The physician’s (or doctor’s) mortgage loan was developed to meet the unique needs of physicians (see our Physician’s Loan History page).
Below are the unique features of the doctor’s loan:
- Is tailored to a new resident physician or new attending physician (7-10 years out of residency or less)
- Requires little money down (0-5%)
- Doesn’t require the borrower to purchase private mortgage insurance (PMI)
- Will accept a contract as evidence of future earnings (instead of paystubs the doctor doesn’t yet have)
- Usually requires the physician to open a bank account at the bank from which the mortgage is paid by auto-draft
- Is designed for single family homes. Condominiums may have additional restrictions, including an increased down payment
- Has the same rate whether loan amount is above or below “jumbo loan” limit ($417,000 in central Indiana)
- Some programs even allow the borrower to use gift money for a down payment
- Requires cash reserves equivalent to a few months of Principle, Interest, Taxes, and Insurance (PITI), and a reasonably good credit score
- Often doesn’t calculate student loans toward the loan to income ratio