Many physicians and other healthcare professionals don't actually begin their careers until they are well past thirty years old. Medical school, residencies, rotations, and other trainings take time and money to complete.
And though physicians are highly compensated individuals, all of the student debt they've accrued to complete their education can pose a real challenge. High debt-to-income ratios oftentimes limit their ability to get approved for a mortgage to buy a house.
Thankfully, a number of lenders offer a way around this limitation, in the form of physician mortgage loans.
This article will cover:
What are physician mortgages?
Truist's physician mortgage offerings
Pros and cons
The application process
What is a physician mortgage?
A physician mortgage loan is a type of home loan program for doctors and other health care professionals that carries special rights and privileges not found with normal conventional mortgages. These programs are important because many doctors don’t begin their careers until they are already in their 30s and otherwise may not have the financial savings or credit history required to buy a home.
Since physicians are oftentimes highly compensated individuals, many banks will also waive private mortgage insurance (PMI) as a perk to physician loans.
Though doctors oftentimes graduate medical school with debt to income ratios higher then the maximum threshold for conventional mortgages, lenders will still offer physician loans as long as the root cause of the high debt to income ratio is in fact student loan debt used to finance medical education.
Much of this lender flexibility has to do with the notion of customer lifetime value. Banks know that most doctors we’ll have high levels of assets and investments at some point in the future and want to position themselves to take on additional business from these clients.
What is Truist Bank?
Truist Bank is actually a new lender. It was created as a result of a December 2019 merger between BB&T and SunTrust Banks. Now, post-merger, Truist Bank is one of the top ten largest commercial banks in the country.
With nearly 3,000 branches across the country, Truist offers commercial and consumer banking, home mortgages, insurance products, and asset management to its clients. Today, post-merger, you can find branches in fifteen states, mostly in the Southeast and the Midwest, though there does not need to be a branch near you to do business with them.
Related: First-Time Home Buyer Guide
Truist physician mortgage at a glance
Truist is one of many lenders that offers physician loans.
Let’s take a look at their standard physician mortgage offering. Available to physicians that hold an MD, DO, DPM, DDS, and DMD, Truist offers qualifying doctors up to 100% financing up to a home purchase price of $750,000.
This means that you won't be required to come up with any down payment whatsoever. However, these loans are available only to practicing physicians, dentists, oral surgeons, residents, and fellows that are early in their careers. Those with over 10 years of experience are ineligible for the program without a down payment of greater than 10%.
To qualify for a Truist Bank physician mortgage, you’ll also need to meet the following eligibility criteria:
Be purchasing a home to serve as your primary residence
Be a doctor or dentist (generally)
Be within one of the following eligible states: AL, AR, CA, CT, DE, FL, GA, IN, KY, MD, MA, MS, NJ, NC, OH, PA, SC, TN, TX, VA, WV, Washington, D.C.
However, if you have had a Truist bank account open for more than a year, you may also qualify for a doctor loan in an additional 25 states. These states are as follows:
CO, ID, IL, IA, KS, LA, ME, MI, MN, MO, MT, NH, NM, NY, ND, NE, NV, OK, RI, SD, UT, VT, WA, WI, WY
Remember - you can borrow up to $750,000 without any down payment whatsoever. If you're looking to buy more house than that, which may be necessary in expensive areas like the west coast, you likely can do so, though you will need to come up with a down payment:
5% down payment on homes up to $1 million
10% down payment on homes up to $1.5 million
What types of loans does Truist offer?
Truist offers both fixed and adjustable rate mortgages with a variety of terms. You can choose between fixed terms of 15 and 30 years, while ARMs have options of 5, 7, and 10 years.
There are other options for flexibility too. You can opt to make biweekly payments if it works better for your budgeting. They also do not assess any prepayment penalties.
Pros and cons to Truist physician mortgages
Just as with any other lender, there are pros and cons to taking your physician mortgage from Truist. Let's start with the pros.
Pros:
No down payment required
Never before has it been so easy for a doctor or dentist that just completed training to buy a home, thanks to Truist's 100% financing option. Of course, this can quickly become a con if you buy too much house, but having the option to buy a home without a down payment is a great feature.
Without parting with any more cash than you need to, you'll be able to make headway with your student loan more quickly too. All while potentially buying a house up to $750,000. You'll just want to make sure your income can support it.
Full-service banking
Depending on your personal situation, it could be a real pro to have your doctor home loan through a large bank that offers other products, including business loans, credit cards, and insurance products. If you're a physician looking to open your own practice or purchase some insurance, then having one banking relationship may be more convenient.
Cash-out refinancing
Truist also offers the potential of cash-out refinancing, which is a refinancing process in which you can use the equity in your home to pay off debt.
Generally, you'll be able to access $50,000 in order to use towards your student loans or other qualifying debt.
Do keep in mind that you'll likely pay a higher interest rate on your new mortgage, which will carry a higher balance than pre-refinancing. So in summary, just because you can does not mean that you should though it is nice to have the option.
Cons:
Like we said, no lender is perfect. Here are a couple of things we'd like to see Truist improve about their offering.
High loan limits
So we know it seems like we're being inconsistent with this list. High loan limits sounds like it should be a pro. And largely it is. The reason why we're considering it a potential con is because it could invite doctors to take on more debt that they could comfortably handle.
Medical school debt and a million dollar mortgage would stress us out, but each person should assess their finances prior to taking on any additional debt.
Only physicians and dentists are eligible
We know that these are colloquially known are doctor loans for a reason, but Truist's physician loan program is a little more rigid than some of its' competitors. There are plenty of other healthcare professionals with lots of student loan debt, like nurse practitioners and physician assistants, that may struggle to qualify for a Conventional mortgage for a period of time after school.
Applying for a Truist home loan
Qualifying doctors that want to apply for the physician loan program will want to complete the following steps:
Find a participating loan officer
Provide financial documentation to get pre-approved
Complete your application once you find a home
It is normal to provide LOTS of financial information as part of the mortgage approval and application process. Generally, you can expect to produce any or all of the following:
Recent paystubs
2+ years of W-2 information if working
Job offer letter (if applicable)
Financial account statements
It is all a normal part of the process.
Our Truist application review
We started the Truist mortgage application process so that we can give you an honest review as to the experience. Truist considers securing home financing to be a three step process:
Completing a profile, complete with that financial information that we referenced above
Review your loan options and projected rates
Upload documents to complete your approval
Completing a profile was easy enough, and we were prompted to register with just an email address and password. After completing an account, we were asked a series of basic questions that had answers we could simply click on. Here's an example:
Depending on our answers, we were then asked to provide information needed to populate the application. All things considered, we found Truist's portal to be easily navigable, streamlined, and efficient!
Get our mortgage calculator
Interested in a Truist doctor loan but don't know how much home you can afford? Luckily for you, we've created our own mortgage calculator so that you know exactly what you'll pay each month if you decide to purchase a certain home.
It is super easy to use, and will only ask you to answer the following six questions:
Your home purchase price
Your down payment percentage (play around with this to see how your monthly payments will change)
Your mortgage's interest rate
The term on your loan
Your annual property taxes
Your annual homeowner's insurance
Conclusions
Purchasing a home with a Truist mortgage can be a great option for those that qualify. It is always wise to search for competitive interest rates and the terms you want, regardless of which lender offers them.
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