What to Know About Physician Loans Before You Buy in Houston
If you're a resident, fellow, or new attending looking to buy near the Texas Medical Center in Houston, a physician loan could be your most powerful financial tool.
What is a physician loan?
A physician loan, or a doctor loan, is a mortgage built for MDs, DOs, and often DDS, DVM, and other advanced-degree professionals. Residents and fellows are often eligible as well.
Overall characteristics
Zero to low down payment
No PMI (private mortgage insurance)
More favorable DTI (debt-to-income) considerations
Important timing considerations for closing
Many physician lenders will let you close before your start date, with a signed employment letter or training contract as proof of income.
BUT: if your contract depends on grant funding, still has open contingencies, a pending license, a credentialing decision, a visa approval, or a lender unfamiliar with how those timelines work, the closing can stall you right when you can least afford it.
Why is this important?
A contract to purchase a home is just that: a legally binding contract. If you do not close on time, you may be subject to liability if the seller/builder is not willing to renegotiate the closing date.
This is why working with a physician relocation specialist and a physician loan lender who's specifically worked with TMC contracts before is so critical. Having a closing date with leeway is also helpful.
What else to calculate
Don’t forget to calculate the other fixed costs of home ownership.
Property tax rates are higher in Texas (because of no state income tax).
You also need to consider homeowners insurance, and for many parts of Harris County, flood insurance.
And of course, home maintenance/updates.
Reach out to me anytime to start the conversation, or to get my list of vetted, local Houston physician lenders. I’m here to help.
Aditi Pemmaraju, J.D. is the founder of Homes for Healers™, a Houston real estate advisory built specifically for physicians and medical families relocating to, around, or eventually out of the Texas Medical Center.
