Best Physician Mortgage Loans in Oklahoma

Oklahoma physicians often have difficulty qualifying for mortgage financing because of the lack of savings or a high debt-to-income ratio.

Physician mortgage loans in Oklahoma can help you buy a home sooner with little to no money down and more flexible underwriting requirements.

Physician loans aren’t right for everyone, though. Here’s what you should know about the loan program and the top lenders to consider if you decide it’s right for you.

7 Best Oklahoma Physician Home Loan Lenders

Here are the top physician mortgage loan lenders in OK:

1. Arvest Bank
2. BMO Bank
3. Bank of America
4. Evolve Bank & Trust
5. First National Bank of Omaha
6. Huntington Bank
7. US Bank

1. Arvest Bank

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

Arvest Bank offers a physician loan for new and established physicians. You can apply as a resident or if you’ve been practicing for years.

Arvest offers 100% financing and, in some cases, allows physicians to roll up to 3% of the home’s sales price in closing costs into the loan, allowing up to a 103% LTV.

Arvest physician loans have flexible underwriting guidelines and don’t charge PMI.

2. BMO Bank

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

BMO Bank offers physician loans nationwide, including in Oklahoma. Their program is open to new physicians, residents, and fellows. If you’re already practicing, you must be within the first ten years of your career to qualify. If you’ve been a doctor for over ten years, you may qualify with a 10% down payment.

BMO offers three financing options in Oklahoma:

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

Physicians can buy a single-family home, townhome, condo, or multi-unit property with a maximum of two units.

Physicians can qualify with an employment letter that starts within 90 days, and no borrower pays PMI.

The program is open to MDs, DOs, DMDs, and DDSs.

3. Bank of America

• The BBB Grade: A+
• The JD Power Score: 894

Bank of America also offers physician loans in Oklahoma. However, to apply, you must have a Bank of America bank account and enough cash reserves to meet their requirements (this varies by the borrower).

Bank of America doesn’t include student debt in your DTI, and you can borrow up to $850,000 with a 3% down payment, up to $1 million with a 5% down payment, up to $1.5 million with a 10% down payment, and up to $2 million with a 15% down payment.

Bank of America doesn’t charge PMI, and you can close up to 90 days before starting a job if you have an employment contract. The program is open to MDs, DOs, DDSs, DMDs, DPMs, and ODs.

4. Evolve Bank & Trust

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

Evolve Bank & Trust offers a physician loan for many medical professionals, not just doctors. The application process is simple, and you can borrow up to $1 million with no money down. If you need a higher loan amount, you’ll need 5% to 15% down and can borrow up to $2 million.

The Evolve Bank physician loan program is available to fellows, residents, and new doctors, and you can use the loan on single or multi-unit properties. However, if you buy a multi-unit property, you’ll need better credit and more money down on the home.

To qualify, you must be an MD, OD, DDS, DMD, veterinarian, pharmacist, nurse practitioner, or clinical nurse specialist.

5. First National Bank of Omaha

• The BBB Grade: A+
• The JD Power Score: 847

First National Bank of Omaha offers physician loans in Oklahoma up to $1.5 million. You don’t need a down payment on loans up to $850,000, but if you need a higher loan amount, you may need a small down payment.

FNBO has flexible underwriting requirements, and they don’t require PMI even with no money down on the home. You must qualify as an MD, DO, DVM, DDS, DMD, NP, PA, or CRNA.

FNBO requires a high minimum credit score of over 700 and offers its physician loan program for purchases and refinances.

6. Huntington Bank

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

Oklahoma doctors can borrow a loan from Huntington Bank to buy a home. The loan program offers up to $2 million, but you’ll need a down payment. Loan amounts up to $ 1 million don’t need a down payment, but you’ll need 5% down on up to $1.25 million and 10% on up to $2 million.

Like a few other banks on this list, Huntington Bank requires proof of cash reserves but offers fixed and adjustable-rate options for their physician loan program. In addition, you can close with an employment contract up to 90 days before employment begins, and the program is open to MDs, DOs, DMDs, DDSs, and DVMs.

7. US Bank

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

US Bank offers a physician loan program in Oklahoma, although, unlike other banks on the list, it’s only for doctors, not dentists.

Depending on your qualifying factors, you’ll need 5% to 15% down on the home and can borrow up to $2 million.

US Bank doesn’t exclude your student debt from your debt ratio; instead, they use your income-based repayment amount or 2% of your loan balance if you haven’t applied for income-based repayment yet.

What Are Physician Mortgage Loans in Oklahoma

Keep in mind that physician loans are only for physicians and, in some cases, other medical professionals. According to the lender’s guidelines, you must have a specific degree and meet other requirements, such as minimum credit scores and maximum debt-to-income ratios.

Most physician mortgage loans in Oklahoma are for primary residences only; however, a few offer mortgage financing on investment or vacation homes.

It’s important to use caution when considering a physician loan because of the ability to borrow much higher loan amounts with fewer restrictions. Ensure you aren’t getting in over your head by borrowing more than you can afford.

How a Physician Mortgage Loan Works in Oklahoma

If you’re a doctor looking for mortgage financing but don’t qualify for a conventional loan, a physician mortgage loan may be a better option.

Doctor’s loans are meant for medical professionals who leave med school with $200,000+ in student debt and have a high debt-to-income ratio.

Because conventional financing requires low debt-to-income ratios, physicians in Oklahoma often don’t qualify, but physician loans offer more flexible guidelines.

Each lender has different requirements, but generally, they exclude student loan repayments from the DTI or use a lower payment amount, such as your income-based repayment. In addition, many physician loans don’t require a down payment, or if they do, it’s much lower than conventional loans require. This is often on high loan amounts, such as $1 to $3 million.

Pros and Cons of Physician Mortgage Loans in Oklahoma

Physician mortgage loans in Oklahoma have many pros and cons, including the following.

Pros

• No Down Payment: Doctors just leaving med school often don’t have much money saved for a down payment but can afford a higher loan payment. Physician loans have lower down payment requirements, including many opportunities for no down payment. If you have the funds to put down, though, it’s always best. You’ll have instant equity in the home and lower the mortgage payment because you’ll borrow less.
• Flexible Underwriting Guidelines: Most physician loans have flexible underwriting guidelines, especially concerning your debt-to-income ratio. Since most doctors leave med school with a lot of debt, it can be difficult to qualify for financing. It can take most doctors 20 to 25 years to pay off their debt, making the prospect of buying a home slim.
• Exclude Student Loand Debt: Doctor mortgage loans, however, often exclude student loan debt from the DTI, or if they include it, they use a lower payment amount to calculate it to ensure doctors can get the financing they need.
• No Private Mortgage Insurance: Most mortgage loans that allow a down payment of less than 20% require PMI (Private Mortgage insurance). PMI can increase your mortgage payment by hundreds of dollars and make it harder to qualify for a loan. Physician loans don’t charge PMI.
• Close Before Starting Your Job: Many lenders allow doctors to close on their loans with an employment contract up to 90 days before starting work. This allows you time to settle into your home before beginning your full-time job as a doctor.

Cons

• Higher APR: Physician loans are risky for lenders because of the lack of down payment and the higher DTI allowed. To make up for the risk, lenders usually charge a higher APR. This means you’ll pay more for the loan over its term and, of course, will have a higher mortgage payment.
• Easy to Get In Over Your Head: Because of doctor loans’ relaxed guidelines, it’s easy to borrow more than you can afford or borrow too soon before you know what you can afford. So it’s important to look at your budget and ensure you’re comfortable with a mortgage payment on a $1 million+ home before taking on a mortgage just because you’re a doctor and qualify.
• Limited Residence Options: If you’re looking to purchase a vacation home or want passive income from an investment home, you may not be able to use physician loan financing. Most lenders only allow a physician loan in Oklahoma on primary residences.

Deciding if a Physician Mortgage Loan Is Right for You

Physician mortgage loans aren’t for everyone, even if you meet the guidelines with your degree and profession.

To decide if it’s right for you, consider your financial situation. A mortgage is a large investment that lasts 15 to 30 years. If you can’t make your payments, you risk a foreclosure which can be detrimental to your credit and finances.

There’s no rush to buy a home, but if you decide you’re ready and just don’t have the cash yet, or don’t have a low enough DTI, then a physician loan may be a good option.

Physicians Who Will Take Out a Physician Mortgage Loan

Every physician has different reasons for taking out a physician mortgage loan, but the most common physicians are as follows.

Physician With No Down Payment at Hand

If you are already established in your practice or have an executed job offer, you might consider a physician loan if you qualify but don’t have money to put down. If you’re ready to settle in the area and want to purchase your ‘forever’ home, a doctor’s loan can help you reach your financial goals.

Physician With Large Student Loan Debt

Other physicians that often use physician loans in Oklahoma are those with a lot of student loan debt, which makes their debt-to-income ratio too high. Conventional lenders require low DTIs of 36% to 43%. That’s nearly impossible for doctors to achieve with their level of student debt and the potential of a new mortgage payment.

Physician loans offer more flexible guidelines regarding student debt, making qualifying for a mortgage loan easier.

What You Need to Qualify for Physician Mortgage Loans

To qualify for a physician mortgage loan, you must prove you can afford the loan, the home is worth enough, and you meet the requirements regarding your profession.

The documents you need may include the following:

• Paystubs, W-2s, or an employment offer – You must prove your income to show you can afford the loan. Many lenders allow physicians to close on loans before they start their job (usually up to 90 days before) with a job offer letter, or you must prove consistent income with your paystubs and W-2s.
• Proof of education – You must prove you have a degree in the required areas for the physician loan. Each lender has different requirements regarding this.
• Proof of down payment funds – If you borrow more than the lender allows for no down payment, you must prove you have the funds in a liquid account for the required down payment.

Frequently Asked Questions

I get a lot of questions about physician loans in Oklahoma because they offer unique financing. So here’s what I get asked.

Are Conventional Loans the Same as Physician Mortgage Loans in Oklahoma?

Conventional loans are different from physician loans because they have stricter requirements.

Conventional loans are from Fannie Mae or Freddie Mac. The largest difference in this loan program from physician loans is how they treat student debt.

Lenders cannot reduce the student loan payment to reduce a doctor’s DTI to qualify. Instead, they must use the full repayment amount and require a down payment of 3% to 5%.

Conventional lenders may only offer loans up to $726,200 in most areas and $1,089,300 in high-cost areas.

Conventional loans have stricter requirements, making it harder for physicians to qualify unless they have great credit and don’t have the average student loan debt most physicians have when they leave med school.

Do Physicians Receive Better Interest Rates on Loans in Oklahoma?

Physicians usually pay higher interest rates than other borrowers because of the riskiness of the physician loan program. Lenders take a high risk by lending $1 million+ to doctors with no money down, so to make up for the risk, they charge higher interest rates.

How Many Times Can Physicians Take Out a Physicians Mortgage Loan?

There isn’t a limit regarding how many times physicians can borrow a physician loan. However, most lenders only allow one physician loan at a time. For example, if you have one on a primary residence and want to buy a vacation home, you may not use physician loan financing.

Can You Refinance a Physician Mortgage Loans in Oklahoma?

Many lenders allow you to refinance a physician mortgage loan. In addition, most doctor loans don’t have prepayment penalties, so it’s easy to refinance and get a better term or rate to save money.

Do Physicians Need a Specific Credit Score to Qualify?

Each lender has different requirements for qualifying for a physician loan in Oklahoma. On average, you need a 700+ credit score, but some lenders have more flexible guidelines.

Are Physician Loans a Good or a Bad Idea?

Physician loans have good and bad sides. The key is to ensure you can comfortably afford the loan and aren’t borrowing it ‘because you can.’

Getting in over your head with a physician loan is easy, so it’s important to budget and determine what you can afford before purchasing. If you aren’t ready to settle down or don’t want a large mortgage payment, it’s better to wait.

Should You Put Money Down on a Physician Mortgage Loan?

Many physician loans don’t require a down payment, but that doesn’t mean you can’t make a down payment. It’s often a good idea to put money down because you’ll have instant home equity and a lower mortgage payment, saving money on interest.

Should You Get a Physician Mortgage Loan in Oklahoma?

Look at your financial situation and the total cost of physician mortgage loans in Oklahoma before borrowing one. Then, if you decide their right, consider one of the top physician loan programs I’ve outlined.

The key is to find a loan with the lowest interest rate and best terms. If you can afford a down payment, consider it, and be sure you don’t borrow more than you can afford.