Home to the “Gateway to the West” in the form of the St. Louis Arch, Missouri is indeed a transition point between two important regions of the United States. Known alternately as “The Show Me State,” “The Cave State,” and “Mother of the West, ” this landlocked state is bordered by Iowa, Illinois, Kentucky, Tennessee, Arkansas, Oklahoma, Nebraska, and Kansas and has a lot to offer to its citizens, including almost 17,000 working doctors.

For many, owning a home in Missouri may seem out of reach. Data from the Missouri REALTORS shows the average sales price for single-family homes is $289,511. That is a 10.8% increase over last year. There have been 8,138 homes sold in Missouri last month.

For many doctors and dentists who are considering the purchase of a home here, the Missouri physician mortgage loan program may make that easier to do. For qualified professionals, this program may help to reduce or even eliminate the down payment requirement that often limits purchases. If you’re interested in investigating a doctor loan, do your research about how this program works for healthcare professionals so you have all the details needed to purchase a real estate primary residence. If you’re itching to secure your new home because you found one you love on the NMLS, time is of the essence.

Advantages/Disadvantages of physician mortgage loans in Missouri

Taking out a Missouri physician mortgage loan can be a boon for a professional, no matter where they are in their career. It does take careful consideration, however, including weighing both the pros and cons involved in a doctor loan program.

On the positive side, a Missouri physician mortgage comes with:

• Special consideration of student debt
• Loan limits as high as $2.5 million, in some scenarios
• No required PMI payment(s)
• Little to no money down 

Some lenders may even approve a doctor before they have even started working in a position, provided that the employment contract has been signed. This can be extremely helpful for a new doctor moving to a new location who wants to get through the homebuying process before starting a job. Since most doctors might not have a first property to refinance, it’s much easier to avoid trying to save for months or even years to get the right down payment amount.

On the other side of the coin, there are higher interest rates to consider, as can sometimes happen with a physician loan. Lenders will also sometimes require that borrowers open a secondary account at their bank, such as a savings account, because the lenders ultimately want you to become a customer of the bank. Finally, taking advantage of higher limits can be great, but keep in mind that this also makes it easier to get underwater in a home quickly and purchase more house than you can afford. Knowing how repayment works, whether there’s a possibility of refinancing in the future, closing costs, interest rates, and other details associated with taking out this loan can help confirm if this is the right choice for you. The reduced down payment options are very attractive for healthcare professionals, but this can also make for a higher mortgage payment over the loan term. Read through all disclosures and get clarity on how the repayment will work in your monthly budget before committing to a doctor loan. Providers who have an employment contract in hand with a good income may be able to make it work.

Is a Missouri physician mortgage loan right for you?

Now that you know more about these financial products, how can you determine if they are the right fit for you? You can start by considering where you are in your career. If you are one year into a new job, it may not be the right time to take out a mortgage, conventional or otherwise. If you are ready to plant roots, however, a Missouri physician mortgage loan can be one of the easiest routes to approval. 

Are you alright with paying more interest on a mortgage? Sometimes, physician loans have more competitive rates, but sometimes they do not. If this is a ‘price’ you are willing to pay for the convenience of these mortgages, a doctor mortgage may be great for you. 

Examples of doctors who take out physician loans in Missouri

Everyone from young residents to seasoned pros are taking out Missouri physician loans. The following are just some examples of the type of people who are signing up for these doctor-friendly products. 

A general practitioner who doesn’t have a down payment

Housing prices are getting up there in the part of Independence where Matt and his family rent. As a general practitioner, he has a great salary, but he does still have student debt and he has put a lot of his cash into his practice. Plus, even a minimal down payment on a conventional loan would be substantial, given housing prices. 

Instead, Matt has decided to go with a physician mortgage that offers 100% financing. In this way, he can continue to save and support his practice, while also enjoying the benefit of special consideration of his student debt. 

A physician who finds a great rate

Shonda has heard of physician mortgages over the years from colleagues working with her at University Hospital in Columbia. She wasn’t interested at first because of the high interest rates she was seeing. She’s always been careful with debt and credit, and she wasn’t eager to take on a high rate. 

Now, a regional lender is offering a physician mortgage at a competitive rate, making the whole enterprise much more appealing to Shonda. She has decided to take out the loan and buy her first home. 

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