Frequently Asked Questions
A Physician loan is a special home mortgage with attractive terms and unique qualities not found with other traditional loans. It is only available to doctors and dentists.
This special loan is offered to graduating medical/dental students, residents and practicing doctors (MDs, DOs, Dentists and Veterinarians). You either need to be a U.S Citizen, have an H1B VISA or be a permanent resident alien.
Depends. Due the PhysicianLoan’s unique underwriting and the fact that the loan must be held in the portfolio by the lender until it is paid off, just a handful of institutions in the U.S. can offer a true PhysicianLoan. Many companies market and promote loans for doctors, but these are typically re-branded FHA loans or modified Fannie Mae loans and not true Physician Loans. Unsuspecting doctors can run into issues and challenges later in the process, jeopardizing the approval, with a loan that is not the correct fit.
Two of the main benefits with a true PhysicianLoan: 1) Less down payment requirement, and 2) No mortgage insurance is needed. Additionally, underwriting terms in the loan make it easier for doctors. For example, a doctor is allowed to close on a loan up to 90+ days before the new job begins. Most other loans require you to have started your job so you can show at least one paycheck before being allowed to purchase the home.
The PhysicianLoan is known as a Portfolio loan and would fall under Conventional financing. However, no secondary market exists for a PhysicianLoan (meaning the lender cannot sell the loan to another bank right after closing, as is often done with conforming loans). The PhysicianLoan is not considered a Conforming Loan (Fannie Mae or Freddie Mac) or a government loan (FHA or VA).
Of course there is a catch — two, in fact. First, to qualify for a PhysicianLoan, you must be a doctor. Second, you must have excellent credit. The qualified designations that we consider are MD, DO, DDS, DMD and DVM — basically medical doctors and dentists. However, we recently opened eligibility for Veterinarians, as well. Sorry PhDs. While we respect your title and address you as “doctor,” we can’t offer you this particular loan.
One word: statistics. It is statistically proven that doctors who have excellent credit are unlikely to default on a mortgage. While offering a loan with little to no money down, no PMI, higher debt ratios and low rates may seem to most lenders as a bad investment, we know differently. In fact, we have a nearly 20-year track record offering this loan and a near zero default rate. As a result, we only offer this loan to doctors, not to the general public.
Nothing. It’s free to Pre-Qualify with PhysicianLoans. In fact, you should never pay a penny to any company to get Pre-Qualified. Red flags should be immediately raised if a Loan Officer or mortgage company asks you for up-front money. Your best move? Run, don’t just walk away. Once Pre-Qualified, you should never feel pressured or under any obligation to continue a transaction with a Loan Officer once Pre-Qualified. You can walk away at any time, for any reason.
It’s only semantics at PhysicianLoans. Both terms are used in the industry, but it depends if you refer to a loan that is manually underwritten (by a live person) or one that is run through automated underwriting (by a computer). A true Pre-Approval means your file has been run through underwriting, live or automated. Most loans in the U.S. are run through a computer-automated underwriting process that offers Pre-Approvals. However, those systems are not designed for a portfolio PhysicianLoan. Our loans are all manually underwritten, but to save you time, we don’t require the submittal of all paperwork upfront that can delay underwriting. Our Loan Officer and Processors are trained to review your file, just as an underwriter would. After all, we created these guidelines and while “outside the box” from traditional lending, you either fit in our box, or you don’t.
After checking your credit for credit score qualification, we issue a Pre-Qualification because we strive for accuracy in the terminology we use. At PhysicianLoans, a Pre-Qualification is as strong as a Pre-Approval at other companies. If your Real Estate agent has questions about the kind of documentation we provide, the agent can speak directly with your loan officer to ensure the letter satisfies the needs of all involved parties. Pre-Qualification at PhysicianLoans means that your credit has been pulled, your loan officer has assessed your scenario, but an underwriter has not yet reviewed all supporting documentation in your file. Having a Pre-Qualification in hand is what allows you to look at home and make offers as a qualified buyer.
Three Credit Repositories hold your credit rating in the U.S. — Experian, TransUnion and Equifax. Your middle credit score of the three will be used to determine your qualification for a loan. Most of our loans for doctors require a middle credit score of 700. However, we do have a loan available for a 680 middle score. Note that some of the larger loans will require a middle credit score of 720.
About Credit Scores
Some reports have errors, so we look at your credit report to determine the cause of a low score and if it can be repaired. A great reason to get Pre-Qualified earlier rather than later. One of our loan officers will offer you steps to take in repairing the credit yourself, or will suggest how we can help. Since we have direct credit bureau access, we can often help to repair true errors. While we don’t make money on this service, we must pass along any direct charges from the credit bureaus. DO NOT hire a credit repair company; most take your money but don’t provide the promised service.
Once your credit is at a qualifying level, you may proceed. However, no exceptions can be made if the score is just shy of the threshold. The reason this loan works so well and why we offer such a great program is because we limit it to doctors with good credit scores. So, repairing your credit first is mandatory. Just to be safe, we ask medical students and doctors to pull their credit 6 to 12 months prior to when they plan to buy a home. That provides plenty of time for repair of any credit errors.
About Closing Costs
Estimated closing costs include lender fees, attorney fees, title insurance, taxes, etc. Many of these fees vary from state to state. The average of all closing costs is three percent. In some states less (specifically the south west), and in some states fees are more. For example, Pennsylvania has a high real estate tax when purchasing a home, so plan for at least four percent. Based on the city in which you are buying, your Loan Officer will provide you with a general estimate.
About The Loan Process
Two employees of PhysicianLoans will be assigned to you: the Loan Officer and the Processor. Each of our loan officers hold licenses for multiple states. He or she is your primary day-to-day contact from time of application through the day of closing. The Processor will be the one who handles much of the paperwork and will be working behind the scenes. You may be in regular communication with the processor, as well as your Loan Officer.
About The Company
Absolutely not. PhysicianLoans is a brick and mortar company headquartered in Ohio. Our large web presence is just one of our storefronts and many doctors do find us online first. However, we were offering these loans even before every company had to have a website just to do business.
In 1993, husband and wife team Moshe and Sarah Frank founded the company in Columbus, Ohio (Go Buckeyes! But don’t worry; we do plenty of loans in Michigan). While the company always served doctors, we began specializing in serving the medical community in 1997.
Our longevity is due to the excellent care of our clients. We realize the doctor community is a small one — if we treat you right, you will tell others. If we don’t, you will really tell others. Moshe Frank stressed to employees the importance of customer satisfaction, so he took a “top down” approach to the company maintaining a high ethical standard. That’s how he did business and how he expected things to go. Today, every employee understands this ethic. We have an A+ Rating with the Better Business Bureau and are trusted by medical schools across the country to provide informational home buying sessions on campus. Doctors speak highly of us in blogs and students and residents sing our praises in chat rooms.
Still Have Questions. We have answers.
Your mortgage needs are important to us and we are committed to honoring your time by providing a variety of ways to contact us. Email, phone or on the Internet — feel free to use the method that works for you.