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Can You Qualify For A Physician Mortgage Loan?

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Can You Qualify For A Physician Mortgage Loan?

The advantage of a physician mortgage loan is doctors with student loans, high-interest debt or cash flow constraints can avail of it.

One does not require private mortgage insurance, even if they pay less than 20 % down payment, and many times they have less stringent underwriting requirements. 

Depending on how far along the physician is in his or her training or career the loan amount and interest rate would vary. 

For instance, an attending physician will be approved for better rates than an intern or resident. 

The loans can be used only for buying or refinancing a primary residence.

There are several ways a physician mortgage loan is different from a conventional mortgage.

  • PMI: A PMI is not required for the physician mortgage even if the down payment is less than 20%. Saving you hundreds of dollars in the monthly payment, that can be used to pay off other debts.
  • Debt-to-income ratio: When they finish training many physicians have a large amount of debt, making it difficult to qualify for a conventional mortgage. But when calculating the debt-to-income ratio a physician mortgage does not include medical school debts, so it is easier for physicians to qualify.
  • Employment contract: An employment contract satisfies the requirement for having a job and earning an income for a physician mortgage loan.

A physician mortgage loan may sound like a great deal but compare to a conventional loan it charges higher interest rates and closing costs.

Before moving ahead with a physician mortgage loan, work with your financial advisor to develop a financial plan and also decide on how much you want to spend on your new home. 

Also plan for all the other costs associated with home ownership like property taxes, homeowner’s insurance, maintenance, utilities, etc.

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