We offer Doctor mortgage loans in Colorado (sometimes referred to as physician mortgage loans) which is a program designed for new and established doctors that need simple financing solutions.
What is a Doctor Loan?
Doctor mortgage loans are designed to help upcoming and established doctors secure a mortgage because many doctors have large debt due to their student loans. The idea is that doctors with high potential earnings will be able to get qualified for a mortgage based on these potential earnings.
Reasons for getting a Doctor Loan
- student loan debt is not as important when factoring debt to income ratio
- smaller down payments are required
- signed contracts can be used to prove future income
Borrowers must have one of the following designations and have their student loans deferred for at least one year:
- Medical Resident
- MD (Medical Doctor)
- DPM (Doctor of Podiatric Medicine)
- DO (Doctor of Osteopathy)
- DDS (Doctor of Dental Surgery)
- DMD (Doctor of Dental Medicine)
- OD (Doctor of Optometry)
Qualifying for a Doctor Loan
Here are some important facts to consider when qualifying for a doctor loan:
- You can finance up to 95% LTV (minimum FICO score of 680)
- Income from future primary employment can be considered
- Income from a salary increase can be considered
- In certain cases your student loans can be excluded from your debt to income ratio and in these cases you will need a minimum FICO score of 720.
- You can qualify for conforming and non-conforming loan amounts
When you go through a doctor home loan approval process you will need to be prepared to supply accurate information on the following:
- your recent credit score
- your earnings from at least the last three months
- documentation of your existing debt
- bank statements from the last three months
- information on the property you intend to purchase (purchase price, type of dwelling, year built, etc...)
- verification of the funds being used as a down payment
- employment history
- previous year's tax returns (possibly previous 2 years)
It is important to note that additional information might be requested.
Additional Loan Options
There are more options for doctors when it comes to securing a home mortgage. However, the reason this program exists is because typically doctors coming out of medical school will have a lot of debt, not much in savings, and no established credit making it difficult to qualify for a Conventional loan, FHA, or VA loan. A brief overview of the other loan types is below.
Conventional loans can also be an option as that requires only a minimum of 3% down. Monthly insurance will be required on monthly payments until you have 20% of the value paid off. These loans can also be used for Jumbo loans. Your credit score matters quite a bit with these conventional loans, higher credit scores are typically required and can help you get a much better interest rate the better your score.
FHA loans are a good option for those with some money to put down and have lower credit scores. However, these loans will typically require mortgage insurance throughout the life of the loan. Lower interest rates are possible with these loans so weighing the mortgage insurance vs. the interest rate is something you need to do when comparing this option to other loan types.
If you meet the requirements for a VA loan then it is a great option. These loans can be secured with little to no money down, low interest rates, and no monthly insurance.
Jumbo loans are loans that exceed the max loan amount for conventional loans. These loans will typically carry a higher interest rate. A doctor loan is a great alternative to this because typically the rates will stay the same for larger loan amounts because of the high earning potential of the buyer.