How Do Physician Loans Work?

What is a physician loan?

Did you know that there are doctor specific loan programs offered by many lenders called physician loans? These loans allow doctors to secure a mortgage with fewer restrictions than a conventional mortgage even when they have no cash to put down, haven't started their job yet, and have a high debt-to-income ratio.

Who qualifies?

Most physician loan programs will be offered to Medical Doctors (MD), Doctors of Osteopathy (DO), and Medical Residents. Some physician loan programs are also offered to Doctors of Dental Medicine (DMD), Doctors of Dental Surgery (DDS) & more!

What are the advantages of a physician loan?

Physician mortgages are similar to conventional mortgages but differ in a way that addresses the unique needs and circumstances physicians face when wanting to finance a home. Here are the highlights:

• Many require 0% down on a loan up to 1 million
• Loan amounts up to 2-3.5 million (Over 1 million will likely require a variable percent down)
• No private mortgage insurance (PMI) even with 0% down
• Often only add the required student loan payment to the debt to income ratio vs full amount; and if you can prove they will be deferred for 12+ months will not be included at all
• Will often accept a signed employment contract as proof of income
• Allow you to close 60-90 days BEFORE your contract start date
• Some allow non-capped gift funds that can be used for down payment
• May not have a reserve requirement
• Some may offer the same, lower or higher rates than conventional loans (another reason to shop around!)

Why contact more than one mortgage company? They will all offer slightly different packages and rates so it doesn't hurt to shop around. And each company can run the numbers and determine what type of loan (conventional, physician, etc) makes the most sense for your unique circumstance.

Why work with a vetted mortgage lender?

You want to know that your transaction will go smoothly and working with a good lender can make all the difference.

Contact me to get a list of vetted mortgage lenders that service Oregon.