Physician Loans
CrossCountry Mortgage proudly supports the medical community. That’s why we offer physician loans designed to provide healthcare workers with innovative, flexible solutions to finance their homes.
What is a physician loan?
Sometimes called a “doctor loan,” a physician 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 are physician loans for?
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 physician 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.
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.
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Positively, physician loans offer benefits such as:
- No down payment required
- No PMI payment
- Flexible eligibility criteria
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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 physician 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 our team today to learn more about physician loan options.
Physician loan FAQs
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Physician loans are aimed at doctors, veterinarians, and dentists, including areas of specialization. However, they can also be secured before you begin your job, and CrossCountry Mortgage may be able to extend loan options before your new employment begins.
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Yes. Physician loans can be a great option for new doctors whose high student loans present challenges in qualifying for traditional loans.
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Yes. Physician loans can be refinanced. Once you pay off some debt and build some equity in your home, you can refinance to a conventional loan, which may offer a better interest rate.
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Physician loans can be invaluable to new professionals struggling to juggle student loans and qualify for a mortgage. Physician loans can help you secure a loan faster than other lending options.
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Doctors repay their student loans through monthly installments, which can take years to complete. In the meantime, physician loans can make it easier for doctors to afford a home while managing school debt.
