A doctor loan is a specific mortgage loan available to doctors in the home buying process. This type of loan allows residents, attending physicians and other medical professionals to buy a home with a little to no down payment & avoid mortgage insurance. Doctor loans were created by mortgage lenders specifically because conventional loans do not meet the unique financial backgrounds of physicians, dentists, and other medical professionals.
Private mortgage insurance (PMI) is an insurance policy that protects the lender – not you – if you fail to make the promised payments on your home loan. It is arranged by the lender and provided by private insurance companies. A PMI is usually required when you have a conventional loan, but with a doctor loan (and good credit score) physicians can borrow 95% to 100% of the home’s purchase price with no PMI.
Your student loan debt can be a huge factor when applying for a loan, however, a doctor loan will not include deferred student loan payments. It will only take into account what you are paying on your income driven repayment when considering your debt-to-income (DTI) ratio.