A physician home loan is a specific mortgage loan product that is available to doctors in the home-buying process.
Physician home loans are also often called: ● Physician Loans ● Doctor Loans ● Doctor Home Loans ● Physician Mortgage Loans ● Doctor Mortgage Loans
|Conventional Loan||Physician Loan|
|Available to anyone who qualifies.||Availability||Available to residents, fellows and attending physicians.|
|Must fit into Fannie Mae / Freddie Mac guidelines.||Guidelines||Does not have to fit exactly into strict Fannie Mae / Freddie Mac guidelines (more flexible guidelines).|
|Similar guidelines from bank to bank.||Have different guidelines from lender to lender.|
|>20% down payment.||Down Payment||Lower down payments (0%, 5%, 10%, 15%).|
|<20% down payment results in PMI.||PMI*||No PMI.|
|Student loan monthly debt burden is calculated using 1% of the loan amount.||Student Loans||Student loan monthly debt burden may be calculated differently, depending on phase of repayment. (See student loan section.)|
|W-2, need minimum of two paychecks.||W-2||You may be able to close prior to starting work with an employment contract or offer letter.|
|1099, requires two years of tax returns.||1099||1099 - two years of tax returns or possibly fewer with an employment contract or well-worded letter.|
|Rates vary slightly from bank to bank.||Rates||Variable - banks may have the same, higher or, in some cases, lower rates than conventional loans.|
|Reserve requirement often times three to six months of PITI (monthly principal, interest, taxes and insurance).||Reserve Requirement||May not have a reserve requirement.|
|May have a cap on how much gift money you can receive.||Cap on Gift Funds||Some do not have a cap on how much gift funds you can receive.|
- Lower down payments (0-15%)
- No Private Mortgage Insurance (PMI)
- More flexible underwriting standards in regards to:
- Student loan debt
- Short work history
- Contract prior to working
Interest rates may or may not be slightly higher on a doctors home loan than with a conventional product. However, that is typically due to having a lower down payment.
Every lender has slight differences in qualification, however, typically you need to:
- Be a physician / doctor
- Be employed
- Have a good credit score (700+)
- Doctor of Medicine, M.D.
- Doctor of Osteopathic Medicine, D.O.
- Doctor of Optometry, O.D.
- Doctor of Podiatric Medicine, D.P.M.
- Doctor of Dental Surgery, D.D.S.
- Doctor of Dental Medicine, D.M.D.
While it's not the main focus of our business, contact us directly if you are a pharmacist or a lawyer in need of a physician mortgage loan. Some of our lenders have products that you may qualify for.
Yes, the lenders we work with have products for physicians at all stages of their medical journey.
Aside from cutting you a break after going through numerous years of school and training, banks realize that you’re a good bet.
- Statistics show that doctors have amongst the lowest, if not the lowest, default rates out of any population.
- Doctors have high future or current earning power.
- Doctors typically have stable jobs less affected by swings in the economy.
Banks have created a product to allow doctors to borrow money for a house in spite of:
- Having little saved up for a down payment.
- A significant amount of student loan debt.
- A short work history
The vast majority of conventional loans are packaged and sold on a secondary market. Therefore, they have to conform to certain rigid guidelines, particularly those created by Fannie Mae and Freddie Mac (Federal Government institutions). Physician home loans are part of a special class of loans called Portfolio Loans. A portfolio loan is one that a lender keeps within its own institution and own investment portfolio. Lenders are therefore able to use more flexible guidelines in qualifying borrowers (such as physicians) for these loans. Because of our low default rates, banks have designed these loans to remove some of the common obstacles that incoming and existing residents, fellows and new doctors face when trying to qualify for conventional loan products.
Yes, they are, however, not every bank / lender is able to loan in every state. Use our Find a Loan form to find out who will lend in your state.
Private Mortgage Insurance
When someone is attempting to purchase a home with a down payment of less than 20%, the lender typically requires the purchasing of Private Mortgage Insurance, or PMI. Its purpose is to protect the lender in the case that you end up in default or foreclosure. The fee is typically around 0.3% to 1.5% of the original loan amount per year.
Yes, that is the case with all of our preferred network lenders. Because of their special consideration for your circumstances, and your low-risk factor, they do not require you to purchase PMI on your Physician Home Loan, even if you have a low down payment.
Deferment / Forbearance
- They may not count these loans at all towards your monthly debt payment.
- They may use the exact current amount you are paying. This is typically much better than using 1% of the total loan amount as might be used by conventional lenders.
- Same as with a conventional loan, but hopefully your income has increased by this point to safely qualify.
Yes it can, especially if you’re trying to qualify for a conventional loan. The amount you’re currently paying for the loan or 1-2% of the loan amount is used toward your debt burden, affecting your debt-to-income ratio and your ability to qualify for a loan.
Refinancing student loan debt and thus lowering your monthly payment may help with this qualification. However, depending on what type of repayment you’re in, you may not want to refinance your student loans at the current time if you’re currently looking to buy a home. Please speak to one of our student loan refinancing partners to get more details and plan your approach. We have student loan refinancing experts that we partner with that will offer incentives to all Curbside clients. Contact us for more information.
A pre-qualification is a large picture initial assessment of the potential buyer. It is a quick estimate of what you might be able to borrow. In a nutshell, it:
- Provides an estimate of your borrowing power.
- Is based on information you provide verbally about your income, employment, assets, credit and bank accounts.
- Does not always include an analysis of your credit report.
- Can often be done online or over the phone.
- Is offered by most lenders at no cost.
- Is neither a pre-approval nor a commitment to lend.
A pre-approval is a more in-depth assessment of your eligibility to secure a loan.
- The lender will ask you to fill out an application.
- You will need to provide documentation to look into your income and expenses.
- The lender will pull your credit score.
- You will receive a conditional commitment in writing for an exact loan amount, allowing you to look for a home at or below that price level.
It varies per lender but as a general rule of thumb, you need to have a FICO credit score > 700 to qualify. However, some banks have a higher minimum FICO score, such as 740.
We have been successful in helping some physicians obtain home loans in spite of a lower score. However, each situation needs to be handled on a case-by-case basis. There are ways to improve your credit score. The first thing is knowing why your credit score might be lower. We recommend obtaining a copy of your full credit score to understand if there are any marks on your report. We recommend getting your free yearly credit report not from one of those “paid” services but from the government recommended AnnualCreditReport.com. You can find out your FICO score through free services like Credit Sesame.
Closing costs are fees paid at the end of the house-buying process, otherwise simply as “closing”. At this point, the title of the property is transferred from seller to buyer. These costs can vary widely based on your location, the type of property you purchase, and the loan-type.
They may include all or some of the the following: Application fee, Appraisal, Escrow Fee, Credit Report, Flood Determination, HOA Transfer Fees, Homeowner’s Insurance, Title Insurance, Loan Discount Points, Origination Fee, Prepaid Interest, Property Tax, Recording Fees, Transfer Taxes, Underwriting Fee.
It can vary widely but usually it comes out to 2-5% of the home purchase price.
Looking at the closing costs list above, there are many parties involved in the sale of a house. These parties all have their own fees. As they say, “There’s no such thing as a free lunch.” Therefore, you will ultimately still have to pay these costs by either accepting a higher interest rate or by bundling the cost into your loan.
Simply put, if you’re an employee, you will receive a W-2.
If you’re an independent contractor (self-employed), you will receive a 1099.
The major difference between the two is how taxes and expenses are handled. This could play into your qualification for a loan.
When trying to qualify for a home loan with a 1099, most conventional lenders will typically require two years of tax returns with no wiggle room. This is mainly because the amount of taxes that are taken out and the reported expenses can vastly affect your net income. This is a government mandated guideline for most lenders. Lenders will use the average of the last two years’ income reported on tax returns as your current income.
The nice benefit of physician home loans is that these loans do not have to follow strict Fannie Mae / Freddie Mac guidelines. Therefore, the lenders may be more flexible with 1099 income. You can often qualify without having a full two years of tax returns. For physicians, they may be able to calculate your income based on your employment contract with a guaranteed base salary and / or hourly rate with guaranteed amount of hours and a strongly worded letter verifying this. We work with lenders that have been extremely successful in this very situation.
Here’s our inclusion criteria:
- Must work primarily with physicians and have a total understanding of the physician loan process
- Accept lower down payments
- Will not charge PMI (Private Mortgage Insurance)
- Have extremely competitive rates
- Flexible with student loan debt
- Will offer concierge service that works around a physician’s busy schedule
- Willing to offer our clients the best rates & discounts
We believe that every borrower’s situation is different and unique, therefore there is a best lender for everyone. It is definitely not the same from physician to physician. Therefore, we take the time to match you with your best lender. This usually results in a better chance to qualify and better interest rates.
We’ve carefully curated our network lenders over years of working with many physicians. We take a good amount of feedback after every transaction to ensure that the physician felt like they had the very best experience and service. This has meant that we have added and removed loan officers over time to find the very best ones at each bank. Trust us, you will get a very different experience based on who you work with, just like not every physician in every field is the same.
There are no obligations to use our specific lenders. Our primary goal is to connect you to the very best lender for your unique situation. Therefore we want to make sure you feel great and confident about the person and company you’re working with. We encourage doctors to do their own research if they’re so inclined, however, we’re also confident in our ability to save you time and headache through the network we’ve created.
We like to say it might matter in the same way that having a different surgeon affects the type of outcome you might have. At Curbside, we believe that choosing the right agent is vital. The right agent will be experienced, put your needs above all else, work tirelessly for you, and be an excellent communicator and educator. Sounds a bit like dating, but it’s the truth - it requires the right mix of confidence, trust, and chemistry.
We’ve carefully vetted all of our network Realtors to make sure they:
- Have extensive experience in working with physicians
- Fully understand how physician home loans work and how to win offers with them
- Understand how to work with a physician’s busy schedule
- Must be a regional expert
- Are relocation experts
- Carry the Realtor designation, which means they adhere to a strict code of ethics
Your agent should absolutely have a good understanding of physician home loans and have a good relationship with these lenders. Competition for homes are fierce in this market and your agent must be able to highlight you and your financing to the seller in order to compete against buyers who might be putting down larger down payments or all cash offers.
Yes, we have network agents in all 50 states, in every city and county.
Absolutely not. This service was created to help physicians in the home buying process at no cost to the physician. We’re meant to be a “Curbside Consult” without any fees.
We get compensated by our network real estate agents to be part of our exclusive network. They are happy to do so because after a heavy vetting process, these professionals have access to a pool of amazingly qualified, physician buyers if we think they are a good match.
Every transaction may result in a different revenue amount for Curbside. However, we pledge that for every one transaction with one of our network agents, we provide a home for one child in need, in addition to access to clean water, food, healthcare, and a formal education.
Disclosures / Confidentiality