5 Best Physician Mortgage Loans in Montana

Montana is part of the Mountain West region of the United States and the 41st state admitted into the Union in 1889. The state is known for its big ranches and stunning landscapes, as well as Yellowstone National Park and Glacier National Park. Commonly referred to as “Big Sky Country” and “The Treasure State,” Montana is also the fourth largest state by area and the third smallest in population density. That population includes some 2,750 active physicians. 

The housing market in the state is problematic for many Montanans, including its doctors. Though real estate is competitive throughout the state, in Gallatin County, homes averaged just 13 days on the market last month. The demand for housing has caused a number of property owners to list their homes for sale, leading to an over 71% increase in inventory for the same month. The median sales price for the area rose over 37% to $590,000 as well. 

For those dentists and doctors who want to buy a home in this competitive market, there could be a bit of help in a Montana physician mortgage loan program. This program makes it possible for qualified buyers to secure a loan with a minimal or even no down payment. 

Pros/Cons of Montana doctor mortgage loans

If you are giving careful consideration to taking out a doctor mortgage in Montana, an essential first step is weighing the pros and the cons involved. The pros are many and offer a tailor for many doctors. With a physician loan, you can get:

• 100 percent financing on a home
• High loan limits that allow you to buy a bigger home
• Special consideration for student debt
• No PMI payments

The special consideration toward student debt is particularly relevant for doctors, many of whom carry this form of debt well into their careers. Loan repayment will kick in during the future, so it can be possible for someone to take on a house that’s more than they can really afford. It’s tempting when you find the perfect spot on the NMLS to come in with no down payment option, but that can also make monthly payments higher in the future. For healthcare providers who are new to the home buying process, a future budget is important.

The downsides of doctor mortgages? There are a few:

• Higher limits can lead to spending more than you should
• Some loans may have higher interest rates

Also, your lending institution may require that you open another account with them (i.e. a checking or savings account.) They are looking to build a relationship with you in the long term. A doctor loan program might be the right fit for a recent medical student graduate or someone who has completed residency and has a new job offer in hand. If moving to the state of Montana for a new job, work with a realtor to help find your dream home on the NMLS and then look into whether or not a doctor loan program could help you get the financing you need.

When choosing lenders, always read through the details of the loan repayment program, too. You need to know interest rates and other requirements that could influence your overall costs, such as whether there are any pre-payment penalties on your mortgage. Doctor home loans are often used to help practicing physicians find a new home and secure it with a streamlined home buying process, but it’s important to find the right lender.

5 Top Montana physician home loan lenders

If you’re ready to learn more about the best physician mortgage lenders in Montana, here are the top options we’ve found through our research.

1. ​​Citizens Bank

Citizens Bank is one of the largest banks in the Untied States. I bet you didn’t know that it’s headquartered in the smallest state: Rhode Island. With over $160 billion in assets, it’s no surprise that Citizens offers a full range of financial products, including a physician loan.

We contacted a loan officer at Citizens Bank to learn more about their doctor mortgage loan program specifically. Here are details you won’t find anywhere else:

• 5% down up to $850,000
• 10% down up to $1,000,000
• Practicing licensed medical doctors (MD and DO), dentists (DDS and DMD), residents and research physicians are eligible
• Licensed residents, fellows and interns can borrow a maximum of $600,00 (or $400,000 if unlicensed)
• No more than 10 years out of residency
• Self-employed professionals are eligible with a two-year history of self-employment income
• New medical professional graduates who are under contract for residency within 60 days of closing and have not yet obtained a license are eligible
• No private mortgage insurance
• 40% max debt-to-income ratio
• Student loan debt that’s deferred for more than 12 months from the date of closing can be excluded from DTI calculations
• Construction-to-permanent loans available with a maximum of 89% financing
• Fixed rate or adjustable-rate mortgage options
• Interest-only option on certain adjustable-rate mortgage options (max financing at 89%)

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.

2. Huntington Bank

Huntington Bank is the 26th largest bank in the United States. Operating primarily out of the Midwest, their mortgage group can service a large part of the country. Huntington has a competitive physician loan product with no money down financing options.

We contacted a loan officer at Huntington Bank to gather information about the doctor mortgage and here’s what we heard back:

• 0% down payment up to $1 million
• 5% down payment up to $1.25 million
• 10% down payment up to $2 million
• Maximum financing up to $2 million
• Eligible degrees are: MD, DO, DDS, DVM or DMD
• Residents are eligible
• Minimum credit score is 700
• 2 months reserves required (6 months for jumbo loans) – reserves can be held in bank or investment accounts
• Gift funds for down payment are OK
• 30-year and 15-year fixed-rate mortgages
• ARMs available in 7/6, 10/6 or 15/6 terms
• Can close on the strength of a new employment contract without paystubs
• No private mortgage insurance
• No prepayment penalty

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.

3. 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.

4. Alerus Mortgage

Alerus Financial Corporation is a publicly traded chain of financial institutions headquartered in North Dakota. They offer banking, mortgage, wealth management and retirement services, including a physician loan for those doctors looking to buy a house.

We contacted a loan officer at Alerus to learn more about their physician loan program and here are the key terms that you need to know:

• Must be within your first two years of practice to qualify.
• 0% down up to $750,000
• 5% down up to $1,000,000
• ARM and fixed rate financing available

Alerus also has a special $20,000 closing guarantee with all mortgages. The $20,000 guarantee is paid to the seller if the loan does not close based on the conditions and expiration date of the approval as outlined in the Alerus pre-approval letter.

In other words, this $20,000 guarantee gives you extra negotiation leverage when competing with all-cash home purchase price offers. If your mortgage doesn’t close, the seller is compensated $20,000 for their trouble.

Of course there’s some fine print on the guaranty so keep in mind that it’s not available for new construction and isn’t applicable if:

• Borrower, seller or any third party cause the delay or elect not to close on the real estate sale.
• Borrower fails to sign required disclosures or provide key documents by the requested due date.

The $20,000 guarantee, if applicable, is available to the seller only and not any of seller’s agents, representatives or related parties.

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.

5. 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 you 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.

Is a Montana physician mortgage loan right for you?

Are you a big fan of Big Sky Country? Do you see yourself staying in your job and in Montana for a good while? Then one of these loans may be great for you. Making a commitment to finance a home should typically only happen if you have spent at least 1 or 2 years in your job.

Also take some time to consider that you may be paying a higher interest rate for this financing. This can rack up over the life of your loan, but many physicians who take out doctor mortgages don’t mind this, especially when conventional lenders won’t approve them due to student debt. 

Examples of doctors who take out physician loans in Montana

Doctor who has a good deal of student debt

When Tucker took out student loans to get through medical school, he never thought about what it would make him look like to the banks. Now that the time has come for him to buy a home, he’s been surprised to hear again and again from conventional lenders that he can’t get approved for a loan. His debt-to-income ratio is too high for the time being, knocking him out of contention. Luckily for Tucker, a local bank is offering doctor mortgages and will give special consideration to his debt, allowing him to purchase his first home. 

Doctor who found a good rate

Max had always heard that physician loans came with higher rates. For this reason, he had held off from getting one, hoping that he would eventually pay down his student debt and save enough to take out a conventional loan with a low rate. He was pleasantly surprised when a colleague at his practice in Boseman alerted him to the fact that a local lender was offering a doctor mortgage with a great rate. Max jumped on the deal, eager to enjoy special consideration of his debt, zero down payment and no PMI. 

Looking for a physician loan in a different state?

If you’re looking to explore the best physician loans in other states, click on your state below.