What Are Doctor Loans and How Do They Differ From Regular Loans?

Doctor loans are specialised financial products tailored specifically for medical professionals like physicians, dentists, and veterinarians. These loans differ in some key ways from regular home loans and here are some key aspects:

• Eligibility: Only licensed medical doctors, dentists, optometrists, podiatrists, and veterinarians can qualify for doctor loans. Often, medical residents, fellows, and doctors just starting their practice can also qualify.
• Down Payment: Doctor loans usually require a lower down payment than regular loans, so doctor loans provide easier financing.
• Debt-to-Income Allowances: Doctor loans enable applicants to qualify for larger loan amounts relative to their income. Common debt-to-income ratios lending institutions allow is around 50-65%, whereas most regular loans limit ratios to around 40%.
• Application Process: The paperwork and verification process to get approved for a doctors loan is more simplified since assets and reserves are often not required to be documented. This streamlines qualifying.
• Rates and Fees: Compared to typical regular loans, doctor loans can carry slightly higher interest rates and origination fees, making the total borrowing cost more expensive in most cases.