It is well known that medical and dental schools in the US aren’t cheap. Research completed by EducationData.org in 2021 shows that, on average, medical school graduates in the US have about $241,600 in student debt upon graduation. This is no small amount of cash. This means the average medical school graduate owes far more than most college students with up to six times as much debt owing.
As a result, without the existence of specialized loan programs like the Regions Bank physician loan, buying a home could be elusive for many doctors and dentists for several years as they start their careers.
Owning real estate is very often a good investment in the US. Purchasing your own home is a great place to start. By taking advantage of lender loan programs tailored specifically to borrowers completing medical residencies and full-fledged physicians, you can potentially get ahead faster and start your life on the right foot after graduation.
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Pros/Cons of Regions physician mortgage loans
Upon graduating from medical or dental school, you may find you not only have immense student loans to pay back but a lower salary, minimal savings, and a lower-than-average credit score. With the Regions doctor mortgage loan program, your debt doesn’t need to keep you from starting your life. Here’s a run down of the pros and cons involved in this loan program.
Originating a doctor’s mortgage with Regions Bank comes with several advantages.
Available for residents, fellows, and physicians
Region’s mortgage loan program is available to a large pool of applicants including residents, fellows, medical physicians, doctors of osteopathy, and doctors of dental medicine. If you are a medical professional who falls within one of these categories, it could be a good idea to apply to this doctor loan program.
Contains special credit allowances
Unlike conventional mortgages, with this lender program there is no down payment required on a mortgage of up to $750,000. Mortgages of up to $1 million require just 5% down, offering a lower cost option. In addition, some deferred student loan payments are excluded when Regions calculates your debt-to-income ratio, which helps if your student loan debt is high.
Lower monthly payments
Another attractive feature of this physician home loan program is the fact that you do not need private mortgage insurance (PMI). PMI is often required when obtaining a conventional mortgage, and so this loan can result in lower monthly payments. This can add up to considerable savings over time.
You can expedite the closing of your loan before you begin your employment, and track its progress. This can be done easily by uploading your documents via the Regions’ online Loan Application Status Portal. It’s easy and intuitive to use. The lender has invested a lot of resources in helping medical professionals through the home buying process.
As with any loan program, there are some potential pitfalls to consider with Regions’. These include the following points.
No construction loans
If you are hoping to get a mortgage to construct your own home from the ground up, you will have to look for other mortgage lenders. This specialized mortgage only covers existing homes and doesn’t apply to construction loans, meaning you won’t be able to get a construction doctor home loan through the underwriters.
Another drawback to Regions’ doctor mortgage loan program is that this mortgage product is only available in certain states, meaning the program isn’t nationwide. If you read the disclosures, you’ll see that this loan program is available in AL, AR, FL, GA, IL, IN, IA, KY, LA, MS, MO, NC, SC, TN, and TX. If you are planning on living and working elsewhere, you will have to look at other options.
The risk of taking on too much debt
Getting a mortgage on a primary residence always involves a certain amount of risk. Often, the value of a home goes up as time passes but history shows this isn’t always the case. Because of this, it is wise to be careful about where and when you choose to buy a home.
If your home goes down in value while you are still paying it off, you could be forced to pay the bank tens of thousands of dollars or more should you choose to sell during this time.
Also, by using more of your available cash for closing costs and less for a down payment (thanks to the doctor loan), you may be less sensitive to closing costs in general and inadvertently spend more money. Run the numbers with a calculator to make sure you are comfortable with the total financial package (i.e. the closing costs, repayment terms, etc.).
How to apply
To apply for this loan program, visit the Regions’ Doctor Mortgage Program page online. Click on the Inquire Now button and send an email. This should include:
- Your name
- The city in which you intend to purchase or refinance a home
- Your state
- Your contact phone number
When applying for your loan, you will need to provide other general information to your loan officer. This can include:
- An offer letter for your residency/fellowship
- Recent pay stubs
- Tax returns from recent years
- W-2 forms from the last two years if you are employed
- Information on your outstanding debt
- Proof of education
- Social security number
- Contact for most recent landlords
- Recent bank statements
Is using a Regions doctor mortgage a good idea?
Applying for a Regions’ physician’s mortgage can be a great idea, depending on your particular financial situation and other pertinent factors. Regions offers competitive down payment and loan amounts and gives you options for fixed rate or variable interest rate loans.
As mentioned above, buying a house always incurs a certain amount of risk. By applying for a doctor’s mortgage you can potentially stand to gain considerably through lower monthly payments and the opportunity to own a home without needing to supply a downpayment.
If you have questions about your eligibility (e.g. if you’re self-employed), we recommend that you get pre-approved before you start making offers on NMLS houses.
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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.