4 Best Physician Mortgage Loans in Alaska

Alaskan lenders extend physician mortgage loans to medical professionals, dentists and other professionals depending on the specifics of their loan program.

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Key Terms

  • An Alaska physician mortgage loan comes with options for up to 100% financing.
  • You’ll pay no private mortgage insurance (PMI) if you go with a physician mortgage, even if you’re putting 0% down.
  • Doctor loan lenders treat student loan payments favorably by calculating based on income-driven repayment plans to make it easier to qualify for a mortgage.

Alaska is known to many as a cold state full of nothing but snow and long, long winter nights. As Alaskan residents know, the state actually has a lot more to offer than meets the eye. As America’s largest state, Alaska is home to the country’s largest national parks, longest coastlines, and some of the most breathtaking natural landmarks in the world. 

For many, owning a home in Alaska may seem out of reach. Data from the Alaska Department of Labor and Workforce Development shows the average sales price for single-family homes is $388,648 as of 2021. Nonetheless, the state had one of the fastest growing rates of homeownership in the country between 2019 and 2020 at 3.4%.  

Doctors and dentists who want to purchase a home in Alaska have the opportunity to participate in the state’s physician mortgage loan program. These programs allow the 2,000+ doctors in Alaska to purchase a house with a minimal down payment or none at all. Loan amounts, interest rates, and other lender rules will vary, so do your research in advance to find the best fit for you once you’ve located your dream property on the NMLS. The home buying process can help you start off in your new location based on a health care services role. Qualifying physicians moving to the state of Alaska can find a new home and finance it through the physician home loan process.

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Alaska physician loans: Weighing the pros and the cons

Doctor mortgages available in Alaska provide many professionals in the “Last Frontier” with the financing they need to purchase their primary home. As with any big financial decision, it is always a good idea to consider both the pros and cons before moving forward. Providers who have job offers as future full-time health care professionals can get a lot of benefits as borrowers when they understand the physician home loan opportunity.

Borrowers like new clinicians will have to provide their full contact information and the contact details for their new employer, too. Physician loans are a possible option for many different clinicians, such as those working in primary care, behavioral health, emergency care, and outpatient services.

What are some of the pros associated with Alaska physician loans? It makes for a pretty impressive list, and includes:

  • Little or no money down
  • Higher limits compared to conventional loans
  • No Private Mortgage Insurance (PMI)
  • Student debt will not impact your eligibility

There are some downsides to consider, too. These unique challenges might be outweighed by the benefits of purchasing real estate with a physician home loan. When deciding whether or not an Alaska doctor mortgage is right for you, remember that they can involve:

  • Taking on more debt
  • Higher allowable rates, on occasion
  • A bank expecting that you will become a customer (i.e. open an account)

Given the high limits on these financial products, Alaskan doctors and dentists taking out these loans could potentially commit themselves to more house than they need or can adequately budget for.

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4 Best physician home loan lenders in Alaska

If you’re in the market for a home in Alaska, consider these physician mortgage loans that are available to state residents.

1. Bank of America

Bank of America is one of the original lenders (if not THE original lender) in the physician mortgage space. With over $3 trillion in assets, it’s one of the largest banks in the United States and chances are good that you are familiar with the company. Not surprisingly, they still offer a doctor mortgage product.

We reached out to a Bank of America mortgage officer to get more details about their program and this is what we learned:

  • 5% down up to $1,000,000
  • 10% down up to $1,500,000
  • Residents and fellows with a job lined up can close on a home 90 days before they start.
  • You can often exclude your student debt from your total debt when you apply for a mortgage.
  • Eligible medical professionals include salaried medical students and medical doctors who are about to begin their new employment/ residency for fellowship within 90 days of closing. Those employed in research or as professor are not eligible. 

While they may not have the most competitive program, they are a solid choice for a physician looking for a doctor mortgage, particularly if you’re already banking with Bank of America.

Of course, if you aren’t already a current Bank of America customer, they will require you to have, or open prior to closing, a checking or savings account. Applicants with an existing account with Merrill or Bank of America Private Bank prior to application also satisfy this requirement.

When it comes to reserves, Bank of America requires PITIA (Principal, Interest, Taxes, Insurance, Assessments) reserves of 4 – 6 months, depending on loan amount.

If applicant’s employment does not commence until after closing, in addition to the minimum cash reserves required, sufficient reserves to handle all debt obligations between closing and employment start date up to an additional 90 days must be verified.

When you’re ready to connect with a loan officer, use our form to quickly match with eligible loan programs based on your specific circumstances.

2. Bank of England

If you thought the Bank of England was in the United Kingdom, you’ll be surprised to find out that the Bank of England is located in England, Arkansas but has the ability to lend in all 50 states (except NY).

We contacted the Bank of England to see if we could gather details about their physician loan program. Here is what we learned:

  • 0% down up to $1,000,000
  • 5% down up to $1,500,000
  • No PMI
  • Only available on 3, 5 and 7-year ARM terms
  • Program aimed at doctors who either seasoned practitioners or just out of medical school (in other words, they work with doctors of all experience levels).
  • Requires a credit score of 700
  • Requires two months of payment reserves.
  • You can be a US Citizen or a Permanent or Non-Permanent Residence.
  • They are able to exclude student loan debt in deferment or forbearance of 12+ months from the debt-to-income calculation.
  • You can only use this doctor mortgage program for single family residences, condos and two-unit properties.

When you’re ready to connect with a loan officer, use our form to quickly match with eligible loan programs based on your specific circumstances.

3. Flagstar Bank

Flagstar Bank was chartered in 1987 and holds around $23 billion in assets, making it a medium-sized bank. However, they punch well above their weight when it comes to mortgages and operate as the sixth largest bank mortgage originator nationally. Not surprisingly, a big part of their success has been a doctor mortgage program.

We contacted Flagstar Bank to learn more details about their physician loan. Here are the key terms that you need to know?

  • 5, 7 & 10 year ARM  products
  • 0% down up to $1,000,000 (first time homebuyer – have not owned in last 3 years)
  • 5% down up to $1,500,000 (first time homebuyer – have not owned in last 3 years)
  • If not a first-time home buyer
  • 10% down up to $1,000,000
  • 15% down up to $1,500,000
  • 20% down up to $2,000,000
  • 25% down up to $2,500,000
  • Fixed products
  • 10% down on the jumbo fixed to a max loan amount of $1,000,000 with no PMI
  • 20% down on the jumbo 30 year fixed with a max loan amount of $3,000,000
  • For first time home buyer (have not owned within last 3 years):
  • 3% down up to $647,200
  • If not a first time home buyer:
  • 5% down up to county limit (with and without PMI)
  • Medical doctors and lawyers are eligible. We weren’t able to confirm that the program is available to dentists and other (non-doctor) medical professionals, but encourage you to contact them to confirm.

The total reported lender fees as of the date of this article were $1395 ($550 processing and $845 for underwriting).

Another benefit of Flagstar is that they can submit a full file to underwriting for an actual loan approval (not pre-approval) without having a purchase contract signed, which makes your competitive with all cash offers and the process less stressful for you. There is no application fee or prepayment penalties. They also offer a float down, buy down, and recast option.

When you’re ready to connect with a loan officer experienced in doctor mortgages, use our form to quickly match with eligible loan programs based on your specific circumstances.

4. Keybank

Keybank has over $170 billion in assets and is the 24th largest bank in the Untied States. They operate throughout 39 states but can originate mortgages in nearly all 50, making them a popular choice among medical doctors throughout the country. One of their key financial products is a physician loan.

While Keybank doesn’t post a lot of information about their doctor mortgage online, we were able to get in touch with a loan officer at the bank to get all the important details. See below for an overview of the program details:

  • 0% down up to $1,000,000
  • 5% down up to $1,500,000
  • 15% down up to $2,000,000
  • No private mortgage insurance
  • Gifts permitted for down payments
  • Can close on the strength of an employment contract up to 90 days prior to the start of employment
  • Minimum credit score is 700
  • Student loan debt can be calculated based on income driven student loan payments
  • Fixed loans offered in 10, 15, 20, 25 or 30-year terms
  • Adjustable-rate mortgages offered in 5/6, 7/6 and 10/6 options
  • No minimum or maximum years in practice for eligibility
  • Reserve requirements are: 2 months (loans under $500K), 4 months (loans between $500K – $750L), 6 months for loans over $750K plus an additional 2 months if closing prior to start date. Retirement accounts count toward reserve requirements.
  • US Citizens, Permanent Residents and H1B Visa holders are eligible
  • California loans require a minimum of 5% down

When you’re ready to connect with a loan officer experienced in doctor mortgages, use our form to quickly match with eligible loan programs based on your specific circumstances.

Is an Alaska physician mortgage loan a good idea for you?

Is an Alaska doctor mortgage the right option for you? There are a few questions you can ask yourself when making this decision. 

First, consider whether it is the best time for you to buy. Ask yourself:

  • Is your job one you foresee yourself staying with in the long term? Over time, even the best job may not be the best fit. It can take more than two years to determine whether you are in a job you want to commit to for years to come. If you are just starting a position, it may not be the right time to commit to a home purchase. 
  • How much home can you afford? Putting 0 down on a home can also make you feel like you can afford more house than you should. Financial experts often advise keeping a home purchase to around two times your annual salary. Committing to a doctor mortgage in Alaska comes with a lot of benefits, but you don’t want to get into a scenario where your mortgage becomes unaffordable for you. 
  • Is getting the lowest rate important to you? Some professionals considering these loans may also want to find the lowest rates possible. Since conventional loans with 20 percent down are usually the best answer to finding a low rate, some doctors may want to forego a physician mortgage, save toward that down payment and get that lower rate. 

Of course, while a physician loan in Alaska comes with some compromises, you do get to establish a solid, long-term relationship with a bank. After all, banks created these products in order to do just that with professionals like you. Entering into one of these mortgages can leave you with a strong financial product throughout your life and career.  

Examples of Alaskan doctors using physician loans

Who are some of the doctors in Alaska taking advantage of physician mortgage loans? The following narratives are good examples of the professionals who are ideal matches for a doctor mortgage. 

Physician who hasn’t saved up a down payment

Ed committed a lot to becoming a doctor, taking out big student loans and working hard at school. Now that he is starting a residency in orthopedics at Providence Alaska in Anchorage, it seems clear that his career is on track and he will soon be earning an impressive salary. 

The problem is that Ed has very little money to put down on a traditional mortgage. An Alaska bank that is known for their physician loans seems like the best way forward; he can get that mortgage with no money down and will likely have a good financial partner in that bank as his career flourishes. 

Dermatologist who wants to maximize leverage

Maxine has established one of the most popular dermatology practices in Anchorage and has managed to build up her savings. A few years back, she invested part of her savings in a portfolio, and it has been performing reliably. She wants to maximize her leverage and keep her investments in place for the time being. Rather than liquidate those holdings to get the cash for a down payment, Maxine decided to go with a doctor mortgage with no money down from a prominent local lender. 

If you’re looking to explore physician mortgage loans in other states, check out our national overview of physician loans as a starting point in your search.

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Joshua Holt

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.

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