If you’re a doctor in the United States who is interested in borrowing a large sum of money to purchase a residence, you may find the Bank of America Doctor Loan program a lot more feasible than other financing solutions.
The program is designed to make it easier for doctors of various fields to have their own homes, with loans often exceeding the $1 million mark, which is far more than the ones offered by other mortgage lenders.
This guide will show you how to qualify for the doctor’s loan, the required documents, and the steps you should follow to acquire such a loan.
Key Takeaways
- The Bank of America can provide medical practice loans of up to $2 million for doctors of various specialties.
- The loan terms dictate that the doctor can use the funds only to purchase a primary residence.
- Student debt is excluded from the bank’s DTI calculations, making it easier for doctors to acquire the loan.
Table of Contents
What Is the Bank of America?
The Bank of America is a multinational investment bank and financial services company founded in 1904 in San Francisco.
Currently, its headquarters are located in Charlotte, NC, and it has more than 4,300 branches and 17,000 ATMs across 50 states.
Among its services is the Doctor Loan program, which is designed specifically for medical professionals to help them achieve home ownership.
There’s also a Customizable Loan program with a loan of up to $5 million.
However, that program is designed for starting, expanding, or acquiring a new practice.
Who Is Eligible for the Bank of America’s Medical Professional Mortgage Program?
The Bank of America’s Physician Loan program caters to various medical professionals.
However, there are specific criteria necessary to qualify for the program:
Licensed and Practicing Doctor
You must be a licensed medical professional, and it’s not restricted to medical doctors. A medical doctor (MD or DO), dentist (DDS or DMD), veterinarian (DVM), optometrist (OD), podiatrist (DPM), or doctor of chiropractic medicine (DC)—all can apply for a doctor loan.
Medical Residents and Fellows
Currently employed residents and fellows in accredited programs are also eligible and welcome to apply.
How Do You Qualify for the Bank of America’s Doctor Loan?
The two conditions we mentioned earlier make you eligible for the loan, but you also need to tick a few other boxes to qualify:
1. You Must Be Receiving a Salary
The program is primarily for salaried positions. You must have a contract with an employer that states you are receiving a steady monthly income.
The loan is also available for soon-to-be-employed doctors if they have the paperwork to prove they’re going to start a salaried job within 90 days of applying for a physician mortgage loan.
2. You Have a Good Credit Score
Having a good credit score is always a necessity when getting a loan. There’s no official minimum credit score advertised, but it’s recommended to have a score of at least 700 for better rates.
That can be especially helpful if you’re applying for a larger sum.
3. You Must Have a Bank Account
Having an established relationship with the BoA is required to get a loan.
There’s no minimum period of having a bank account (whether a checking or savings account) before you can apply for a loan; you can open the account at the same time as your application.
4. There’s a Minimum Down Payment
Before you can receive the loan, you must own and provide the paperwork proving that you have at least 3% (up to 15%) of the down payment.
The percentage changes based on the amount of loan you’re applying for (the more money, the higher the percentage).
5. Your DTI Ratio Should Be Favorable
The BoA doctor loan program generally has a more lenient debt-to-income ratio compared to traditional mortgages.
The BoA doesn’t disclose a specific DTI, but you should aim for a DTI of 43% or below.
A 43% DTI means that 43% of your gross monthly income (before taxes) goes toward paying your monthly debt obligations.
In other words, clearing your debts or increasing your monthly salary is the key to a better DTI.
Note: The BoA will exclude student loan debt from your total debt, so you don’t have to add that to the equation.
How to Apply for the Bank of America Doctor Loan
Here’s a detailed step-by-step guide on the process (assuming you’re already qualified):
Step 1: Gather the Necessary Documents
Below is the essential paperwork you’ll need to apply for the loan.
Depending on your situation, you may need extra documents:
- Proof of income: Paystubs, W-2s, and tax returns for the past 2-3 years.
- Employment verification: You’ll be required a letter from your employer or residency program director.
- Bank statements: You’ll need to provide bank statements for the past few months (up to a year) to show your reserves and financial stability.
- Educational documents: You’ll need copies of your medical degree or diploma.
- Asset documentation (optional) : If you have investment or retirement account statements, providing them can improve your chances of acquiring a loan.
Step 2: Pre-Qualify for the Loan
Pre-qualification isn’t mandatory, but this step will help you estimate your DTI and the loan amount you might be eligible for.
This will help you see a clearer picture before proceeding with a lengthy application and ending up with a potentially unfavorable outcome.
Contact the BoA mortgage specialist or visit the official website, then provide basic information about your income, desired loan amount, and property details.
Note: This is a soft credit check and won’t affect your credit score.
Step 3: Schedule a Consultation
The BoA offers consultation services with doctor loan specialists who understand the unique needs of medical professionals.
You may request a specialist during the prequalification step or directly contact the physician mortgage loan department.
During the consultation, the officer will discuss your loan requirements, financial situation, and eligibility for the Doctor Loan program.
The officer will also provide specific details that you may not find online. If you have any questions, this initial meeting is the perfect place to present them.
Note: Have your documentation with you during this consultation, as you may be satisfied enough with the details to apply during the meeting itself.
Step 4: Submit a Formal Application
Once you are satisfied with the details of the consultation, you may submit a formal application.
You’ll need all the required paperwork, plus any extra information requested by the specialist.
You’ll also need to provide detailed information about your employment, income, assets, liabilities, and other relevant financial details.
You may need additional copies of your professional licenses, employment contracts, pay stubs, and tax returns, so it’s better to have those with you as well.
Step 5: The Approval
Typically, you only need to wait for the approval after step #4, but in some cases, the bank may request additional information or documentation to support your loan application.
Once everything is ready, the bank will contact you and provide a loan disclosure document outlining the terms and conditions.
This document will contain the interest rate, repayment schedule, and associated fees or charges.
Taking your time while reviewing the document is paramount to avoid missing anything.
You should also clear any potential misunderstandings with your loan officer.
Step 6: Accepting the Loan
After reviewing your disclosure document, you may accept (or refuse) the terms provided.
In case of acceptance, you’ll need to sign some legal documents, and the bank will disburse the loan funds according to the agreed-upon terms.
Note: These steps may vary depending on your circumstances.
Frequently Asked Questions
What Is the Maximum Loan I Can Get From the Bank of America Physician Program?
As a doctor, you may be eligible for loans up to $2 million. However, expect a significant 15% down payment with that, which is $300,000 in this case.
The BoA allows adjustable and fixed-rate mortgages with a monthly mortgage payment for up to 30 years.
What Is the Down Payment Amount When Getting a Doctor Loan From the Bank of America?
The down payment depends on the sum you seek to borrow.
The minimum downpayment is 3% for loans up to $850,000 (up to $25,550) and 10% if your loan reaches the $1.5 million mark (up to 150,000).
If you go for the maximum loan of $2 million, your down payment will be 15%.
What Purposes Am I Allowed To Use the Doctor Loan For?
The BoA Doctor Loans program is specifically designed to finance the purchase of a primary residence.
The terms and conditions state that the loan may not be used for luxurious or auto purchases.
Manage Your Financials With Physician’s Thrive
The BoA Loan program can be a great aid for doctors, but it opens up another set of financial concerns that doctors in the U.S. need to worry about.
For starters, you’ll need to get the best job contract so you can start financially strong.
You’ll also need to repay your student loan as quickly as possible without hurting your finances.
There are also concerns about retirement plans, starting a private practice, acquiring various types of insurance (including private mortgage insurance), investing, and a lot more.
With Physician’s Thrive, we’ll act as your coach, guide you through all these problems, and help you minimize financial mistakes in your profession.
Contact us to get started, and check out our 2024 Physician Compensation Report to get an understanding of how much you can make.
