Physicians and other doctors are in a unique position when it comes to applying for home financing or any other type of loan. While most doctors have a higher-than-average income, many have substantial debt remaining from medical school. For traditional mortgages, high debt would preclude these applicants from getting approval, even while they may be otherwise great candidates. Doctor mortgage loans are a financing solution for these professionals. They have unique characteristics that make them a great fit for young physicians and other types of doctors. Read on to learn more from JZ Mortgage Services, Inc., about doctor mortgage loans and contact us in Bradenton, FL, if to schedule an appointment and get a free quote.

High Debt is an Obstacle to Traditional Financing

Many doctors graduate medical school with more than $100,000 in debt and minimal proven earnings. With this level of debt, few of these young professionals have the spare cash on hand to supply a large down payment on a home. Despite these obstacles, doctors have huge earnings potential that makes them, in fact, great candidates for even high-value mortgage loans.

Calculating DTI without Student Loan Debt

When evaluating physicians and other doctors for home loans, we calculate debt-to-income ratio without including student loan debt. This makes a huge difference for many applicants. It is important that doctor loan applicants have good or better credit – we recommend at least 700 or higher.

Low Down Payment Requirement

By design, doctor mortgage loans have little to no down payment requirement. Few new doctors have enough savings put aside to raise the 20% down payment required of most conventional loans. Additionally, they typically have no private mortgage insurance (PMI) requirement. PMI is typically required of most home loans until borrowers achieve 20% equity, but an exception is made for doctor loans.

Higher Lending Limits

Traditional home loans are distinguished as either conforming or nonconforming depending on if they do or do not exceed lending limits set by government-sponsored entities Fannie Mae and Freddie Mac. In Manatee County, the limit is $453,100. If a loan exceeds this amount, it’s nonconforming and typically has a higher interest rate. With doctor loans, this is not a concern. The rate is the same regardless of whether the loan conforms to the limit or exceeds it.

Bank Statement Loans

While traditional doctor mortgage loans are one option, bank statement loans are another solution for doctors. For these types of loans, doctors supply bank statements – and possibly profit and loss statements – instead of supplying several years of tax documents or W2s. These are especially good for doctors who own their own practices or who are self-employed.

To learn more about your options for home financing as a doctor, contact JZ Mortgage Services, Inc. Our team is local to Bradenton, FL, but backed by the power of several national lenders with competitive interest rates. We offer free quotes and complimentary consultations, so call us today.