QUICK ANSWER

The five most common mistakes doctors make when buying their first home are: (1) waiting too long to start the process, (2) overestimating what they can afford, (3) not understanding physician loan benefits, (4) making large financial changes during mortgage approval, and (5) skipping pre-approval. Avoid these mistakes by working with a lender experienced in physician mortgages, getting pre-approved early, budgeting conservatively, and maintaining financial stability throughout the process.

INTRODUCTION

The Physician Home Buying Paradox

You've mastered complex medical procedures, navigated years of rigorous training, and earned the credentials to practice medicine—but buying your first home feels overwhelming and confusing.

This isn't surprising. Medical school doesn't teach personal finance, residency doesn't leave time for real estate research, and most mortgage brokers don't understand the unique financial profile of physicians: high earning potential paired with six-figure student debt.

The result? Many doctors make costly mistakes during their first home purchase—mistakes that can cost tens of thousands of dollars or delay homeownership by years.

This guide walks through the five most common mistakes physicians make when buying their first home, and shows you exactly how to avoid them.

MISTAKE #1: WAITING TOO LONG TO START THE HOME BUYING PROCESS

The Problem: "I'll Buy When My Loans Are Paid Off"

Many physicians delay homeownership, believing they must:

• Pay off student loans first

• Save 20% down payment

• Reach attending-level income for several years

• Build perfect credit

While these goals are admirable, waiting can cost you in multiple ways:

Lost Equity:

Rent payments build your landlord's equity—not yours. Every year you delay is a year of missed home appreciation and mortgage principal reduction.

Example:

5 years of rent at $2,500/month = $150,000 paid with zero equity

5 years of homeownership = $150,000 paid + ~$50,000-$75,000 equity (depending on market)

Market Appreciation:

Home prices typically appreciate 3-5% annually. Waiting 5 years could mean the $400,000 home you want today costs $500,000+ tomorrow.

Interest Rate Changes:

Locking in today's rates protects you from future increases. Waiting for "perfect timing" often means paying more later.

The Solution: Start Early with Physician Loans

Physician loans allow you to buy now—even with student debt and minimal down payment. You don't need to wait until loans are paid off.

Timeline Recommendation:

• 12-18 months before residency ends: Start researching lenders and pre-qualification

• 6 months before: Secure pre-approval with employment contract

• 60-90 days before attending position starts: Close on your home

This timeline positions you to start your attending job with housing secured—avoiding rushed decisions or temporary rentals.

MISTAKE #2: OVERESTIMATING WHAT YOU CAN AFFORD

The Problem: "My Contract Is $300K, So I Can Afford a $900K House"

Your first attending contract feels life-changing after years of resident-level income. It's tempting to maximize your buying power and purchase the largest home your lender approves.

But lenders qualify you for the maximum you could theoretically afford—not what you should comfortably spend.

The Hidden Costs of Overbuying:

• Property taxes (often 1-2% of home value annually)

• Homeowners insurance ($1,000-$3,000+ annually)

• HOA fees (if applicable)

• Maintenance and repairs (budget 1-2% of home value annually)

• Furnishing and landscaping

• Utility costs

Example:

$800,000 home purchase

Property taxes: ~$12,000/year ($1,000/month)

Insurance: ~$2,400/year ($200/month)

Maintenance: ~$8,000/year ($666/month)

Total non-mortgage housing costs: ~$1,866/month

Your $4,500/month mortgage suddenly costs $6,366/month total.

The Solution: The 28/36 Rule

Financial experts recommend:

• Housing costs should not exceed 28% of gross monthly income

• Total debt (housing + student loans + car + credit cards) should not exceed 36% of gross monthly income

Example:

$250,000 annual salary = $20,833 gross monthly income

28% max housing = $5,833/month

This supports a $650,000-$700,000 home (depending on rates, taxes, insurance)

Even if your lender approves you for $900,000, buying at $650,000-$700,000 preserves cash flow for:

• Student loan payments

• Retirement savings

• Emergency fund

• Lifestyle expenses

Real-World Impact:

Dr. Lisa, 33, Anesthesiologist

Contract salary: $320,000/year

Student loans: $280,000

Approved for: $950,000 home

Purchased: $675,000 home

"I'm so glad I didn't max out my budget. The extra cash flow lets me pay down loans aggressively and still enjoy life. My colleagues who bought bigger houses feel stretched every month."

For more early-career focus read How to Qualify as a Resident

MISTAKE #3: NOT UNDERSTANDING PHYSICIAN LOAN BENEFITS

The Problem: "My Broker Said I Don't Qualify Because of My Student Loans"

Many general mortgage brokers don't understand physician loans. They run your application through conventional underwriting, see your student debt, and tell you to wait until loans are paid down.

Meanwhile, physician-loan-specialized lenders would approve you immediately using favorable student loan treatment and contract-based income.

What You're Missing:

Physician Loan Benefits:

• 0-5% down payment (no 20% savings required)

• No PMI (save $200-$400/month)

• Student loans deferred or excluded from DTI

• Contract-based approval (residents/fellows qualify before starting attending job)

• Higher loan limits ($1M-$2M+)

The Solution: Work with a Physician-Loan Specialist

Not all lenders offer physician loans, and not all mortgage brokers understand them.

Questions to Ask Your Lender:

• Do you offer physician loans?

• How do you calculate DTI with deferred student loans?

• Can I qualify based on my employment contract (if you're a resident/fellow)?

• What is your down payment minimum?

• Do you charge PMI with less than 20% down?

If your broker doesn't confidently answer these questions, find a specialist.

Amy Parsons and Road to Home Solutions work with a network of physician-loan-specialized lenders nationwide to provide you access to programs designed for medical professionals.

For more detailed information about lenders read Top Lenders Offering Physician Loans

MISTAKE #4: MAKING LARGE FINANCIAL CHANGES DURING MORTGAGE APPROVAL

The Problem: "I Financed a Car While My Mortgage Was Processing"

Mortgage underwriting is sensitive. Lenders verify your financial profile multiple times—including right before closing. Any significant changes can delay or derail your approval.

Common Mistakes:

• Opening new credit cards

• Financing a car, furniture, or appliances

• Making large cash deposits or withdrawals

• Changing jobs (unless transitioning to your contracted attending position)

• Co-signing a loan for family or friends

• Taking on new debt of any kind

Real-World Example:

Dr. James, 34, Cardiologist

Week 1: Approved for $700,000 mortgage

Week 3: Financed $60,000 car (excited about new job and income)

Week 5: Mortgage denied—new car payment increased DTI beyond approval threshold

James had to:

• Pay off the car loan entirely

• Reapply for the mortgage

• Delay closing by 60 days

• Nearly lose his dream home (seller threatened to walk)

The Solution: Financial "Radio Silence" During Mortgage Process

From the day you apply for pre-approval until the day you close:

✅ Do:

• Continue making all payments on time

• Keep your job (or transition to your contracted position)

• Save additional cash for closing costs

• Respond quickly to lender document requests

❌ Don't:

• Open new credit accounts

• Finance any purchases (cars, furniture, appliances)

• Make large cash deposits without documentation

• Change employers unexpectedly

• Co-sign loans

• Move money between accounts unnecessarily

If you must make a financial change, contact your loan officer first to understand the impact.

MISTAKE #5: SKIPPING PRE-APPROVAL (OR CONFUSING IT WITH PRE-QUALIFICATION)

The Problem: "I'll Get Pre-Approved After I Find a House I Like"

Many first-time buyers start house hunting before securing pre-approval. They fall in love with a property, make an offer, then discover they don't qualify or can't afford it.

This wastes time, creates emotional disappointment, and frustrates sellers who dismiss your offers as unserious.

Pre-Qualification vs. Pre-Approval:

Pre-Qualification:

• Quick estimate based on self-reported information

• No documentation required

• No credit check

• Not verified by underwriting

• Weak bargaining power

Pre-Approval:

• Full documentation submitted and verified

• Credit report pulled and reviewed

• Underwriter reviews your financial profile

• Official letter stating exact approval amount

• Strong bargaining power

Why Pre-Approval Matters:

Seller Confidence:

Pre-approved buyers are serious and ready to close. Sellers prioritize these offers—especially in competitive markets.

Accurate Budget:

Pre-approval tells you exactly what you can afford, preventing wasted time touring homes outside your price range.

Faster Closing:

With documentation already submitted, pre-approved buyers close faster—giving you leverage in negotiations.

Protects Your Time:

You'll only tour homes that match your financing, saving weeks of frustration.

The Solution: Get Pre-Approved Before House Hunting

Timeline:

1. Gather documentation (medical credentials, employment contract, financial documents)

2. Submit pre-approval application to physician-loan specialist

3. Receive pre-approval letter within 1-3 business days

4. Begin house hunting with confidence

Pre-approval is typically valid for 60-90 days. If you're not ready to buy immediately, get pre-approved 30-60 days before you plan to tour homes.

[BONUS] MISTAKE #6: NOT WORKING WITH A PHYSICIAN LOAN SPECIALIST

The Mistake:

Many doctors apply directly to a single bank without comparing multiple physician loan programs or understanding all their options. This can cost thousands of dollars and result in less favorable terms.

Why This Happens:

- Doctors assume all physician loan programs are the same

- They go with their existing bank for convenience

- They don't realize brokers can access multiple wholesale programs

- They think working with a broker costs more (it doesn't)

The Impact:

- May get higher interest rates (retail vs wholesale pricing)

- Miss out on better programs at other lenders

- Don't benefit from expert guidance on physician-specific issues

- Potentially leave money on the table

The Solution:

Work with a mortgage broker who specializes in physician loans and has access to multiple wholesale programs. This approach:

✓ Costs you nothing (broker is paid by the lender)

✓ Gives you access to multiple programs simultaneously

✓ Provides expert guidance on physician-specific loan features

✓ Often results in better rates (wholesale vs retail pricing)

✓ Saves time by shopping multiple lenders at once

Road to Home Solutions specializes in physician, dentist, and veterinarian loans through LoanFactory's wholesale network. We compare multiple programs to find your best option—whether you're in California or anywhere else in the U.S.

Questions to Ask When Choosing a Loan Officer:

- "How many physician loans do you originate annually?"

- "Do you have access to multiple physician loan programs?"

- "Can you compare rates across different lenders?"

- "What's your experience with [my specific situation: resident, self-employed, etc.]?"

- "Do you work with physicians, dentists, and veterinarians regularly?"

Contact Road to Home Solutions and get started!

HOW TO AVOID ALL FIVE DOCTOR HOME BUYING MISTAKES: YOUR ACTION PLAN

Step 1: Start Early (12-18 Months Before Your Target Purchase)

Research lenders, understand physician loans, and begin budgeting.

Step 2: Work with a Physician-Loan Specialist

Contact Amy Parsons or another lender experienced in medical professional financing.

Step 3: Get Pre-Approved (Not Just Pre-Qualified)

Submit full documentation and receive an official pre-approval letter.

Step 4: Budget Conservatively

Use the 28/36 rule—not the maximum your lender approves.

Step 5: Maintain Financial Stability

No new debt, no large purchases, no job changes during the mortgage process.

Step 6: Tour Homes That Match Your Financing

Work with a real estate agent (ideally dual-licensed) who understands physician loans.

Step 7: Close and Celebrate

You've avoided the common mistakes and secured your first home as a physician!

CONCLUSION

Buying your first home as a doctor doesn't have to be stressful or confusing. By avoiding these five mistakes—waiting too long, overestimating your budget, not understanding physician loans, making financial changes during approval, and skipping pre-approval—you'll navigate the process smoothly and secure a home that fits your life and financial goals.

Key Takeaways:

• Start the process early (12-18 months before residency ends)

• Budget conservatively (28% of gross income max)

• Work with a physician-loan specialist

• Get pre-approved before house hunting

• Maintain financial stability during mortgage processing

CONTACT ROAD TO HOME SOLUTIONS

Amy Parsons

Dual-Licensed Mortgage Loan Officer & Real Estate Broker

Phone: (800) 591-9489

Email: amy@roadtohomesolutions.com

Web: www.roadtohomesolutions.com

Loan Officer: LoanFactory, NMLS #693001

Real Estate Broker: Lionheart Pride, CalDRE #01489819

Amy Parsons specializes in physician loans through LoanFactory's wholesale network, giving you access to multiple lender programs for comparison. California borrowers: Amy handles your loan directly from application to closing. Out-of-state borrowers: Amy works with licensed LoanFactory agents in your state to provide the same specialized service and program access nationwide.

RELATED RESOURCES

• Physician Loans: Your Complete Guide to Doctor Mortgages

• How to Qualify for a Physician Loan as a Medical Resident

• Physician Loans vs Conventional Loans: Which Is Right for You?

• Top Lenders Offering Physician Loans • Can Dentists and Veterinarians Qualify for Doctor Loans?

Equal Housing Opportunity

NMLS #693001 • CalDRE #01489819

Road to Home Solutions provides mortgage and real estate services nationwide.

Licensing and roles are clearly identified for each transaction.

Written by Amy Parsons, Dual-Licensed Mortgage Loan Officer (LoanFactory, NMLS #693001) and Real Estate Broker (Lionheart Pride, CalDRE #01489819).