The Mortgage Loan Doctor Is In for Physicians

June 22, 2016 • Author: Tom Lannan, Senior Vice President, Mortgage Banking

Hefty student loan debt can often deter homeownership for individuals just starting their career. This is especially true for physicians and those in the medical field. According to the American Medical Association, more than 70 percent of physicians under the age of 40 have student loan debt and nearly half carry amounts ranging between $150,000 and $200,000.
Increasingly, physicians, dentists, and medical school residents who plan to buy or refinance a home are turning to banks for specialized mortgage products designed to meet their unique financing needs. Physician home loans offer several benefits. The down payment is typically 10 percent or less, with no private mortgage insurance required.
Salin Bank has expanded its lending outreach to the medical community with dedicated staff and home financing solutions. Through its Doctor Loan Program, licensed medical physicians (MDs), doctors of osteopathy (DOs), doctors of dental medicine (D.M.D./D.D.S.), veterinarians, and medical residents are able to use future earnings to make home ownership more accessible and affordable.
As a new medical intern, David Thomas (not his real name) and his wife wanted to purchase a home. He quickly realized a credit history containing substantial amounts of education loans made him ineligible for conventional financing. That’s when he turned to a local bank that specialized in working with physicians and other medical professionals.
“It made a huge difference,” Thomas says.  
There are several features associated with physician loans, including:
*Higher chance of approval vs. conventional financing. In many instances, new physicians and residents are more likely to be approved with a physician home loan and declined with a conventional loan because they don’t meet the guidelines due to student loans, time on job, projected income, or down payment requirements.
*Flexibility to close before starting work. Most conventional mortgage lenders require homeowners to show proof of income before they close on a new home. Some physician home loans allow you to close as far as 90 days before starting a new job.
*Lending specialists who understand unique mortgage needs of physicians. One key benefit of a physician home loan may be the people who are actually helping you with the loan. Lenders who have an intimate understanding of the healthcare and residency process know the right questions to ask and are therefore better able to find a mortgage option that works best for physicians’ special financing needs.
The bottom line: More and more, physician home loans are paving a path to the American Dream of homeownership. Banks and lenders offer different program options, so it’s key to compare rates, fees and, perhaps most important, the personal support you can expect before, during and after the loan is made.