Best Physician Mortgage Loans in Connecticut

Physician loans help doctors who might not have a lot of savings or who have a lot of student debt get approved for a mortgage.

They have relaxed underwriting guidelines and often don’t require money down on the home, allowing doctors to borrow much higher loan limits than traditional loans.

Before borrowing a physician loan, be sure you understand what’s entailed.

9 Best Connecticut Physician Home Loan Lenders

I’ve narrowed down the top 9 banks with Connecticut’s best physician mortgage loans to help you find what you need.

1. BMO Bank
2. TD Bank
3. KeyBank
4. First Horizon Bank
5. Citizens Bank
6. Huntington Bank
7. Truist Financial
8. US Bank
9. Evolve Bank & Trust

1. BMO Bank

• BBB Score: A+
• The JD Power Score: 805

BMO Bank is one of the country’s top ten banks. They’ve been in business for over 140 years, offering Connecticut doctors the option to secure financing before they meet the conventional loan guidelines.

The BMO Bank physician loan program is available to residents, fellows, and doctors for the first ten years of their careers. However, unlike most lenders, BMO Bank offers the program after you’ve been a doctor for ten years, but you must put down at least 10%.

The BMO Bank doctor loan program is available on 1-2 unit properties, including single-family, PUDs, and condos.

BMO offers three financing options in Connecticut:

1. 100% financing up to $1 million
2. 95% financing for $1 – $1.5 million
3. 90% financing for $1.5 – $2 million

Like many banks, BMO Bank limits its physician loan products to the following:

• MD
• DO
• DMD
• DDS

BMO Bank doesn’t charge PMI, and you can close the loan as much as 90 days before you start your job if you have an employment offer letter.

2. TD Bank

• BBB Score: N/A
• The JD Power Score: 837

TD Bank coined itself ‘America’s most convenient bank,’ thanks to its many products and services, including physician mortgage loans in Connecticut. TD Bank is also on the country’s list of ten largest banks and offers an attractive doctor loan program.

What’s different about TD Bank’s doctor loan program is the down payment size you’ll need. They allow no down payment on loans up to $750,000, but you’ll need a 5% down payment on loans up to $1,250,000 and 10% on loans up to $1,500,000.

TD Bank offers its program on many properties, including single-family homes, PUDs, condos, and co-ops. Borrowers never pay PMI, and you can close on a loan up to 90 days before starting your job if you have an active employment contract.

However, the one unique qualifying factor TD Bank has is that you must be a TD Bank customer to apply for the doctor loan program. Like most banks, though, they work with doctors with a high debt-to-income ratio because of student loans.

3. KeyBank

• BBB Score: A+
• The JD Power Score: 809

KeyBank offers great physician loan programs in Connecticut. Physicians can choose between a fixed or adjustable-rate loan, and like most lenders, they don’t charge PMI even with a low down payment.

Their high loan limit makes KeyBank stand out from others on this list. They allow loans up to $3.5 million if you prove you can afford it. Most banks limit doctor’s loans to $1 to $2 million.

Doctors can finance a primary, vacation, or investment home, which is another unique factor of KeyBank. Most lenders only allow physician loans on primary residences.

You can apply for the physician loan on most property types, including single-family, condos, and PUDs.

To qualify, you must have one of the following designations:

• MD
• DO
• DPM
• DDS
• DMD

4. First Horizon Bank

• BBB Score: A+
• The JD Power Score: N/A

First Horizon Bank has been around since 1864, helping communities throughout Connecticut grow. They have unique banking products and loan programs, including the physician loan program that helps doctors qualify for mortgage financing when they don’t qualify for conventional loans.

First Horizon’s doctor loan program offers loans up to $2.5 million with a 10% down payment. However, they have lower and no down payment options for lower loan amounts.

First Horizon’s guidelines are a little stricter than other lenders on this list, but that’s not bad. They ensure you can afford the loan and aren’t getting in over your head. In addition, you must have a First Horizon Bank checking or savings account to qualify for a mortgage.

To qualify with First Horizon Bank, you must have one of the following designations:

• MD
• DO
• DDS
• DMD

However, unlike most lenders on this list, First Horizon offers their program to doctors beyond the first ten years of their careers.

5. Citizens Bank

• BBB Score: A+
• The JD Power Score: 818

Citizens Bank is one of the country’s top banks, aiming to help all customers reach their financial goals.

Citizen’s Bank physician loan program is open to doctors within the first ten years of their career, but the program is only open to doctors and dentists, not any other medical professionals.

Citizens Bank has strict underwriting guidelines, and they limit their loan amounts to $1 million with a down payment. This differs from many other lenders but ensures you don’t get over your head in debt.

Doctors can choose from a fixed or adjustable-rate loan, and self-employed doctors are eligible. The best part is if you are self-employed, you can close the loan without a two-year income history to qualify, and even if you work for someone but haven’t started yet, your employment contract allows you to close before you start working.

To qualify, you must have one of the following designations:

• MD
• DO
• DDS
• DMD

6. Huntington Bank

• BBB Score: A+
• The JD Power Score: 821

Huntington Bank is a top lending institution in Connecticut providing physician mortgage loans. Huntington Bank offers purchase and refinance loans on the doctor loan program and allows no down payment on loans up to $1 million. If you need to borrow more, you’ll need a 5% down payment on $1.25 million and 10% on up to $2 million.

Huntington Bank allows doctors to choose between a fixed and adjustable-rate loan, but you can only use the loan on your primary residence, not investment properties or vacation homes.

Huntington Bank has a strict requirement for cash reserves to ensure you can afford the loan, but they don’t charge PMI, and you can close the loan with an employment contract if your job starts within 90 days.

To qualify for the physician loan with Huntington Bank, you must have one of the following designations:

• MD
• DO
• DMD
• DVM
• DDS

7. Truist Financial

• BBB Score: A+
• The JD Power Score: N/A

Truist Financial isn’t as well known as the other banks on this list, but they offer an attractive physician loan program in Connecticut. Truist is the result of the merger of SunTrust and BB&T in 2019, so it has reputable backing.

Doctors can borrow up to $1 million with no down payment or put 5% down on up to $1.5 million and 10% on up to $2 million. Truist offers its physician loan program to doctors for the first 15 years of their careers. However, if you’ve been in the business for over ten years, you must put down 10% on the house.

Like many lenders, you can only use the doctor loan program on your primary residence, and Truist Financial has friendly guidelines regarding student loan debt.

8. US Bank

• BBB Score: B+
• The JD Power Score: 807

US Bank is a bank most people are familiar with because they are well known throughout Connecticut. US Bank offers an attractive doctor loan program, but only doctors may apply; they don’t include dentists in the program.

US Bank requires that all borrowers have a down payment of 5% to 15%, depending on the loan amount, and they allow loans of up to $2 million.

US Bank underwriters won’t exclude your student debts from your DTI, they’ll use your income-based repayment plan monthly payment or 2% of the loan balance if your loans are still deferred.

You must have one of the following designations to get a loan with US Bank:

• MD
• DO

9. Evolve Bank & Trust

Evolve Bank & Trust is known for its special banking programs for entrepreneurs and professionals, such as doctors. Their doctor loan program is open to all new doctors, including fellows and residents.

You can buy a single-family or multi-family property; however, the qualifying factors get stricter with multi-unit properties, such as a higher credit score or a larger down payment. Evolve stands out because they’ll lend a doctor’s loan on up to 4 units; most lenders restrict it to a single unit, sometimes two.

You may borrow up to $1 million with no down payment or up to $2 million with 5% to 15% down on the home.

Evolve Bank also opens its program to a larger number of designations, including the following:

• MD
• OD
• DDS
• DMD
• Veterinarians
• Pharmacists
• Nurse practitioners
• Clinical nurse specialists

How Physician Mortgage Loans Work in Connecticut

Physician loans are mortgages to buy a property, usually a primary residence. Every lender has different guidelines, but you can generally borrow 100% of the sales price even if you have a lot of student loan debt.

The key is to have great credit and proof of income from an internship, residency, fellowship, or your newly established practice.

Many lenders allow physician loans for those with an offer letter but haven’t started working yet.

A physician mortgage is like any other mortgage loan, but it’s only for physicians and certain other medical professionals. It’s a program geared toward medical professionals just out of med school who want to settle down but might not have a 20% down payment or a low debt-to-income ratio yet.

Pros and Cons

Before borrowing a doctor loan in Connecticut, it’s important to understand the pros and cons since buying a home is an exceptional investment.

Pros

• No Down Payment: You may be able to borrow a doctor loan with no money down, with a loan as high as $1 million. If you need more, you may be eligible with as little as 5% to 10% down on the home. This starkly contrasts conventional or jumbo loans that require 20%+ down on a home.
• Forgiving Debt-To-Income Ratios: Conventional loans include the full student loan payment in your debt-to-income ratio. This is why many doctors can’t afford mortgage financing because the average med school graduate debt is over $200,000. Physician loans either exclude student loan debt from the debt-to-income ratio or have more forgiving ways to handle it, allowing doctors to get approved.
• No PMI: Most loans require Private Mortgage Insurance when you put down less than 20% on a home, but doctor’s loans don’t. So you can put nothing down on a $1 million loan and not pay PMI. This could save you thousands of dollars over the life of the loan.

Cons

• You May Borrow Too Much: With relaxed DTI guidelines, and the ability to borrow with no money down, it’s easy to borrow more than you can afford. Even if the monthly payment seems affordable, a mortgage lasts 15 to 30 years. If you buy too soon or too much, it could make it hard to get ahead early in your career.
• Limited Property Options: Most lenders only allow doctor loans on primary residences, not investment or vacation homes. In addition, some lenders limit the type of property you can purchase with a physician loan. The most common property type is a single-family home, but some work on PUDs or condos, and only a few allow multi-unit properties.
• Higher Interest Rates: Most borrowers care about the interest rate, and physician loan interest rates are usually higher than other loans. There isn’t a government agency backing them up. Instead, lenders create the product and guidelines and keep the loan on their books, so they often charge higher interest rates to make up for the risk.
• Tax Advantages: Doctors usually have high salaries, which means a high tax liability. So finding ways to minimize your tax liability is important, and owning real estate can be a great way. If you borrow money to buy a primary residence and itemize your tax deductions, you may write off mortgage interest and the real estate taxes you pay on the property up to the IRS limit.

Additional Factors to Consider About Connecticut Physicians Loans

Before applying for a physician loan in Connecticut, consider your plans. While getting a loan with no money down and buying your dream home seems exciting, you must ensure you’re ready.

Here’s what to consider.

• Is this where you want to settle? If you’re in your residency or fellowship, you might not know where you want to settle yet. Since buying a home is so expensive and time-consuming, you should wait until you’re ready to plant roots. But, on the other hand, buying a home too soon could be an expensive mistake.
• Is your income secure? If you haven’t settled into the right job yet, you might bounce around for a little bit. However, don’t take on a mortgage until you’re ready to handle it, especially a doctor’s loan with high payments.
• Can you handle an adjustable-rate loan? Some lenders only offer adjustable-rate loans for physician loans. Unfortunately, this means your rate will adjust annually, which can be hard when managing your cash flow. If you aren’t comfortable with an adjusting rate, shop around for a lender offering fixed-rate loans.

Who Connecticut Physicians Loans Are Good For

Connecticut physician loans have many benefits and are good for certain people. Here’s who.

Physicians Lacking a Down Payment

If you’re ready to plant roots but don’t have money for a down payment, a physician loan can help. You don’t have to give up your liquid assets and invest them in your home, but you can still buy your dream home.

It’s like having the best of all worlds. You have your emergency fund or money for other goals but can buy a house and make payments toward building equity in it.

Physicians With a High DTI Ratio

Don’t feel bad if you have a high DTI. Doctors often do because of their large amount of student debt. In addition, doctor loans in Connecticut are more forgiving regarding DTIs, making it easier for doctors to secure financing.

Physicians Looking To Refinance a Current Loan

If you have a loan on your home but want better rates or terms, you may refinance with a physician loan. Likewise, if your credit improved or you have other compensating factors, you may secure better terms on a new loan.

Physicians Early in Their Career

Early in your career, it’s hard to prove you’re established, but physician loans make it easy. You can even close a loan 90 days before starting your new job if you have an employment contract.

Alternatives to Connecticut Physicians Loans

If a large physician loan concerns you, other options exist.

Conventional Loan

A conventional loan is the most popular loan option. You must have a high credit score and a low debt-to-income ratio to qualify.

This is why it’s hard for many doctors to qualify, especially if they have a lot of student debt. Conventional loans have limits of $726,200, except in high-cost areas, and require as much as 20% down. If you get approved for a lower down payment, you’ll pay Private Mortgage Insurance until you pay the balance below 80% of its value.

The largest difference between conventional and physician loans is that conventional loans include the full student loan repayment amount, and physician loans exclude them.

Physician Loan vs. Conventional Loan

It’s important to understand how a physician and conventional loan differ because they have different guidelines.

Conventional loans are for anyone; they aren’t just for doctors. Like physician loans, you must have a good credit score; however, conventional lenders include your student loan debt in your debt-to-income ratio.

This is why it’s harder for new doctors to qualify for conventional financing. Conventional loans allow low down payments, sometimes as low as 3%, but you’ll pay Private Mortgage Insurance until you owe less than 20% of the home’s sales price. This can add thousands of dollars to the cost of the loan.

Physician loans don’t require down payments (some lenders) and never require Private Mortgage Insurance. Doctor loans in Connecticut also have much higher loan limits. Conventional loans are limited to the conforming loan guidelines of $726,200 in most areas.

Physician loans, however, allow loans up to $1 to $2 million depending on the lender.

80/20 and 80/10/10 Loan

You may consider a piggyback loan if you want conventional financing without the PMI. These loans are 80% first mortgages (conventional loans) with either a 20% second mortgage, which is unusual, or a 10% second mortgage and a 10% down payment from you.

The difference with this option is the lack of PMI you must pay. Also, since you borrow 80% of the sales price, you don’t pay mortgage insurance on the loan.

You can get the second mortgage from the same or different lender, depending on who has the best terms.

FHA Loan

FHA loans are an alternative, but only for doctors looking for lower loan amounts. FHA loans are good for people with low credit scores or high debt ratios that don’t qualify for a physician or conventional loan.

FHA loans require a 3.5% down payment, and borrowers pay mortgage insurance for the entire term. This is a downside of FHA loans, but the relaxed guidelines make it a good option.

VA Loan

If you served in the military, you may be entitled to a 100% loan with no loan limit. As long as you can prove you can afford the loan, the VA will back it if you have entitlement.

VA loans have relaxed guidelines, too; this means you don’t need perfect credit or a low DTI.

However, you must prove you have enough cash flow to cover the loan and have money left for the daily cost of living.

VA loans don’t charge mortgage insurance, but you will pay a funding fee of 2% to 3% of the loan if you choose this option.

Frequently Asked Questions

Still have questions? Check out these frequently asked questions from medical professionals like you.

Is there a limit to the number of physician loans a physician can take out?

You can borrow as many physician loans as you need, but you can usually only have one at a time. Also, since most doctor loans are for primary residences, you can only have one primary residence, which means one loan.

Are doctors more likely to get a better mortgage rate?

Doctors aren’t at an advantage to get a better mortgage rate than anyone else. In fact, if you borrow a doctor loan, you’ll likely have a higher interest rate than conventional borrowers.

Can you refinance a physician loan later?

You are free to refinance your physician loan later. They don’t have prepayment penalties, so you can pay them off with your money or a new loan and not pay anything extra.

Who can receive a physician loan?

Physician loans are obviously for doctors, but many lenders open them up to dentists, chiropractors, nurses, veterinarians, and other medical professionals.

What qualifications are needed to receive a physician loan?

To get a physician loan, you need great credit and a low DTI. You must also prove you have the income to make the payments, and some lenders require that you have cash reserves in a liquid account to cover the payments if necessary.

Do you need a minimum credit score to qualify for a physician loan?

Each lender has different credit score requirements, but you’ll need a 700+ credit score on average.

How big of a loan should I get with a physician mortgage loan?

Many lenders offer large physician loans, but that doesn’t mean you should borrow that much. Only borrow what you’re comfortable repaying and what you can afford. You’ll have a mortgage for the next 15 to 30 years, so consider your future before borrowing too much.

How long do student loans take to pay off as a physician?

The average med student takes 20 to 25 years to pay off student loans, but with an income-based repayment plan or loan forgiveness program, you may pay them off sooner.

Are physician loans a good or bad idea?

Physician loans, like any loans, are good in the right situation. They allow you to borrow money to buy a home, and as long as you don’t borrow more than you can afford, they can be a good idea.