A common question you may be wondering is, do doctors get better mortgage rates? Doctors are unique in that they have access to both conventional mortgages and these double-top-secret mortgages knows as physician mortgage loans (sometimes referred to as physician loans, doctor loans, doctor mortgages, etc.). These special home loans for doctors waive the primary mortgage insurance requirement (PMI) on mortgages where the borrow is putting less than 20% down on a home purchase.
Do Doctors Get Better Mortgage Rates? Despite all the variables that go into determining mortgage rates for borrowers, it is, in fact, true that doctors remain some of the most attractive borrowers in the real estate market. Lending money to a doctor is considered very low risk. Lending money is all about risk.
Do Doctors Get Better Mortgage Rates? Due to the lower down payment requirement and waived PMI there is typically a price to be paid to use a doctor loan. That price can come in the form of a higher interest rate (0.125% to 0.25% higher than a conventional mortgage) or in higher fees. However, it pays to shop around.
Why do doctors get better mortgage rates? Lenders assess borrowers on the basis of their risk. Doctors are seen by banks and lenders a low-risk. This means that doctors are at a low risk of missing mortgage repayments due to their strong income and their employability. This means that lenders are quite happy to create a specific policy for doctors and medical professionals.
Some physicians will do well with a specialized mortgage loan, while others may find their best bet is a traditional loan program. Explore what’s available and choose the best deal for you. In ...
Doctors, especially early in their careers, would be disadvantaged by lenders' preference for low-DTI borrowers because most doctors graduate from medical school with six-figure debt.
Not only is a variable rate common among physician mortgage loans, but most of the time the interest rate will be higher – versus a conventional loan. One recent rate comparison found doctor home loans had an average interest rate of 3.75%, compared to a conventional home loan which had a rate closer to 3.5%.
Physician mortgage loans are normally 0.25% to 1% higher than the lowest rate 20% down alternative loan. That’s probably better than PMI, especially for smaller shorter term loans. But it is definitely not the best interest rate option and lenders don’t like to admit that. There is always a cost to not putting anything down.