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May 14, 2024

2024 Best Doctor Mortgages for Dentists

Dentists, much like other high-earning medical professionals, often find themselves in a unique financial situation when it comes to purchasing a home. The combination of high earning potential and significant student loan debt can complicate traditional mortgage applications. However, dentist mortgages, also known as physician loans, are designed to accommodate these unique challenges, making home ownership more accessible and financially feasible for dentists, even early in their careers.

Understanding Dentist Mortgages

Dentist mortgages are specialized products offered to medical professionals, including MDs, DOs, DMDs, and DDSs. These loans are tailored to individuals who might not qualify for conventional loans due to unconventional income streams or large amounts of educational debt. Here are some key features of dentist mortgages:

  • Low Down Payment: Often, you can finance up to $850,000 to $1,000,000 without a down payment, and larger loan amounts may require as little as 3-5-10% down.
  • No PMI: This is a major highlight of the program.  Although it might not seem like a big deal. This has both positive affordability and tax implications, which can result in significant monthly savings.
  • Flexible Employment Criteria: Dentists who are self-employed or have signed employment contracts showing future income can qualify, which is particularly beneficial for those just starting their careers. Dentists have some of the most complicated employment contracts in the physician world. Which is why it is important to work with a true physician mortgage provider.
  • Credit Score Requirements: Generally, a credit score of at least 700 is preferred, with some lenders requiring 720 for 100% financing.  With the recent tightening in portfolio lending it is important to maintain a high credit score. 

Top 12 Mortgage Lenders for Dentists in 2024

Let’s explore some top lenders that offer competitive mortgage options for dentists:

1. Fifth Third Bank

  • States Served: FL, GA, IL, IN, KY, MI, NC, OH, SC, TN, WV
  • Special Features:
    • Offers Fixed and adjustable-rate mortgages. 
    • Considers income-driven repayment amounts for DTI calculations.
    • Sub specialist allowed
    • One of the first providers of the doctor mortgage

 

2. Wintrust Mortgage

  • States Served: AZ, CA, FL, IA, IL, IN, MN, MO, ND, WI
  • Special Features: 
    • Competitive interest rates. 
    • No restrictions on years out of school
    • Self Emloyed friendly options

3. Berkshire Bank

  • States Served: CT, FL, NH, NY, MA, ME, RI, VT
  • Special Features: Accepts deferred student loan debt in DTI calculations, 

4. First National Bank of Omaha

  • States Served: Limited states including CO, IL, KS
  • Special Features: Up to $850,000 financing without a down payment for qualifying professionals.

 

5. First Citizens Bank

  • States Served: Multiple states including AZ, CA, TX
  • Special Features: Offers 100% financing and an 80/20 mortgage option for quicker equity building.

6. Civista Bank

  • States Served: IN, KY, MII, OH, PA
  • Special Features: Covered appraisal fee, Close 6 months ahead of start date, vacation homes allowed, 2-4 Units considered

 

7. Huntington Bank

  • States Served: Multiple states including CO, FL, MI
  • Special Features: Flexible DTI ratios and options for non-warrantable condominiums.

8. S&T Bank

  • States Served: Many states including AL, CA, TX
  • Special Features: No limit on total loan amount and flexible down payment options.

9. BMO Bank

  • States Served: All 50 states
  • Special Features: Offers zero down payment up to $1 million for early-career dentists. 
  • Fixed and adjustable-rate mortgages available.

10. TD Bank

  • States Served: Several states including CT, MA, NY, NJ, PA, 
  • Special Features: Specializes in loans for medical professionals within the first 10 years of their careers.

11. Truist

  • States Served: Multiple states including AL, FL, NC, GA,
  • Special Features: Offers cash-out refinancing options and competitive terms for new professionals.

Advantages of Dentist Mortgages

  • Flexible DTI Requirements: Excludes or considers student loans favorably, making qualification easier.
  • Strategies: Creates more options when considering buying a home.
  • Guidance Through Application: Loan officers familiar with the needs of dentists offer personalized assistance.
  • Suitable for Private Practice Owners: Tailored for self-employed dentists, helping them maintain cash flow while financing a home.

Considerations

  • Primary Residence Only: These loans are intended for primary residences, not investment properties.
  • Variable Interest Rates: Many dentist mortgages are ARMs, which could lead to higher payments in the future.
  • High Credit Requirements: A high credit score is often necessary to qualify for the best terms.

Alternatives to Consider

Dentists should also consider conventional loans, FHA loans, USDA loans, and VA loans as alternatives, each with its own set of benefits and requirements.

 

Navigating the Application Process for Dentist Mortgages

Understanding the nuances of the application process for dentist mortgages is crucial for securing the best possible terms. Here’s how to approach the application:

Step 1: Assess Your Financial Health

Before applying, review your credit score, debt-to-income ratio, and overall financial stability. Ensure that your credit score is in the optimal range to qualify for the best rates offered by these specialized programs.

Step 2: Gather Necessary Documentation

Prepare all required documents that lenders might need, such as proof of employment, tax returns (especially if self-employed), and any existing debt obligations, particularly your student loan statements.

Step 3: Compare Multiple Lenders

Don’t settle with the first lender you come across. It’s important to compare the terms, rates, and features offered by different lenders. Each may have slightly different criteria or benefits that could be more suited to your situation.

Step 4: Pre-Approval

It is actually ok (and recommended) to get preapproved with more than one lender.  This gives you more flexibility once under contract on a home. Additionally it will give you a clearer idea of who you want to work with as well. 

Step 5: Understand the Terms

Be sure to fully understand the terms of your mortgage offer, including whether it’s a fixed or adjustable-rate mortgage, the loan term, any potential penalties, and how your student loans are treated.

Common Questions About Dentist Mortgages

To help further clarify, here are some frequently asked questions about dentist mortgages:

 

Q1: Can I buy a second home with a dentist mortgage?

  • Most dentist mortgages are designed specifically for primary residences due to the favorable terms they offer. For investment properties or second homes, other types of financing might be more appropriate.

Q2: What happens if my credit score is below the required minimum?

  • If your credit score is below the threshold, consider spending some time improving it before applying, or explore lenders who might accept a lower credit score but expect higher interest rates or a larger down payment.

Q3: Are there any special considerations for dentists who are partners in a practice?

  • Yes, if you have ownership in a dental practice, lenders might require additional documentation regarding your business’s financial health and your share of the income.

Q4: How do adjustable-rate dentist mortgages work?

  • Adjustable-rate mortgages (ARMs) offer an initial period with a fixed interest rate, after which the rate adjusts at predetermined intervals based on a specified index plus a margin. This can be beneficial if you plan to pay off the loan or refinance before the rate adjusts.

Building Your Future with the Right Mortgage

Choosing the right mortgage as a dentist involves balancing your immediate needs with your long-term financial goals. Dentist mortgages offer unique advantages that can help mitigate the burden of student loans and the challenges of a fluctuating income as a self-employed professional.

Conclusion: Making an Informed Choice

As you contemplate homeownership, consider how a dentist mortgage could facilitate this significant step. With benefits tailored specifically to medical professionals, these loans offer a pathway to homeownership that recognizes the investment you’ve made in your career.

Take control of your future today. Contact one of our verified bankers to explore dentist mortgage options and start your journey toward owning your dream home.