What you need to know:
- New Jersey physician mortgage loans are designed to benefit physicians, dentists and other high-earning medical professionals by offering financing options with little or no money down.
- Unlike with a conventional loan, there is no private mortgage insurance (PMI) requirement when using a physician mortgage loan program.
- Physician loans are typically reserved for a primary residence, but some lenders might approve financing for a second home.
New Jersey physicians do pretty well for themselves, with the average physician salary for the state coming in at $215,980. But considering physician student loan debt is usually well over $200,000, finding a mortgage loan can be challenging with such a high debt load.
According to data from New Jersey Realtors, the median home price for a single-family home in New Jersey is $460,000. However, like many states during the pandemic, homes are going for much higher than the asking price in a seller’s market. This can only add to concerns about getting approved for your dream home.
If you’re a doctor or a dentist, you might qualify for a New Jersey physician mortgage loan. This type of loan has exclusive perks, such as mortgage options with no down payment, no PMI and favorable consideration of student loan debt.
Here’s what you need to know about physician mortgage loans in New Jersey.
New Jersey physician mortgage loans: How do they work?
Sometimes called a “doctor mortgage”, a physician mortgage loan is a low down payment mortgage option for physicians and certain other medical and dental professionals. One of the biggest perks is that physician mortgage loans don’t require PMI even with 0% down.
In contrast, a conventional mortgage loan will typically need a down payment equivalent to 20% of the home’s purchase price. Anything less will likely require you to carry PMI which can cost hundreds extra every month.
Other potential benefits of a New Jersey physician mortgage loan include:
- Interest rates that compete with jumbo mortgage loan options if you plan to finance over $548,250, which is usually the conventional loan limit.
- Favorable treatment of student loan debt when assessing your debt-to-income (DTI) ratio.
- The ability to use an employment contract or job offer letter as proof of future income in order to qualify.
However, because a New Jersey physician mortgage loan is a type of jumbo loan (in some cases up to several million dollars), you should exercise caution when moving forward with this mortgage option.
What mortgage product would you like a quote for?
What is Your Occupation Status Currently?
Are you currently working with a realtor?
Are you a veteran?
What most closely represents the price range of the house you’re searching for?
What is your preferred down payment?
What stage are you at in the home buying process?
How soon do you hope to secure a mortgage approval?
How many banks would you like quotes from?
Have you experienced any bankruptcies or short sales?
State where you want to purchase your home
Metro area where you would like to purchase your home
Would you like to add any additional details?
You’ll likely qualify for more than you think with a physician mortgage loan. So, it’s important to limit your home purchase to how much you can realistically afford regardless of how much you qualify for.
7 Lenders worth exploring for New Jersey physician mortgage loans
Although they’re generally referred to as a physician mortgage loan, some lenders will extend the program to dentists and other high-earning professionals. Depending on the lender, there also might be options for those still in residency or fellowship.
Each of the following New Jersey physician mortgage lenders has its own requirements, loan terms and financing options. Be sure to explore all options to find the right fit.
1. Fulton Mortgage Company
Physicians, dentists, pharmacists and veterinarians are eligible for the Fulton Bank doctor loan program.
Key details include:
- 100% financing for up to $1 million, 95% for up to $1.5 million, and 90% for up to $2 million.
- Up to 6% seller-paid closing cost and prepaids allowed.
- Deferred student loan payments (12 months or more) aren’t included in the credit approval process.
This physician mortgage loan program allows borrowers to close on the home up to 90 days prior to starting employment.
2. Huntington National Bank
The physician mortgage loan with Huntington Bank is available to doctors, dentists and veterinarians with an MD, DO, DDS, DDS, DMD or DVM designation. Podiatrists and ophthalmologists are also eligible.
Financing options for borrowers with a minimum credit score of 700 include:
- 0% down for up to $1 million.
- 5% down for up to $1.25 million.
- 10% down for up to $2 million.
For borrowers with a credit score ranging from 680 to 699, financing options include:
- 5% down for up to $500,000.
- 10% down for up to $1 million.
- 25% down for up to $2 million.
This program is limited to the purchase or refinance of a primary residence.
3. KeyBank Mortgage
KeyBank Medical Professional Loans allow medical doctors and dentists to seek up to $3.5 million of financing.
This physician mortgage loan program includes:
- Up to 100% financing, depending on the loan amount.
- Eligible property types include one-unit, single-family homes, attached or detached, condos or planned unit developments.
- Fixed and variable-rate mortgage loans are available.
Note this loan program is for primary residences and second homes occupied by the owner.
4. Northpointe Bank
The Northpointe Bank doctor loan program is available to New Jersey residents, fellows, doctors, dentists, chiropractors, pharmacists, podiatrists, optometrists, ophthalmologists, surgeons and veterinarians.
Financing options include:
- 0% down for up to $1.1 million.
- 5% down for up to $1.6 million.
- 10% down for up to $1.85 million.
- 15% down for up to $2 million.
Alternatively, if you’re an attorney, certified public accountant or PhD holder, you might qualify for financing with as low as 3% down through its professional home loan program.
5. TD Bank
New Jersey residents, fellows, doctors, dentists, podiatrists, oral surgeons are eligible for the TD Bank medical professional mortgage program.
Financing options include:
- 0% down for up to $750,000.
- 5% down for up to $1.25 million.
- 10.01% down for up to $1.5 million.
New Jersey doctors and dentists (MD, DO, DDS, DMD or DPM) are eligible for the Truist doctor mortgage loan program.
Program details for practicing physicians are as follows:
- Up to 100% financing for up to $750,000, up to 95% for up to $1 million, and 89.99% for up to $1.5 million.
- Physicians who are 10 to 15 years post-residency or fellowship can access 89.99% financing.
Licensed residents, interns and fellows in an MD, DO or DPM program may be eligible for up to 100% financing for a maximum loan amount of $750,000.
7. Citizens Bank
The Citizens Bank Doctor Loan program is available to licensed Doctors of Medicine (MD), Doctors of Osteopathic Medicine (DO), Doctors of Dental Surgery (DDS), and Doctors of Dental Medicine (DMD) who have completed residency within the last ten years. It also offers mortgage options for current medical residents, fellows and interns.
The basics of this loan program include:
- Up to 95% financing for loan amounts up to $850,000, up to 89% for loans up to $1 million, and up to 85% for up to $1.5 million.
- Ability to exclude student loan debt if it’s deferred for at least 12 months following closing or use federal income-driven payment in DTI assessment.
- Fixed-rate or adjustable-rate mortgage (ARM) options.
Note the Citizens Bank Doctor Loan is only available for purchases and limited cash-out refinances for primary residences.
Should you take out a New Jersey physician mortgage?
Whether you’re just starting out or have an established career, a large down payment can be burdensome for physicians. Considering there are many New Jersey physician mortgage loans with competitive rates and terms, this type of loan can save you money in multiple ways.
Saving up for a conventional mortgage can delay both personal and financial goals. A New Jersey physician mortgage loan with no (or a low) down payment can get you into a home sooner. But it can also save you hundreds of dollars each month on PMI that is otherwise required with a conventional mortgage if your down payment is less than 20% of the home’s purchase price.
However, if you think you’ll be tempted by the high loan limits, this type of loan might not be best for you. Remember, just because you qualify for a large amount doesn’t mean you should sign for it.
Be sure to shop around for a variety of home financing options to find the best fit for your location, profession and financial situation. Check out our referral page for physician and dentist mortgage loan options by state.