With competing physician loan programs, you should ask targeted questions about underwriting standards, required down payment and interest rates, whether your employment contract is acceptable, options for deferred or income-based payments during training, closing timelines and fee transparency, lender experience with physicians and mortgage-specific protections, and how refinancing or loan servicing is handled to ensure your long-term flexibility and financial security.
Understanding Physician Loans
When you’re evaluating physician loans, recognize they are tailored mortgages for medical professionals that balance heavy student debt with projected high income; lenders commonly offer low or no down payments (often 0-5%), allow higher loan amounts than conventional limits, and frequently exclude deferred student loans from debt-to-income calculations. For example, a resident with $200,000 in student loans might qualify for a $500,000 mortgage due to adjusted underwriting and employment-contract consideration.
What are Physician Loans?
Physician loans are mortgage products designed for doctors, dentists, and advanced trainees that use specialty underwriting: lenders may accept employment contracts, residency stipends, or future attending salary, permit 0-10% down (commonly 0-5%), offer terms from 15-30 years, and sometimes provide interest-only options during training. Underwriting often treats student loans differently – deferred payments or income-driven plans may be excluded or amortized at a lower rate to boost your qualifying capacity.
Benefits of Physician Loans for Doctors
They let you buy sooner with little or no down payment, avoid private mortgage insurance in many programs, access larger loan limits that frequently exceed $1 million, and leverage employment contracts to qualify despite high student debt. For example, avoiding a traditional 20% down payment on a $600,000 home can free up $120,000 for relocation or office setup, and skipping PMI can save you $150-400 monthly depending on loan size and rates.
Beyond upfront savings, physician loans often speed closings by coordinating with residency programs, permit temporary interest-only payments while you’re in training, and accommodate signing bonuses or guaranteed starting salaries in underwriting. Expect trade-offs: some lenders charge slightly higher rates-typically 0.25-0.50% more than top conventional offers-but the ability to secure a $800,000 mortgage during fellowship can outweigh that premium for many buyers.
Key Features to Look for in a Lender
You should prioritize lenders that combine competitive pricing with physician-specific underwriting, quick turnarounds, and flexible documentation for residents and fellows. Focus on whether they offer PMI-free options, interest-only periods, and loan programs that exceed conforming limits for high-cost areas. Evaluate lock/float-down policies, transparent APR disclosures, and how they treat signing bonuses or future income from contracts. Perceiving how consistently they execute on these features during a real application is the clearest test of suitability.
- Interest rates and APR transparency – compare quoted rate versus APR and ask about origination points.
- Loan programs and terms – fixed (15/30 yr) and ARMs (5/1, 7/1) availability and special physician products.
- Down payment and PMI policy – 0-10% physician loan options and when PMI is waived.
- Maximum loan amounts – common caps at $1M-$2M; some specialty lenders allow higher jumbo limits.
- Income and documentation flexibility – acceptance of employment contracts, future attending income, and resident stipends.
- Debt-to-income and reserve requirements – how aggressively they count student loans and required cash reserves.
- Underwriting speed and approvals – typical turntimes, digital portals, and day-to-close track record.
- Prepayment penalties, lock fees, and float-downs – whether you can reduce rate if market drops before closing.
- Customer service and physician expertise – dedicated teams for physician applicants and escalation paths.
- Refinance and retention options – incentives for refinancing with the same lender or rate-reduction programs.
Interest Rates and Terms
You should compare fixed and adjustable options and watch how credit score, loan size, and LTV affect pricing; physician loans often appear in the market with spreads similar to conventional jumbo pricing. For example, a 0.5% rate difference on a $1,000,000 30-year loan changes your monthly payment by roughly $300-$350, so confirm APR, points, and any float-down clauses before locking. Also check for prepayment penalties and whether interest-only periods are offered during training.
Loan Amounts and Down Payment Requirements
You’ll find physician programs that allow 0%-10% down depending on experience level: residents often qualify for little-to-no down payment, while established attendings may access larger loans with 5% down; many lenders waive PMI for physician-specific products. Typical lender caps sit between $1,000,000 and $2,000,000, but some specialty lenders will underwrite higher amounts based on contract income and reserves.
For instance, a resident with a signed attending contract may secure a $750,000 loan with 0% down and no PMI at one lender, while another lender might require 5% down for the same loan size; lenders also vary on whether they count future bonus income or defer student loan payments when calculating DTI (many accept DTI up to ~45-50%). Always request modeled scenarios showing monthly payments and required reserves under each lender’s rules.
Questions to Ask Potential Lenders
Prioritize specific questions that reveal cost, speed and underwriting flexibility: ask what interest rates and APRs are currently offered, how long rates can be locked (15-60 days), whether they offer 0-5% down physician programs, and typical closing timelines (many advertise 21-45 days). Also probe pre‑approval terms, PMI waivers, and whether they treat deferred student loans as income when calculating your DTI.
Eligibility Criteria
Ask which physician categories qualify: residents, fellows, attending physicians, dentists, and certain advanced practitioners. Confirm minimum credit score (many prefer 700+, some accept 680), maximum DTI (often 43-50% with physician overlays), whether deferred student loans are counted toward your DTI, required employment contract or start date, and if foreign medical graduates, visa holders, or private practice owners are eligible.
Fees and Closing Costs
Request an itemized Loan Estimate showing origination fees (commonly 0.5-1.5% of loan), appraisal ($400-$800), title and recording ($500-$1,200), and any discount points; ask if PMI is waived or billed separately. Also verify prepayment penalties, rate‑lock fees, and whether lender credits can offset your upfront costs.
For example, on a $600,000 loan a 1% origination fee equals $6,000, plus appraisal and title expenses can push your closing costs over $8,000; some lenders offer a 0.25% higher rate in exchange for $5,000 lender credits that reduce cash needed at closing. Compare three Loan Estimates side‑by‑side, check state recording taxes (NY/CA are higher), and negotiate credits or buy‑down points to match your cash flow needs.
Comparison of Lender Options
Comparison Overview
| Traditional Banks | Specialized / Online Lenders |
|---|---|
| Typical down payment: 20%+; PMI required if <20%. | Typical down payment: 0-10%; many waive PMI for physician programs. |
| Underwriting: conservative-two-year income history, strict DTI (43-50%). | Underwriting: physician-focused-counts signed contracts, flexible DTI, considers future income. |
| Rates: market-driven; often standard retail pricing. | Rates: competitive for doctors; some lenders price 0.25-0.75% better for physician products. |
| Closing time: typically 30-45 days; branch support for in-person service. | Closing time: often 7-30 days using e-docs and automated verification. |
| Best if you have strong reserves, conventional needs, and value local branch access. | Best if you’re early-career, have high student debt, or need faster, tailored underwriting. |
Traditional Banks vs. Specialized Lenders
When you compare the two, banks usually require larger down payments (20%+), standard income history, and can take 30-45 days to close; they suit buyers with cash reserves and straightforward finances. Specialized lenders designed for physicians frequently allow 0-10% down, waive PMI, count signed employment contracts or residency income, and often approve with higher student debt-helpful if you’re buying early in your career or need underwriting that reflects projected physician income.
Online Lenders and Their Offerings
Online lenders accelerate underwriting with automated income and asset verification, enabling many physician loans to close in 7-21 days; you’ll commonly see origination fees of 0.5%-1.5% and transparent rate quotes, plus physician-specific options like low/no down and PMI waivers. Before you commit, check how they handle local title/closing logistics and post-closing servicing since speed upfront can be negated by poor back-end support.
Digging deeper, you should verify whether an online lender uses full doc or automated systems, how they treat student loans (some exclude income-based repayment from DTI or accept deferred payments), and whether they offer rate locks during underwriting-features that can materially affect cost and certainty. For example, a physician who used an online lender recently closed in 10 days by e-signing documents and avoided a PMI charge, saving both time and roughly one month of carrying costs; compare similar case outcomes and fee schedules to choose the best fit for your timeline and cash position.
Importance of Customer Service
Service quality affects timelines and costs: you want a lender that answers questions within one business day, explains physician-specific underwriting, and provides transparent fee breakdowns; slow or opaque service can push closings out weeks and increase interim housing or bridge financing expenses by thousands, so prioritize teams that combine speed with deep knowledge of physician contracts, student loans and relocation needs.
Communication Channels
You should expect multiple, reliable channels-phone, secure online portal, email and SMS-with average response targets (e.g., within 24 hours) and access to video or in-person consultations for complex contract reviews; lenders that offer a single portal for documents, status updates and e-signatures typically reduce document-related delays by streamlining borrower, realtor and title interactions.
Support During the Loan Process
You need a dedicated loan officer who guides you through pre-approval, gathers physician-specific docs (employment contract, GME pay stubs, board certification plans), coordinates underwriting questions and lines up title and closing-this hands-on support often shortens underwriting cycles and prevents last-minute surprises at closing.
In practical terms, aim for lenders that can provide conditional pre-approval within 24-48 hours, complete underwriting in 5-10 business days and coordinate closing logistics to hit your target move-in date; for example, a surgical fellow who had a single point-of-contact and a populated document checklist closed in nine days because the lender proactively ordered title, verified employment terms and resolved a debt-to-income discrepancy before the final walkthrough.
Testimonials and Reviews
You should weigh both star ratings and written testimonials when comparing lenders; target firms with an average rating of 4.0+ from at least 50 reviews and prioritize comments that mention underwriting flexibility, disclosure of fees, and actual closing times-physicians often cite loans closed in under 30 days and waived PMI as decisive factors.
Gathering Feedback from Fellow Physicians
Ask colleagues in your department and specialty-specific groups about their lender experiences: how residency or contract income was treated, whether employment letters sufficed, and if any lender required additional reserves; for example, several cardiologists reported one lender accepted future partner-track income, shortening approval from 40 to 18 days.
Resources for Independent Reviews
Check independent sites like Bankrate, NerdWallet, BBB, Google Reviews and the CFPB complaint database to spot patterns-look for lenders with 4.0+ aggregated ratings and fewer than 20 complaints per 10,000 customers; repeated mentions of surprise fees or delayed closings on multiple platforms is a red flag.
Cros s‑reference platform data with physician forums such as Doximity groups, regional medical society listservs, and Reddit threads where members post concrete numbers (rates, closing days, fees); prioritize lenders with consistent praise across at least three sources and a sample size of 100+ reviews to reduce the risk of outlier anecdotes.
To wrap up
From above, when choosing a physician loan lender you should compare interest rates, loan terms, down payment requirements and repayment options; verify lender experience with medical professionals and residency/fellow programs; ask about preapproval timelines, relocation and refinancing flexibility, and total fees; assess customer service responsiveness and documentation needs so you secure a loan that aligns with your cash flow, career stage, and long-term financial goals.
