It’s not easy to be a doctor these days. Aside from the stress that goes along with the medical profession, it can be incredibly difficult for physicians to secure a regular home loan until much later in their careers than other people. If you’re a physician with a growing family, that can be pretty disheartening.
Did you know, however, that there are unique financing options that are designed specifically to help physicians obtain the homes they need? Read on to learn more.
Why Do New Physicians Struggle to Get Regular Mortgages?
When most new physicians finally graduate medical school, get through their internships and find a permanent position in a hospital or an independent medical practice, they’re at a huge disadvantage compared to other professionals their age when it comes time to get a traditional mortgage.
The problems stacked against physicians who need a home loan usually include:
- A sizeable student loan debt that makes their debt-to-income ratio too high
- The lack of savings sufficient to put down 20% (or even less) on a home
- A short job history in their current position (since they may have just started)
Those three factors alone make lenders anxious and underwriting a difficult process, even if the physician can easily afford the monthly house payment.
In essence, the loan-to-value (LTV) ratio that banks use to assess the risk of a loan ends up being too high for new physicians to qualify for the mortgage they want or need – even though doctors are arguably in a profession where they are likely to keep increasing their earnings over time and can be relied upon to make their payments.
Plus, even if underwriting a regular mortgage is possible, the lack of a 20% downpayment sticks the physician in question with private mortgage insurance (PMI) payments, and that can significantly increase their monthly and yearly mortgage costs.
What’s a Physician Loan Program?
Called either “physician loans” or “doctor loans,” these are special mortgages with generous terms designed solely to ease the path toward homeownership for these deserving professionals.
Here at Tucker Mortgage, we have a robust physician loan program that takes into account a physician’s unique situation:
- Our program is available to doctors with an MD, DO, DDS, or DMD degree, including dentists, podiatrists, veterinarians and ophthalmologists. (Our program does not include chiropractors, optometrists or pharmacists.)
- We accept employment contracts as proof of income as soon as the contract terms are verified, so you don’t need a lengthy employment history with any particular facility.
- We will finance 100% of a mortgage, up to $1 million, with no downpayment necessary and no private mortgage insurance required for borrowers with good credit (720 or higher).
- We offer additional options, including financing up to $2 million for borrowers with lower loan-to-value ratios and the possibility of loans for borrowers with credit scores as low as 680.
- We offer both fixed and adjustable loan products to better accommodate each borrower’s unique needs, and we also permit gift funds to be used for closing costs, reserves and downpayments.
Our physician loans are available for use on both single and double unit primary residences, townhomes, warrantable condominiums and planned unit development (PUD) homes. (Investment properties, co-ops, second homes and manufactured homes are not eligible for the program.)
If you’re a doctor in need of a prescription for an affordable mortgage and you have good credit, don’t hesitate to reach out to one of our experienced professionals for more information.