Buying a home as a new doctor can be stressful. Since doctors have such high debt when leaving medical school, it can be difficult to find mortgage financing, but physician mortgage loans in New Mexico can help.
Physician mortgage loans have relaxed guidelines, including no to low down payment requirements, making it much easier to secure financing with attractive terms. If you’re a new doctor in New Mexico, check out the top 7 physician mortgage loans available.
7 Best New Mexico Physician Home Loan Lenders
Here are the top physician loans in New Mexico and a quick rundown of how they work:
Discover The Best Lenders in New Mexico Answer just a few questions about your career, where you're buying, and how much you want to borrow. Our service will then show you the exact programs you're eligible for from vetted physician loan specialists who will guide you through every step of the process – obligation-free!
Discover The Best Lenders in New Mexico
Answer just a few questions about your career, where you're buying, and how much you want to borrow. Our service will then show you the exact programs you're eligible for from vetted physician loan specialists who will guide you through every step of the process – obligation-free!
1. BMO Bank
- BBB Grade: A+
- JD Power Score: 805
BMO Bank is popular nationwide, offering a reputable physician loan program in New Mexico.
The program is open to new doctors as well as residents and fellows. You can use the program until you’ve been a doctor for ten years. But, if you still need the program’s flexibility, you can use it after being a doctor for ten years, but you’ll need a 10% down payment.
BMO offers three financing options in New Mexico:
- 100% financing up to $1 million
- 95% financing for $1 – $1.5 million
- 90% financing for $1.5 – $2 million
You can also use the loan program on any property type with 1 to 2 units, including townhomes and condos.
If you have an active employment letter, you can close the loan up to 90 days before starting your position, and they never charge PMI.
The BMO Bank program is open to the following medical professionals:
2. Citizens Bank
- BBB Grade: A+
- JD Power Score: 818
Citizens Bank offers a great physician loan program in New Mexico, but their underwriting guidelines are stricter than others. While this might seem frustrating, it prevents doctors from getting in over their heads in debt when they’ve just started their careers.
The program is open to doctors and dentists in the first ten years of their careers, and the maximum loan amount is $1 million. All doctors must make a down payment, but it’s less than what jumbo lenders would require.
Citizens Bank offers fixed and adjustable-rate loans, and if you own your own practice, you may still qualify even if you recently opened your practice. You can also close your loan up to 90 days before your employment with a practice starts if you have a signed employment contract.
The Citizens Bank program is open to the following medical professionals:
3. Evolve Bank & Trust
- BBB Grade: A+
- JD Power Score: N/A
Evolve Bank & Trust caters to professionals, like doctors, and offers a great physician loan
program open to new doctors, fellows, and residents.
Evolve Bank has loan limits up to $1 million with no down payment required or higher loan amounts up to $2 million with 5% to 15% down on the home. You can purchase single-unit or multi-unit properties with the loan program; however, you must have great credit and a higher down payment if you purchase a multi-unit property.
Evolve has a fast application process, and their program is open to the following medical professionals:
- Nurse practitioners
- Clinical nurse specialists
4. Flagstar Bank
- BBB Grade: A-
- JD Power Score: 781
Flagstar Bank offers a doctor loan program in New Mexico with a wider reach than just doctors. However, there’s a catch.
You can only use the loan to purchase your first home or refinance an existing home. If you already own a home, you cannot use the program for another purchase.
The Flagstar Bank Professional Loan Program is for primary residences only. You must have at least a 720 credit score to avoid a down payment on loans up to $1 million, and if you borrow over $1 million, you’ll need a low down payment.
The maximum loan amount is $1.5 million, and the only loan term available is an adjustable-rate loan, which has pros and cons. However, unlike many other lenders, Flagstar allows interested-party contributions.
The Flagstar Professional Loan Program is open to the following professionals:
- Doctors (including specialists)
5. Huntington Bank
- BBB Grade: A+
- JD Power Score: 821
Doctors in New Mexico can use Huntington Bank to fulfill their dreams of owning a home. The doctor loan program is available for up to $2 million, with no down payment needed on loans up to $1 million, 5% down on $1.25 million, and 10% on $2 million.
Huntington Bank only allows the program on primary residences, and the loan is available as a fixed or adjustable-rate loan. However, one strict requirement they have is the need for cash reserves. This doesn’t mean you must put the money down on the home, but you must have it available.
Like most lenders, you can close your loan up to 90 days before you start your job if you have an active employment contract.
The Huntington Bank physician loan program is open to the following professionals:
- BBB Grade: A+
- JD Power Score: 809
KeyBank offers a great physician mortgage program in New Mexico that works with many properties, including single-family, townhomes, and condos.
The loan program includes the option of a fixed or adjustable-rate loan, and they never charge PMI.
KeyBank offers much higher loan amounts than most banks, with loan limits as high as $3.5 million, but the average loan is $1 to $2 million. KeyBank also allows doctors to use the program on primary residences, vacation homes, and investment homes.
The KeyBank physician loan program is open to the following professionals:
7. US Bank
- BBB Grade: B+
- JD Power Score: 807
US Bank offers a physician loan program in the truest sense. However, it’s only open to doctors, not dentists.
Unlike most lenders on this list, they don’t have a no down payment option. Instead, you must put down 5% to 15%, depending on the amount you borrow. The maximum anyone can borrow is $2 million.
US Bank includes your student debt in your debt-to-income ratio, but they’ll use the income-based repayment amount or 2% of your loan balance if your student loans are still deferred.
So they make it a little harder to get approved, but this just prevents you from borrowing more then you can afford.
The US Bank physician loan program is open to the following professionals:
What Is a Physician Loan
A physician loan is a mortgage loan for doctors in New Mexico who might not qualify for conventional financing.
When doctors graduate from medical school, they leave with a median debt load of $200,000 to $215,000. As you can imagine, a debt of that size results in high loan payments and a high debt-to-income ratio.
Conventional loans typically make it impossible for doctors to secure mortgage financing until they pay the loans down and have a large down payment.
On the other hand, physician loans in New Mexico exclude student debt from the DTI or minimize it, making it easier to qualify. In addition, they offer much higher loan amounts of up $1 to $3 million with no or low down payments.
Physician loans aren’t for everyone because there is a risk in borrowing that much with no down payment, but in the right situation, they can be helpful.
How Physician Mortgage Loans Work in Maryland
Physician loans in Maryland are a flexible program for doctors just out of med school or early in their careers who might not qualify for a conventional loan.
Physician loans allow Maryland doctors to secure financing for a primary residence and sometimes a secondary home with relaxed guidelines, including low down payment requirements.
Because doctors are in such high demand in Maryland, it’s a great place for new doctors to start their practices, and having the chance to secure attractive financing makes it easy to set up roots.
To get a physician loan in Maryland, you must complete an application and provide the necessary documents, including:
- Proof of income or an employment contract
- Proof of your degree
- Approval to pull your credit
- Bank statements to prove you have the money for a down payment or cash reserves
- Documentation regarding your student loans and how you’re repaying them
Who Qualifies for a Physician Loan?
Every lender has different guidelines regarding who qualifies for a physician loan. Typically, they are open to doctors and dentists, but several lenders open them to other medical professionals, including nurses, chiropractors, and veterinarians.
Anyone that qualifies must prove they have the proper education or degree and are working in the field they studied.
Many lenders allow doctors and other medical professionals to close their loans up to 90 days before they start working if they have an executed employment contract.
Pros and Cons
Borrowing money to buy a home is great, but physician loans in New Mexico have pros and cons you should consider before choosing one.
- No Money Down: You can usually get a physician loan with no money down up to $1 million or a low down payment if you need to borrow more. This is great for doctors who spent their capital paying off student loans or are new to their careers. Even if a loan doesn’t require a down payment, it’s important to consider making one, so you build equity in the home immediately rather than taking many years.
- No PMI: Most loans with less than a 20% down payment require Private Mortgage Insurance. This can add hundreds of dollars to your monthly payment and thousands of dollars over the life of the loan. Physician loans don’t require PMI with any lender. This means you can put nothing down on a home and still not pay PMI.
- Relaxed DTI Guidelines: New doctors often have very high debt-to-income ratios because of the high cost of med school and the low salaries earned before starting their careers. Physician loans in New Mexico often exclude student debt from the DTI or use lower payment amounts to make it easier for doctors to qualify for a loan.
- Close Before Starting Work: Many lenders accept an employment contract to close your loan instead of proof of income. This means if you start within three months, you can often close the loan first and get settled in your new home before starting your career.
- High-Interest Rates: Lenders charge interest on all mortgage loans, and the higher the risk you pose, the higher the interest rate they charge. Since doctor loans don’t require a down payment and have relaxed underwriting guidelines with high loan amounts, they are risky for lenders. To compensate for the risk, many lenders charge higher interest rates. Fortunately, the rates are usually competitive but higher nonetheless.
- Primary Residence Only: Many physician loan programs are only for primary residences. This can be frustrating if you’re looking to buy a vacation home or want to start a passive income stream with an investment property.
- It’s Easy to Borrow More Than You Can Afford: Because physician loans have relaxed guidelines and high loan amounts, it’s easy to get in over your head without realizing it. Closing a loan before you start your job and seeing what you can afford can be challenging, especially if you have an adjustable-rate loan.
Frequently Asked Questions
Check out our answers to these commonly asked questions.
Do doctors get better mortgage rates?
Doctors don’t get better mortgage rates than other borrowers. In fact, they usually pay higher rates to make up for the risk they pose.
Can you refinance a physician loan?
Physician loans don’t typically have a prepayment penalty, so you can pay them off early or refinance them. You can even refinance a physician loan with another one.
How many times can you use a physician loan?
You can use a physician loan as many times as you qualify. Typically, you can only have one at a time, but if you’re within the first ten years of your career, you may qualify for another one.
Moving to a Different State?
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Should You Get a Physician Loan in New Mexico?
Before taking out a physician loan in New Mexico, make sure you can afford the payment.
Securing financing with no down payment sounds like a great opportunity, and it can be, but it can also put you in over your head in debt.
Look for a loan with the most attractive terms, and make sure you’re ready to settle down with a sizeable loan before taking advantage of the physician loans in New Mexico.