Whether you’re drawn to the bustling city life of Los Angeles or San Francisco or prefer the tranquil charm of the Central Valley’s small towns, California offers a diverse array of settings that cater to every lifestyle. From the breathtaking vistas of Yosemite Valley to the sun-drenched deserts of Southern California, the Golden State boasts unparalleled natural beauty and cultural richness.

California’s thriving healthcare industry attracts many dentists to call it home. According to data from the Bureau of Labor Statistics, 18,820 dentists have chosen to establish their practices in this Western state.

However, living in California comes with a hefty price tag, with housing costs soaring to new heights. According to the FED, the median listing price of a single-family home in California stands at an astonishing $759,500, posing a significant challenge for dental professionals aspiring to own a home. 

Fortunately, specialized dentist mortgage programs are available to alleviate this burden, offering tailored solutions to help dentists in California achieve their homeownership goals without undue financial strain.

What are the main advantages of California dentist mortgages?

A California dentist mortgage offers several key advantages tailored to the unique housing market and financial circumstances in the state:

• Lower Down Payments: Dentist mortgages in California often feature lower down payment requirements compared to traditional mortgages. This can make homeownership more accessible for dentists who may not have substantial savings for a large down payment.
• No Private Mortgage Insurance (PMI): Many dentist mortgage programs in California waive the need for private mortgage insurance (PMI), which is typically required on conventional loans with down payments less than 20%. Eliminating PMI can result in lower monthly mortgage payments, saving dentists money over the life of the loan.
• Flexible Eligibility Criteria: California dentist mortgages typically have more flexible eligibility criteria compared to traditional mortgages. Lenders take into account dentists’ unique employment situations, such as irregular work schedules or high student loan debt, making it easier for them to qualify for a mortgage.
• Specialized Programs and Incentives: Dentist mortgage programs in California may offer specialized incentives and benefits, such as down payment assistance programs or loan forgiveness options for dentists serving in underserved areas. These programs aim to support dentists in achieving their homeownership goals while addressing their specific financial needs.

Overall, a California dentist mortgage provides valuable financial assistance and support tailored to dentists, helping them overcome the challenges of purchasing a home in a competitive housing market like California.

The pros and cons of pursuing a dentist mortgage in California

Considering whether to pursue a dentist mortgage? Here’s a breakdown of the advantages and disadvantages:

Pros include several benefits tailored to dental professionals:

• Dentist mortgages often feature more flexible eligibility criteria.
• Some dentist mortgages waive the need for private mortgage insurance (PMI).
• Lower down payment requirements may be available.
• These mortgages accommodate the unique work situations common in the dental field, such as irregular schedules and multiple jobs.

However, there are some drawbacks to consider:

• Dentist mortgages may be less common and harder to find compared to traditional mortgages.
• They may come with additional fees or costs.

When evaluating whether a dentist mortgage is right for you, consider these factors in conjunction with your financial circumstances.

If a traditional mortgage loan was not a fit for you, you’re not alone. Plenty of medical professionals like medical doctors, medical residents, interns, veterinarians, CRNAs, pharmacists, and podiatrists find it difficult to get approval for a conventional home loan. These borrowers may need to shop around to find the right fit. For borrowers with a DMD (doctor of dental medicine), DDS, DPM, or DVM designation, you could use your start date at a new job to get approval for your primary residence loan amount. Alternative loan options are out there for healthcare professionals with an employment contract for a role in California.

One of the most common examples are those for medical doctors, known as physician mortgage loans, doctor mortgage loans, or physician home loans. Loans that would work for most borrowers, such as conventional mortgages from Keybank, US Bank, Bank of America, Truist, or other equal housing lender/member FDIC location may not work for healthcare home buyers. The home buying process pathway is much simpler when you have an offer letter or employment contract for a new role, since this opens up mortgage options for you.

Check various factors for every loan to compare, including things like:

• Interest rate (Fixed rate vs. adjustable rate mortgage)
• Debt to income ratio (DTI)
• No PMI
• Chances for refinancing/timeline to refinance
• Other underwriting rules
• Minimum credit score
• Low down payment options
• Monthly payments
• Disclosures
• If self-employed dentists can apply
• Repayment terms
• If jumbo loans are eligible
• If you can use it for an investment property

Once you’ve looked at all the loan lenders and talked to a loan officer, a good next step may be applying. The mortgage lender should be able to give you more clarity on the timeline for application, too. A real estate agent could help you identify a shortlist of properties, or you can search on the NMLS.

Examples of dentists who take out dentist mortgages in California

Dr. Owens is facing something even more daunting than getting her degree—purchasing an apartment in San Francisco, where exorbitant housing prices pose a significant barrier to homeownership. Despite her steady income and diligent savings habits, Dr. Owens finds herself confronted with the reality that a traditional down payment would deplete her hard-earned savings entirely.

Undeterred by the steep costs, Dr. Owens explores alternative financing options to navigate the competitive San Francisco real estate market. In her quest for a viable solution, she learns about dentist mortgages, specialized loan products designed to support dental professionals like herself in achieving their homeownership goals.

With the prospect of a dentist mortgage, Dr. Owens sees a glimmer of hope amidst the formidable housing landscape of San Francisco. These tailored financial products offer benefits such as reduced down payments and lenient eligibility criteria, providing Dr. Owens with a viable path to secure an apartment without draining her savings entirely.  

Dr. Zabar, a successful dentist, dreams of owning a second home in Palm Springs, drawn to its serene landscapes. However, navigating the competitive real estate market poses financial challenges. Exploring options, Dr. Zabar discovers the benefits of a dentist mortgage, tailored to professionals like him. With this specialized financing, he aims to turn his dream into reality, forging ahead to secure a peaceful retreat in Palm Springs.

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Joshua Holt is a licensed mortgage loan originator (NMLS #2306824) and founder of Biglaw Investor. His mortgage expertise lies in the areas of professional mortgage loans, particularly for lawyers, doctors and other high-income professionals. Prior to Biglaw Investor, Josh practiced private equity mergers & acquisition law for one of the largest law firms in the country.