Key Takeaways:
- Doctors, dentists, optometrists, veterinarians and other high-earning professionals can benefit greatly from a physician mortgage loan in Alabama.
- Physician mortgage programs offer up to 100% financing with no private mortgage insurance requirement.
- Doctor loan options typically allow loan amounts up to $1 million or more while maintaining competitive interest rates.
Almost 5 million people live in Alabama, with over 12,600 of them actively practicing as MD or DO physicians. If you’re one of these physicians or starting your residency program, you might be eligible for an exclusive homeownership program that’s specifically designed for doctors, dentists and other high-salary, high-student-debt professions.
A physician mortgage loan in Alabama can open the door to 100% financing options and higher loan limits than a conventional mortgage. It also lets you buy a new home and settle down before starting your new position.
Let’s explore how you can benefit from a physician mortgage loan in Alabama.
How do Alabama physician mortgages work?
Until recently, physician home loans were limited to medical doctors and dentists. However, some physician loan programs now include chiropractors, podiatrists, pharmacists, ophthalmologists, veterinarians and more.
The main benefits of a physician mortgage loan in Alabama include:
- Optional down payment financing. Most physician mortgage programs offer up to 100% financing for qualifying borrowers. Therefore, you won’t have to spend years saving up for a large down payment or draining your existing savings to buy your next home.
- No private mortgage insurance (PMI). Conventional mortgages require you to carry PMI if you can’t provide a 20% down payment. But physician mortgage lenders don’t require PMI no matter your down payment amount. This holds true even if you choose a $0 down option.
- Special treatment of student loans. Physician mortgages are designed with your career trajectory in mind. So, a large student debt balance isn’t as big of a hurdle as it might be with a conventional mortgage. However, each lender factors student loan debt into their debt-to-income ratio differently.
- Higher loan limits. If you plan to purchase a home that costs more than the conventional loan limit (generally $647,200 but varies in more expensive real estate markets), then you might be able to find better interest rates with a physician mortgage loan in Alabama.
Additionally, new physicians, residents, fellows and interns can qualify for a physician mortgage loan before starting their new position. This perk varies by program, but most physician mortgage lenders require proof of an employment contract with a start date within 60 to 90 days of closing.
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7 Lenders to explore for a physician mortgage in Alabama
If you’re planning to purchase or refinance a home in 2022, here are the top physician mortgage loans in Alabama listed alphabetically. We’ve included ways to directly contact each program’s loan officer who specializes in physician mortgages.
1. First Horizon Bank
Alabama physicians with an MD, DO, OMS or DPM designation can access the physician mortgage program with First Horizon. If you’re working toward a new employment contract, you can close up to 90 days before your start date.
Financing options include:
- 0% down for up to $1.5 million.
- 5% down for up to $2 million.
- 10% down for up to $2.5 million.
Note that a minimum credit score of 680 is required. However, First Horizon doesn’t cap financing based on how long you’ve been practicing. So, this program is great for physicians with more than 10 years of post-residency experience.
For more information, email Brent Eckhardt or call him at 910-260-5152.
2. KeyBank
KeyBank’s medical professional mortgage loan is available to Alabama medical doctors and dentists for purchasing or refinancing their primary residence or a second home.
Most physician mortgage lenders limit their program to primary residences. KeyBank presents a unique opportunity for borrowers looking to finance a vacation home.
Loan amounts are available for up to $3.5 million with financing options up to 100%.
For more information, email J Mansisidor (NMLS #354606) or call him at 757-926-0106.
3. Flagstar Bank
Flagstar Bank offers doctor mortgage loans for home purchases and refinancing in all 50 states for up to 100% financing with no PMI.
Financing options include:
- 0% down for up to $1 million
- 5% down for up to $1.5 million
Flagstar Bank allows anyone with the following degrees to apply: medical residents, MD, DDS, DMD, OD, Doctor of Pharmacy, DPM, DO, RN, physician assistants, nurse practitioners, clinical nurse specialists, ATP pilots, CPA, attorneys, and veterinarians. To be eligible, one must be 10 years or less from starting one’s career.
There is no 30 year fixed rate option. The only mortgage type available is adjusted-rate mortgages (ARMs).
H-1B visas and/or green card holders are eligible.
To be approved for 5% down, you must have at least a credit score of 700. To be approved for 0% down, you must have at least a credit score of 720.
If you’re a 1099 worker, you need to supply documentation of at least two years of income.
Contact Tish Kumar. Email Tish.
4. Regions Bank
The Regions Bank physician mortgage loan is available to pharmacists, nurse anesthetists, nurse practitioners, physician’s assistants, veterinarians, chiropractors, optometrists, podiatrists, MDs, DOs, DMDs, and DDSs in Alabama. Residents and fellows are also eligible.
This program is most definitely something worth looking into, due to no required PMI and no restrictions on how long an eligible medical professional has to have been practicing to be approved for a loan.
One other highlight is that Regions Bank will exclude some deferred student loan payments from your DTI ratio, making it easier to qualify for the mortgage amount you are seeking.
Financing options include:
- 0% down for up to $750,000.
- 5% down for up to $1 million.
You can close up to 60 days before the listed start date on your employment contract or date of transferred employment.
It is important to note that non-permanent visa holders are not eligible.
30 and 15 year fixed-rate and 10, 7 and 5 year ARMs options are available.
Contact Regions Bank for more info. There is no credit check needed for a rate quote. Regions Bank offers fast and friendly consultations.
Related: Regions Bank Physician Mortgage Review
5. Truist
Alabama physicians with an MD, DO, DPM, DDS or DMD can use the Truist doctor mortgage loan program to secure up to $1.5 million in home financing with no PMI. Licensed residents, fellows and interns in an MD, DO or DPM program have access to loan amounts up to $750,000 with no money down.
If you’re a practicing physician and it’s been less than 10 years since completing your training, you can choose from the following loan options:
- 0% down for up to $1 million.
- 5% down for up to $1.5 million.
- 10.01% down for up to $2 million.
To unlock the best financing options, you’ll need a minimum credit score of 720. However, financing is still available for borrowers with a credit score of at least 680.
For more information, email Matt Albert or call him at 336-439-3560.
6. U.S. Bank
Alabama MDs and DOs (including residents and fellows) have access to the U.S. Bank doctor mortgage loan.
Financing options include:
- 5% down for up to $1 million
- 10% down for up to $1.5 million
- 15% down for up to $2 million
Depending on your loan amount, you’ll need three, six or 12 months’ worth of cash reserves.
When calculating your DTI ratio, U.S. Bank will use your required monthly payment. However, if your student loans are in deferment, it’ll use 2% of your outstanding loan balance.
For more information, email Jonathan Brozek or call him at 916-602-4080.
7. S&T Bank
With S&T Bank’s Professional Mortgage Program, physicians and other eligible professionals can get a loan for 5% down with no required maximum loan amount. No restrictions apply on a physician’s age. Newly self-employed (1099 independent contractor) physicians are allowed with a provided employment agreement.
To be eligible, one must be a medical resident, medical fellow, attorney, or hold a MD, DDS, DMD, DO, DVM, or PhD in a non-medical science. H-1B visas and/or green card holders can be served. VA loans are also available; although, you will find better deals with their Professional Mortgage Program, by comparison.
A 700 or higher FICO score is recommended when using S&T Bank.
Cash out refinances are limited to 80% LTV (Loan-to-Value) and no cash out limit.
30, 20, 15, and 10 year fixed rate options and 5 and 7 year ARM’s options are available.
Contact: Mike Wagner. Email Mike.
Related: U.S. Bank Physician Mortgage Review
Is an Alabama physician mortgage right for you?
Physician mortgage loans are a little-known secret weapon for high-income professionals. They have great financing options and come with exclusive benefits that can make the home buying path more seamless.
A physician mortgage loan not only offers the opportunity to take advantage of $0 or low down payment options, but it’s also a tax-efficient way to maximize your finances as a whole when also paying down student debt.
This is because you can deduct paid mortgage interest up to the maximum allowed if you itemize your taxes. Currently, mortgage interest is fully deductible up to the first $750,000 of mortgage debt for homes purchased after December 2017.
Student Loan Planner Founder Travis Hornsby put together a great article about how to use a physician loan to save money on your student debt.
If a physician mortgage loan might be in your future, fill out the form below to receive multiple quotes from trusted physician mortgage lenders to purchase or refinance your next home. You can also reach out directly to any of the mortgage loan officers listed above to learn more about their physician mortgage program and eligibility requirements.
