In this First Horizon physician mortgage loan review, we'll show you how to apply for a physician loan to make qualifying easier.
7 min read
Last updated November 28, 2023
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7.5
Expert Take
The First Horizon physician loan is open to a select number of medical degrees and doesn't require a down payment on loans up to $750,000, which is low compared to other programs but keeps you from overspending.
Pros
- Allows loans up to $2.5 million
- 100% financing up to $750,000
- May exclude student loan debt deferred for 12 months or more
Cons
- Only a small list of doctors are eligible
- You must have a First Horizon checking account to qualify
The First Horizon physician loan is for doctors with specific degrees and good credit who want to buy a house that doesn’t qualify for traditional financing.
This First Horizon physician mortgage loan review will help you understand everything about the loan program to decide if it’s right for you.
About First Horizon
First Horizon Bank opened in 1864 and now has 418 locations in 15 states and $85.1 billion in assets. They are deeply committed to the clients and communities, helping people in all professions reach their financial goals.
- BBB Score: A+
- Parent company: First Horizon National Corporation
- Phone number: 800-382-5465
- Services offered: Personal, small business, and commercial banking
Here are some quick facts about the First Horizon physician loan.
- Financing options: No down payment on loans up to $750,000, but lends up to $2.5 million
- Qualifying degrees: MD, DO, OMS, and DPM
- Private Mortgage Insurance: Not required
- Maximum loan amount: $2.5 million
First Horizon Physician Loan: Qualifications
The First Horizon physician loan has unique qualifying factors, including the following.
- Down payment: 0% to 10%, depending on loan amount
- Position: Residents, fellows, and new doctors
- Banking requirements: Must have a First Horizon checking account
Discover The Best Lenders
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
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!
Loan Type Property Type How will this property be used?
How to Apply
In this First Horizon physician mortgage loan review, we’ll show you how to apply for a physician loan to make qualifying easier.
1. Get Pre-Qualified
It’s always a good idea to get pre-qualified first. This isn’t a formal application and isn’t a promise to lend. Instead, it gives you an idea of how much you can afford to borrow by discussing your income, assets, credit, and debts with a loan officer.
They will compare your qualifying factors with the loan program’s requirements to determine if you meet them. This will help you understand how much you can borrow based on your current circumstances and what you might need to change to improve your chances.
2. Gather the Necessary Documents
Before looking at homes and applying for a mortgage, gathering the documentation First Horizon needs is a good idea. Like most lenders, they need proof you make adequate income, have assets, and have the proper degree to qualify for the program.
The necessary documents include:
- Income documentation: If you’re already practicing, you must provide paystubs and W-2s to prove your income. However, First Horizon also allows residents with an active employment contract with a future start date to qualify. In this case, you’d provide your employment contract instead of paystubs.
- Savings: If you must make a down payment, you must prove you have the funds by providing your last two months of bank and investment statements. You must also prove you have enough money to cover the closing costs.
- Degree: First Horizon restricts its loan program to MDs, OMs, OMSs, and DPMs. You must prove you have the proper degree to qualify for the program.
- Employment information: An underwriter must confirm your employment or impending employment, so providing your employment information helps speed the process up.
3. Get Pre-Approved
When you’re ready to look at homes, apply for pre-approval. This is a formal application for a First Horizon physician loan. You’ll complete a loan application and provide the underwriter with the necessary documentation.
The underwriter will review your application and documentation and determine if you qualify for the loan. This is a formal approval, and you’ll receive a pre-approval letter stating how much you can borrow, the potential rate, and any conditions you must clear to close the loan.
The pre-approval letter shows sellers you are qualified to purchase a home, which is especially important when looking at homes worth $750,000 or more.
This isn’t final approval, though. You must clear the conditions before First Horizon will fund the loan. These conditions include a home appraisal and title search to ensure the seller has the right to transfer the property legally.
4. Satisfy the Conditions and Find a Home
After receiving a pre-approval, you can start looking at homes and making an offer when ready. During this time, clear the conditions the underwriter placed on the loan so that First Horizon can fund the loan when the closing date comes.
After you find a home and sign a sales contract, give it to the underwriter immediately. They will order an appraisal and title search and look for any other conditions you must clear before they can close the loan.
5. Close the Loan
The final step is to close the loan after you’ve cleared all the conditions and the home is deemed satisfactory. You’ll sign the mortgage, note, and other loan closing documents at the closing. This makes you responsible for the new loan, with your first payment beginning within 45 days in most cases.
The First Horizon physician loan is a great option, but there are alternatives.
BMO Bank
BMO Bank requires down payments of 5% to 10%, depending on how much you borrow. However, as we found in this First Horizon physician loan review, they have flexible underwriting guidelines. And their program is open to more medical professionals than First Horizon.
Huntington Bank
Huntington Bank allows no down payments on loans up to $1 million, which is more than First Horizon allows, and has loan amounts up to $2 million. They don’t require PMI, and their program is open to MDs, DVMs, DOs, DDSs, and DMDs. Huntington Bank also requires proof of reserves to qualify for the loan.
Fulton Bank
Fulton Bank allows no down payment on loans up to $1.5 million and up to 10% down payments on higher loan amounts. They lend up to $3 million and allow sellers to help with closing costs up to 6% of the sales price. Fulton Bank excludes student loans that are deferred for at least 12 months, and you can close with an employment contract before you start working.
Fifth Third Bank
Fifth Third Bank has a physician loan program for MDs, DOs, DMDs, DDSs, and DPMs. They require credit scores over 700, and you can borrow 100% of the loan amount up to $750,000. They offer up to $1 million loans to new doctors and up to $2 million for established doctors on fixed or adjustable-rate loans.
Pros and Cons
A First Horizon physician loan mortgage review should include pros and cons to help you determine if it’s right for you. Here’s what you must know.
Pros
- Large loan amounts up to $2.5 million
- No down payment on up to $750,000
Cons
- Small list of eligible degrees
- Must have a First Horizon checking account to be eligible
Frequently Asked Questions
The First Horizon physician mortgage is a good option for many doctors. Here are some questions people have about them.
First Horizon physician mortgage rates are usually competitive but rarely lower than other loans. Physician loans are risky for lenders because they are for higher loan amounts than conventional guidelines allow and often don’t require a down payment. Lenders must compensate for this with a higher interest rate.
How much money can I borrow with a First Horizon physician loan?
Each borrower is eligible for a different loan amount. It depends on your qualifying factors, including income, assets, and credit score. The more money you make and have saved, and the better your credit, the more you can borrow.
Who is eligible for the First Horizon physician loan?
First Horizon has a small list of eligible degrees, which is a downside. They offer their loan program to doctors with the following degrees: MD, DO, OMS, and DPM.
Do First Horizon physician loans have benefits?
First Horizon physician loans are good for doctors with good income but a large amount of student debt. You may qualify with no money down or a small down payment on loans over $750,000.
First Horizon may exclude your deferred student loan debt from your debt-to-income ratio, making qualifying easier. Most doctors can purchase a house earlier with a physician loan because of the lack of down payment required. Some can even purchase while still in residency or fellowship.
Does First Horizon require a specific credit score for a physician loan?
First Horizon doesn’t state what credit score they require for a physician loan; however, any credit score over 700 is best. The better your credit, the easier it is to get approved for a larger loan amount.
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