(2022) Bank of America Physician Mortgage Review
Updated: Dec 16, 2022
Most physicians have at least tens of thousands of dollars in student loan debt when they graduate from medical school and complete their residency and final training. And depending on your specialty, you may not really begin to practice until you're well into your 30s.
This is all fine, since physicians are among the highest paying jobs in the country. But things can still be difficult financially, especially early in your career. Your debts can feel restrictive, especially if you're looking to buy your first house.
You may not qualify for a Conventional mortgage given your debt levels and lack of credit history, but all hope is not lost. Many mortgage lenders are now underwriting and offering physician mortgages specifically for doctors and other healthcare professionals in this position.
This article will review Bank of America's doctor mortgage program.
Minimum credit score
Private mortgage insurance
95% up to $1 million
90% up to $1.5 million
Fixed: 15/30 years
ARMs: 3/5/7/10 years
What is Bank of America?
Bank of America (BOA) is the second largest bank in the United States.
BOA offers an entire suite of financial products, including home mortgages, checking accounts, savings accounts, credit cards, investment management services, and more. With over 4,600 retail locations and 16,000 ATMs, BOA offers a national and global presence that could be an advantage for those looking to build a long-term banking relationship.
By offering a physician mortgage program to new doctors and healthcare professionals nationwide, they are able to cultivate long term, lasting relationships with some of the United States' highest earning professionals.
Bank of America physician mortgages
Bank of America offers doctor home loans to medical professionals with the following degrees:
You don't need to be practicing quite yet to qualify either. Residents and fellows may also utilize BOA's physician mortgage program, so long as they have accepted an offer for full-time employment that will begin within 90 days after the date of your loan closing.
The program is available to borrowers in 48 states across the country: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, and Wyoming.
Bank of America will exclude your student loan debt when calculating your total debt to income ratio, and allow you to pay as little as 5% down on mortgages of up to $1 million and just 10% down on mortgages up to $1.5 million. And while these down payment amounts are higher than many competitors, like Truist for example, it is still an advantageous figure.
Plus - most doctors won’t buy on $1 million home directly out of school. If a physician buys a $400,000 home, they’ll only need to put $20,000 down. The program allows you to choose from a fixed or adjustable rate mortgage, and even allows you to close up to 90 days before starting your full time job.
The one unusual aspect of doing business with BOA is that you'll need to have a BOA account. Given their size and scope across the country, this is not a derailer, but interesting nonetheless that they try to force a closer relationship from the get-go.
Finally, these doctor loans come with no private mortgage insurance premiums (PMI).
Terms on BOA physician mortgages
We've already mentioned that you can choose from fixed and adjustable rate mortgages. Their fixed rate loan options include terms of 15 years or 30 years, while their ARMs have terms of 3, 5, 7, and 10 years.
Interest rates will be based on the prevailing market conditions at the time, though you can generally expect to receive a slightly lower rate for a 15 year fixed mortgage than for a 30 year one.
If you're interested in paying off your mortgage as quickly as possible, it may make sense for you to take the 30 year mortgage and make extra principal payments. The minimally lower rate may not be worth the extra risk of locking yourself into a 15 year term in case something happens to you or your family, like job loss. Just make sure that there are no prepayment penalties.
Pros and cons to Bank of America physician mortgages
Every lender offers slightly different physician mortgage programs, meaning that each lender is going to have some distinct positives and negatives. Here are the positives to using BOA.
Great ancillary services
Bank of America has a great reputation on Wall Street for the variety of services that they offer to clients of all types. Doctors and other highly compensated healthcare workers likely will consider wealth management services at some point in the not too distant future, and they are very well positioned to help you handle those needs.
And one-stop shopping is more efficient and easy!
More healthcare workers are eligible
Some lenders' programs are open to only physicians (and sometimes dentists). BOA goes one step further, expanding eligibility to optometrists as well. And while this doesn't change anything for you if you would have qualified anyway, if you are an optometrist, it is nice to see that you have options to apply for a physician mortgage.
Available in 48 states across the county
Unlike home loan programs from regional lenders, the BOA program is available in 48 out of the 50 states across the country. This means that the vast majority of physicians nationally may take place.
This additional flexibility doesn't mean that this program (or any program) is perfect. There are a couple of things we'd like to see Bank of America improve on.
No 100% financing option
Unlike many of its competitors, BOA does not offer any mortgage options without any down payment required. This can be frustrating for residents or fellows trying to buy their first property, as having a 5% down payment on even a modest property can be really hard to accomplish.
Need to be a BOA customer
The other con to this program is that you'll need to have an account with the bank in order to qualify for a doctor loan. Like we said, it isn't a huge deal, but it just feels like an inconvenience for non previous customers to have to handle.
Applying for a Bank of America physician mortgage
Applying to use this doctor mortgage program is actually really easy to do.
1. Find a loan officer to help you
To find a BOA loan officer, you can visit their website, which allows you to filter and find a loan officer in your geographic region. This is recommended, since it will likely assure that you get the most updated information in your area.
2. Gather the financial information needed
Your loan officer will likely need a LOT of financial and employment information from you before you can proceed with the remainder of the application. Likely to be included in this are the following:
Current paystubs/income documentation (if already practicing)
W-2 history (if already practicing)
An employment offer with your designated start date (if not working yet)
Information about your student loans/consumer debt
Current housing details
Statements from financial accounts
3. Get preapproved and find a house
We recommend that you get preapproved for your physician mortgage so that you can move quickly once you find a house. Once you find a house, you can contact your loan officer, who will move to process and advance your application, before sending it to underwriting for review.
Our experience with Bank of America
The Bank of America physician mortgage experience is not a bad one - trust us. But we wish there was more information online. Instead, their website simply gives us a number to call for more information.
It would definitely be nice to begin to complete an application online and get the process started. So if you're looking for a more digital experience from the onset, you may be better off considering Truist, TD Bank, or another lender altogether.
Physician mortgage tips and tricks
You'll need to make sure that the physician mortgage program that you choose is in fact right for you. We've gained a lot of experience in this space, and have developed this list of tips and tricks to help you navigate the world of doctor loans:
Don't use the maximum financing you qualify for: Just because Bank of America has a maximum loan amount of $1.5 million (with a 10% down payment) does not mean that you should buy this much house. These amounts are designed to take into account those doctors that live in the most expensive real estate markets in the country.
Think through what term makes sense for you: It is worthwhile to spend some time really thinking through your different loan term options. As a reminder, the Bank of America physician mortgage program offers 15 and 30 year fixed rates, as well as ARMs with terms of 3/1, 5/1, 7/1, and 10/1. If you're looking for a shorter 15 year term, you will of course have higher mortgage payments. And if you're not looking to commit to those higher months, you can always take a longer term and pay off your loan early by making extra principal payments when your cash flow allows you to.
Find a loan officer that will answer all of your questions: In our opinion, when using an alternate home financing program, like a doctor loan, your most valuable resource will be a good loan officer. You may consider starting the physician mortgage process with Bank of America and other lenders concurrently, and then choose the lender that provides you with the best customer service and competitive rate offers. Make sure you rate shop within a narrow window to limit the impact to your credit.
Get our mortgage payment calculator
Whether you end up taking a Bank of America physician mortgage or not, you'll want to download our free mortgage calculator, built specifically to help you:
Determine how much home you can afford
Estimate your monthly mortgage payments, including escrow
Understand how variables such as purchase price, down payment, your interest rate, and loan term may impact your monthly payments
We recommend that you spend some time modeling scenarios out with our tool. You'll make a number of discoveries, such as understanding how spending an extra $3,000 on your home is unlikely to measurably change your monthly payment, just to name an example.
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