If you are a doctor, lawyer or other professional with high income, you may qualify for a professional mortgage loan. With a professional mortgage loan, you will be able to borrow a larger amount of money than you could with a conventional loan. This is because a professional mortgage loan generally only requires a 20% down-payment (compared to a 25% down-payment for a conventional mortgage loan).
If you are in the process of buying a new home, chances are you are going to need a mortgage. A mortgage is a loan that you can use to pay for the purchase of a home. If you are a doctor, lawyer, or another professional, you may be surprised at the number of options available to you when you apply for a mortgage. In fact, some of those options may be available to you even if you have had trouble getting a loan in the past.
As a professional, you have many financial demands, but do not want the hassle or risk involved in obtaining a mortgage loan. You have found a company capable of handling your mortgage needs, that is professional, and wants to make your experience with them easy and stress-free. You do not want to worry about any of the red tape or legal technicalities involved in the mortgage loan process. You want a company that has the experience to get the job done quickly, and efficiently, while doing it right the first time.
Following the 2008 financial crisis, the government imposed strict underwriting restrictions on mortgage lenders. To get a conventional mortgage these days, you generally need to be able to demonstrate two years of regular income. They also require a 20% down payment to avoid private mortgage insurance (PMI). And in 2021, your mortgage may not exceed $548,250. These rules are designed to protect the average American. But for some professions, like. B. Doctors and lawyers, they can cause problems.
Graduates of medical and law schools often have little savings for a down payment because of their high student loan debt. People who work in these sectors may also have high debt-to-income ratios, especially if they are resident. And given their expected future income, they may want to buy a home that exceeds the limits of qualified home loans. The good news is that many lenders offer professional mortgages specifically tailored to the needs of doctors, lawyers and other professionals with high debt and income potential. Let’s take a look at how these loans work and which major lenders offer them.
Why do lenders offer professional mortgages?
After a traditional mortgage is completed, most lenders sell the loan to a government-sponsored lender, such as Fannie Mae or Freddie Mac. Therefore, traditional mortgages must meet the standards set by these lenders. Lenders offer professional mortgages in-house, allowing them to set their own underwriting standards. Lenders have several reasons for making the effort to develop and manage professional mortgage products. First, lenders give these loans to people with professions known for their high incomes.
Banks know that while doctors, veterinarians and lawyers don’t currently earn much, each of these professions has high average incomes and solid job security. And that reduces their risk. Second, lenders offer professional mortgages because they want to build long-term relationships with valued customers and offer them banking products. Finally, banks may charge higher interest rates on non-conforming mortgages to offset their risk. Related: How to buy a house with a student loan
What are the advantages and disadvantages of business mortgages?
The first major benefit of business mortgages is that they often have a low down payment requirement. Some do not require a deposit. This is a great benefit for students and residents. Conventional loans require borrowers to pay private mortgage insurance if their down payment is less than 20%. However, business mortgages, such as medical mortgages, do not require PMI to be added to the monthly payment. This can save borrowers thousands of dollars a year. Special mortgages for lawyers, doctors and other professionals can also help borrowers purchase homes that exceed the loan-to-value limits of their respective mortgages.
If there is any downside to professional mortgages, it is that borrowers may be tempted to overspend and buy more homes than they can afford. For example, even with high income potential, buying a $500,000 home with no down payment may not be the best financial decision. In addition, borrowers often receive higher interest rates for non-conforming loans.
6 Lenders offering professional mortgage loans
Mortgage programs for doctors are currently the most popular with lenders. But there are some banks that offer mortgages to non-medical professionals, such as lawyers, certified public accountants (CPAs), architects, engineers and others. Here are six professional mortgage lenders to watch out for.
| Doctors, lawyers, oral surgeons, dentists, accountants. | |||
| Doctors, dentists, lawyers, architects, accountants, engineers, pharmacists, optometrists, ophthalmologists, anesthesiologists, doctoral professors. | |||
| Doctor of Medicine (MD), Doctor of Dental Medicine (DDS), Doctor of Dental Medicine (DMD), Doctor of Optometry (OD), Doctor of Ophthalmology (MD), Doctor of Pharmacy, Doctor of Podiatry (DPM), Doctor of Osteopathy (DO), Physician Assistant, Nurse Practitioner, Certified Public Accountant (CPA), Attorney , Doctor of Veterinary Medicine (DVM), Nurse Anesthetist, Nurse Practitioner , Clinical Nurse Specialist, Airline Transport Pilot (ATP). | |||
| Physicians (MD and DO), pharmacists (PharmD), psychiatrists (licensed as MD), veterinarians, lawyers. | |||
| doctors, dentists, vets | |||
| Physicians (MD, DO and DPM), dentists, optometrists, attorneys, judges, court administrators, paralegals. | Yes (and fourth year medical students). |
BBVA
BBVA offers mortgages to doctors, lawyers, oral and maxillofacial surgeons, dentists and accountants through its professional mortgage program. The maximum amount that can be borrowed under this program is $1.75 million. BBVA can increase the loan-to-value ratio on these mortgages and says that, in some cases, deferred student loans can be excluded from your debt-to-income ratio. In addition to new purchases, borrowers can also refinance existing mortgages. In addition, construction and mortgage loans are available.
Tariff bank
Through Cadence Bank’s Emerging Professionals Loan Program, professionals in the following industries can qualify for a mortgage of up to $1.5 million: If you work in any of the above professions, Cadence Bank can allow you to borrow up to 100% of the value of your home with no down payment. No PMI is required and 5/1 adjustable rate mortgages are available alongside fixed rate loans. To qualify for the Emerging Professionals Loan Program, you must plan to take out a loan on your own. Leasing or investment property is not accepted.
TD Bank
TD Bank offers professional mortgages to physicians, dentists and oral and maxillofacial surgeons. Relevant degrees are MD, DO, DPM, DDS and DMD. TD Bank offers doctors loans of up to $1.25 million with a 5% down payment as part of its medical loan program. It also offers no-money-off loans to doctors up to $750,000. None of these loans require a guarantor. To qualify for a TD Bank business mortgage, you must plan to use the property you are financing as your primary residence. And self-employed doctors must have an income history of at least two years.
George Mason Mortgage
George Mason Mortgage is a subsidiary of United Bank and has a mortgage program for physicians, including veterinarians and psychiatrists (who are licensed physicians). This program offers up to 100% financing without PMI. Here are three basic loan options:
- 100% financing up to 750 000
- 95% financing up to 800 000
- 89.99% funding up to $1 million
In addition to single-family homes, condominiums can also be financed. Variable rate loans (5/1, 7/1 and 10/1) are also available. One of the problems you may encounter with a George Mason mortgage is affordability. Professional mortgages are currently only available to residents of the following geographic areas:
- District of Columbia
- Georgia
- Kentucky
- Maryland
- North Carolina
- Ohio
- Pennsylvania
- South Carolina
- Virginia
- West Virginia
Additionally, for buyers in Kentucky, Ohio and Pennsylvania, the property you wish to purchase must be within 90 miles of your local United Bank branch. The good news is that this program is available not only to practicing physicians, but also to residents and fellows.
KeyBank
KeyBank offers doctors and dentists special mortgages of up to $3.5 million through its Medical Profession Loan Program. Loans to healthcare professionals can have a loan-to-value ratio of up to 100%. In other words, you can get a mortgage with a down payment of zero. As with business mortgages, KeyBank does not require a PMI for these loans. Suitable homes include both owner-occupied and second homes.
SunTrust (now Truist)
SunTrust Bank, which recently merged with BB&T to form Truist, has a loan program for doctors. Loans under this program offer the following mortgage amounts and funding rates:
- 100% financing up to 750 000
- 95% funding up to $1 million
- 90% funding up to $1.5 million.
With these loans, SunTrust wants to focus in particular on young health workers. A maximum allowance of 89.99% applies to doctors with 15 years or more of postgraduate experience. In addition, these doctors must be members of SunTrust Private Wealth Management (or work in a member practice).
Is a business mortgage something for you?
If you are in a profession that requires expensive training, you have already had to wait longer than average to start your career. If you’re a recent college graduate or have gotten your driver’s license, you may be eager to buy a home. With a conforming mortgage, you have to wait until you have worked a few years. If you are just starting your home, you may have to wait even longer before you can qualify for a conventional mortgage. A professional mortgage can help you buy your first home much faster if you don’t want to wait. However, you will likely pay a higher interest rate for a business mortgage. If you choose a business mortgage, consider refinancing to a conforming loan at a lower interest rate after you have a few years of income.
Frequently Asked Questions
Are there special mortgages for lawyers?
If you are a doctor, lawyer, or other professional, you may be eligible for a mortgage with a lower interest rate. However, finding a lender that understands your profession can be challenging. For example, a doctor may be a surgeon, or a family physician. However, some lenders won’t make loans for doctors who are not salaried employees. Other lenders may require a specific type of degree or license, and some will factor in the amount of time it takes for the doctor to pay off the loan with their income.
Some professions are associated with high salaries—doctors, lawyers, CEOs, and the like. As a result, you might think it’s easy for them to get a mortgage. However, some professions also come with high debt—think law school and medical school. So, what happens when income, debt, and the high cost of living are all factors? If you’re a lawyer, doctor, or in similar high-income, high-debt profession, you might be wondering if there are special mortgages with low down payments and reasonable interest rates out there that can help you afford your dream home.
Are there special home loans for doctors?
One of the most attractive aspects of being a doctor is the ability to live well above your means. With an average salary of over $200,000, the opportunity to build a huge savings, and the ability to invest in a medical practice, the idea of being a doctor sounds like a dream come true. However, doctors often get into financial trouble because they live so well above their means. There are a number of options for home loans available to doctors, including FHA loans, VA loans, and home equity loans. These loans offer special rates and terms for doctors as a way to help them finance homes in expensive areas. There are also special home loans for doctors that include built in payment assistance that can help them afford their monthly mortgage bills.
Who qualifies for physician mortgage loans?
Physicians are among the most highly-educated professionals in the country. But that doesn’t necessarily mean that they are able to take out a mortgage loan based on their education or work experience alone. When you have a good credit report and a high salary, you will likely qualify for a mortgage. However, there are other factors that will help you to obtain a physician mortgage loan. With so many people going back to school, there are lots of different financial opportunities available.
If you’re one of the many doctors who decided to go back to school or just finished your degree, you may be considering getting a physician mortgage loan. With so many different options, it can be hard to know where to begin. As a doctor, you have plenty of experience with the ins and outs of the medical industry, so let’s take a look at what it takes to qualify for a physician mortgage loan.
