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What are Physician Mortgage Loans?

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Medical residents, fellow or attending physicians with a signed contract for employment can qualify for physician home loans. Some lending institutions count dentists, veterinarians, and other doctors as possible borrowers. About ten lending organizations that offer physician loans mortgage including The Bank of America.

On the surface, these loans are incredibly profitable. They offer very low or even no down payment. They don’t require to purchase PMI. Speaking of the jumbo loans, there is no rapidly APR increase. Interest rate doesn’t usually exceed 4.99% but there are certain factors that might change it.

The main goal of the physician loans is to reward the physicians, who have been working for the benefit of the country and its citizens.

There are two groups of common expenses, which every borrower still has to cover: interest rate and closing costs. These loans don’t require to purchase PMI, which can make up to 1.5% of the original annual loan amount, even if the borrower doesn’t make a 20% down payment.

Still, experts have some doubts about the profit of physician assistant student loans. The graph below shows that making a down payment on the traditional loan will end up saving up to $240k in interest and you will pay off the debt 12 years sooner.

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The physician mortgage loans are still a good option when you have no ability to pay off the down payment.