It’s well known that medical graduates often carry a lot of debt. Medical students can graduate owing over $300,000 in student loans which can be crippling. This amount of debt can stand in the way of home buying for doctors, dentists, and other professionals as credit scores dive in the dumpster. What’s the answer? A physician’s mortgage is specially formulated to help you obtain a mortgage by side-stepping your student debt. 

As physician’s mortgage programs go, that offered by US Bank, member FDIC, isn’t the most competitive as it doesn’t offer a mortgage of any type for 0% down, as many others do. But it does come with benefits. The distinct advantage this program offers is that it allows you to obtain financing on a home under construction. Many other programs now out there don’t offer this, and so if you’re building your own home, this could be a selling point. What else does US Bank offer? 

Here’s a look at the overall benefits and drawbacks to their physician’s mortgage program to help you make the best decision when it comes to financing your future home. 

Pros/Cons of US Bank physician mortgage loans

US Bank’s doctor’s mortgage program can potentially help you get ahead faster in home ownership once you graduate, but it does have its disadvantages as well. 

Pros

This mortgage program offers several loan types and comes with some distinct advantages, depending on your situation. 

Variety of mortgage options. According to US Bank, you’ll soon be able to apply for financing on a home with the following as a medical professional:

• 5% down up to $1,000,000
• 10% down up to $1,500,000

Flexible interest rate options. You can get either a fixed-rate or an adjustable-rate mortgage (ARM) for the following:

• 30, 20, and 15 year fixed-rate loan payments
•  7 and 5 year ARM

Available for construction. Unlike many other physician home loans, this program allows you to obtain financing for a home that’s under construction. This is a definite plus if you’re hoping to purchase a brand new home.  

Potential lower monthly payments. Another bonus is the fact that US Bank doesn’t require you to obtain private mortgage insurance (PMI) with a physician’s mortgage. This insurance is a form of protection for lenders in case you default on your loan. PMI is calculated based on the amount of your loan and it can typically add thousands to your bills every year. Being able to skip this fee can potentially save you a lot of money on your mortgage payments. 

Down payment can be gifted. Another benefit to these mortgages is that, even though a down payment is required, someone can give this to you as a gift. If relatives or close friends are in a position to do so, this increases the flexibility of who can qualify for this program. This reduces your overall closing costs.

Cons 

The US Bank doctor loan program does come with some drawbacks. 

Only available to a narrow selection of people. An obvious drawback to this loan option is that it’s only offered to medical doctors, osteopaths, and medical residents. So, if you’re studying dentistry or working as a research professor in a medical field, or doing something else related to medicine, you won’t qualify with US  Bank for a doctor’s mortgage. 

You can only get a mortgage on the home you plan to live in (no refinancing or home equity loans). A doctor’s mortgage through US Bank is only available for your primary residence. Homeowners can’t use this program to refinance an existing home or obtain financing on a second one. 

Minimum credit score. US Bank requires you have a minimum FICO credit score that’s slightly above average, sitting at 710, in order to be approved. And this can be even higher if your loan is above $1M. 

No loans with 100% financing. Unlike many other doctor’s mortgage programs, you can’t obtain a mortgage with 0% down with US Bank. 

No pricey condos. You can’t get financing on a condo above $1M. 

How to apply

To apply for a US Bank physician’s mortgage, you can get started online with prequalification or call 888-764-0587 to speak to a mortgage loan officer. You can start a mortgage application online and have your credit history assessed. 

You may be asked to provide personal information for underwriting such as your:

• Email address
• Complete phone number
• Date of birth
• First, middle, and last names

As with any mortgage origination, you will also be asked to provide additional information such as: 

• A letter offering acceptance for your residency/fellowship
• Your tax returns from recent years
• Detailed information related to your present debt (credit cards, personal loans, lines of credit, etc.)
• Your social security number
• Proof of education
• Your most recent bank statements (savings and checking accounts)

Is using a US Bank doctor mortgage a good idea?

A US Bank doctor’s mortgage can be advantageous as it allows you to potentially qualify for a real estate mortgage with a low down payment while having a credit score of just 710. This can also be a good choice if you’re a doctor looking to finance a home that’s still under construction. While other physician’s mortgage programs often offer a more competitive package, such as 0% down for financing up to $1M, most don’t cover new builds and not all are available nationwide. Depending on your circumstances and where you live, a US Bank doctor’s mortgage could be an ideal opportunity. An agent can help you make the right choice to suit your needs and circumstances. 

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