which means that if your property value drops, you can owe more money than your property is worth.
How to qualify for a physician loan
Physician loans offer flexible eligibility requirements, but you’ll still need to go through a preliminary screening process. When you apply, your lender will evaluate your:
Credit score
Proof of employment
Debt-to-income ratio
Monthly income
How to get a doctor mortgage loan
CrossCountry Mortgage makes it easier than ever to obtain financing for your future home. If you are a doctor or just finished medical school, contact them today to learn more about physician loan options.