Mortgages tailored specifically to doctors have gotten more popular in recent years, CNBC staffer Helen Zhao reports.
From 2008 to 2017, Bank of America says, the dollar volume of physician mortgages it issued increased ninefold because of greater awareness from consumers. Smaller banks also report increases. Stillwater, Oklahoma-based Bank SNB, owned by Simmons First National, issued $50 million in physician home loans last year and is on track to double that amount this year, said Drew Daniels, a mortgage sales manager who launched the loan program.
Unsurprisingly, doctors’ high salaries and stable job market relative to other professions make them lucrative and low-risk customers for banks that hope to sell them other products down the road, Zhao writes. The average physician salary this year is $299,999, according to Medscape's annual survey of 20,329 doctors across roughly 30 specialities.
"You're a student, emerging physician, hit with all this debt. You have a lot of future upside," said John Cross, divisional sales executive at Bank of America. "If you provide a mortgage solution at the beginning of their career, from there it turns into all kinds of other conversations."
On top of little to no down payment and a more forgiving debt-to-income ratio calculation, physician mortgages don't require private mortgage insurance, which can amount to a few hundred dollars a month.Read More