Dentist Mortgage Loan in Florida: All You Need to Know

Dentists dedicate countless hours to perfecting their craft, ensuring their patients’ oral health. After days filled with intricate procedures, they deserve a tranquil home to return to. However, the journey towards homeownership or refinancing can be difficult for many dental professionals.

If you’re looking for a dentist mortgage in Florida, we can help. 

Our mission is to simplify the mortgage loan process, making it more accessible and achievable for dentists who devote their lives to enhancing the dental health of our communities.

What is a DMD mortgage?

A DMD mortgage is a bespoke solution crafted to cater to the specific needs of dentists.  Understanding the distinct financial circumstances prevalent among dentists, these loans are structured to accommodate their unique career paths, potential for future income growth, and the substantial student loans incurred during their education.

Key attractive features of these specialized loans include:

• Low down payments for purchases (0% down payment is available)
• High loan-to-value (LTV) and high maximum loan amounts
• Competitive interest rates
• Flexible options to show income
• No private mortgage insurance (PMI) required
• Flexible guidelines regarding student loan debt

In essence, a dentist mortgage is designed to make homeownership more attainable and financially viable for those who have dedicated their careers to the health of others. It’s a way of acknowledging their contribution to society and supporting them in achieving their personal and financial goals.

Who qualifies for dentist mortgage loans?

For dentists who have earned either a DMD (Doctor of Medicine in Dentistry) or DDS (Doctor of Dental Surgery) degree, we provide specialized mortgage solutions tailored to their professional profile.  Dental professionals with other degrees such as OMS (Oral and Maxillofacial Surgeon) might also be eligible, and those who are currently in their fellowship or residency period may also qualify.

Acknowledging the specific financial circumstances and career paths of dentists, our loan programs are designed to address their particular needs. This includes considerations for the significant investment in their education and the potential for stable, long-term income.

(When it comes to securing a mortgage for other healthcare workers, we understand that the medical field is vast and diverse. That’s why our loan programs are designed to encompass a wide array of medical professionals.  We also have physician mortgage loans in Florida and be sure to browse our general page on home loans for healthcare workers.)

Key features of dentist mortgage loans

A mortgage for dentists has very attractive features. These programs offer a range of benefits, from flexible underwriting to special terms, all aimed at making the dream of homeownership or refinancing more achievable and financially manageable for dentists.  

All loan purposes allowed

A key feature of a dentist loan mortgage is the versatility of loan purposes.  The following loan purposes are supported:

• Purchase
• Delayed financing
• Rate-and-term refinance
• Cash-out refinance (there may be limits on the amount of cashback allowed at the table, e.g., up to $250,000)
• Construction-to-permanent financing

100% loan-to-value available (0% down payment)

Perhaps the most attractive feature of dentist mortgages is the potential for 100% loan-to-value (LTV).  For a purchase, this means 0% down payment. For a rate-and-term refinance, this means you maximize your chances of paying your current loan off in full, as long as the appraised value of your property is high enough.  

To take advantage of 100% LTV, lenders typically require healthy credit scores and DTIs as well as properties in sound conditions.  For example, the LTV will typically be reduced by 5 to 10% for the following situations:

• Non-warrantable condominiums, the LTV will be reduced
• Cash-out refinances (rate-and-term refinances, by contrast, can go up to 100% LTV)
• The loan amount reaches a certain threshold (e.g., $1M and above) 

High loan amounts

Understanding that dentists often seek homes that match their hard-earned status and lifestyle, financing for dentists includes jumbo loans, which exceed the conforming loan limits set by federal guidelines.

The maximum loan amount under these programs can be as high as $1M or $2.5M.

For example, some lenders offer these attractive options that come with both low down payments and high loan amounts:

• 0% down payment for loan amounts up to $1.5M
• 5% down payment for loan amounts up to $2.0M
• 10% down payment for loan amounts up to $2.5M

Flexible options to show income

One of the standout features of the best dentist mortgage loans is flexible options for demonstrating qualifying income. We understand that income sources can vary widely within the dental profession, and our approach is designed to accommodate these differences.

The following sources of income are acceptable for loan qualification:

• W2 Income:  You fit this category if you’re employed and salaried by an established dental practice or a similar institution.  There is no seasoning requirement, meaning that recent changes in employment or salary level will not be a hindrance.
• Contract Income:  Income earned through contracts, but not receiving W2 wages, may also be eligible. 
• Future Income:  If you have a signed employment contract with an established dental practice, and your employment is set to begin within 90 days of the loan closing, this income can be considered. For applicants in this category, having sufficient reserves to cover expenses in the period before the start date is necessary.
• Self-Employed Income: For self-employed dentists, lenders will consider one year of established income, as verified by tax returns and year-to-date profit-and-loss statements. This acknowledges the unique financial situations of those who run their own practices.

This flexible approach to income verification ensures that a wider range of dentists can access the home loans they need, reflecting the diverse ways in which dentists earn their income.

Dentist debt-to-income ratio

To qualify for a dentist mortgage loan, the maximum debt-to-income (DTI) ratio is usually around 45%.  However, if the borrower’s credit score is in the 600s instead of the 700s, the maximum DTI drops to around 36%.  Under certain circumstances, student loan debt can be excluded from the DTI calculation.

Home loans for dentists have special guidelines regarding debt that reflect the unique financial situations often faced in this field.  Here’s how lenders assess the dentist debt-to-income ratio:

• Higher Maximum DTI Allowed:  Dentists may have higher debt levels due to their educational and career paths. Therefore, the maximum DTI allowed is typically around 45% (depending on credit score), which is a slight increase from the standard 43% imposed by more traditional lenders. This higher threshold provides additional flexibility for those with higher debt levels, making it easier for them to qualify for a loan.
• Consideration for Student Loans in Deferment: Understanding the significant investment in education that dentists often make, these programs offer specific considerations for student loans. If a student loan is in deferment for at least 12 months at the note date, it may be excluded from the DTI calculation. This exclusion is contingent on the lender’s reasonable determination that the borrower’s income is likely to increase by the end of the deferment period and will be sufficient for timely repayment of the student loan debt once it resumes.

These guidelines are designed to accommodate the financial realities of many dentists, especially those early in their careers or with substantial educational debt.

Dentist loan mortgage rates – do dentists qualify for lower mortgage rates?

Home loans for dentists often feature favorable dentist mortgage loan rates that are competitive in the market, providing an additional financial advantage to those in the dental profession. These competitive rates are a recognition of the stability and reliability inherent in dental careers.

Additionally, there’s an opportunity for borrowers to receive a slight reduction in their mortgage rate if they opt for auto-deposit from a bank account opened with the lender, provided the lender is a depository institution. This incentive not only offers further financial benefits but also encourages a comprehensive banking relationship between the dentist and the lender.

No reserves requirements

Another notable advantage of dental home loans is that the lender may waive the reserves requirement, in recognition of the dependable and secure nature of jobs within this sector.  For example, some lenders do not require reserves for loan amounts up to $2M.

Post-closing cash reserves are funds that a borrower is required to have available after closing the purchase or refinance loan. These reserves are meant to ensure that the borrower can continue making mortgage payments in case of unexpected financial challenges. The amount is usually specified as a certain number of months’ worth of mortgage payments, typically ranging from 12 to 24 months.

Variety of payment terms available

Under dentist mortgage programs, borrowers can choose a structure that fits their unique circumstances:

• Fixed-rate mortgage:  For those seeking stability and predictability in their mortgage payments, there are fixed-rate loans (10-year, 15-year, or 30-year may be available). These options provide a fully amortizing payment structure, meaning borrowers will pay off the loan completely over the specified term with consistent monthly payments. This is ideal for dentists who prefer a clear, fixed payment schedule.
• ARM: Adjustable-rate mortgages (ARMs) tied to the Secured Overnight Financing Rate (SOFR) are also available. These include 5/6, 7/6, and 10/6 SOFR ARM options.  These ARMs offer lower initial interest rates, which adjust after the initial fixed period (5, 7, or 10 years) based on the SOFR index. This can be a suitable choice for those who anticipate changes in their financial situation or plan to refinance in the future.

Private mortgage insurance not required

Another advantageous feature of dentist mortgage programs is the exemption from private mortgage insurance (PMI).

PMI is a type of mortgage insurance typically required for conventional loans when the down payment is less than 20% of the home’s purchase price. This insurance is designed to protect the lender, not the borrower, if the borrower stops making payments on the loan.

For dental professionals taking advantage of these specialized loan programs, the PMI requirement is waived.  Not having to pay the mortgage insurance premiums can lead to significant cost savings over the life of the loan.  

Benefits of dentist mortgages

As discussed above, several key features make mortgage loans for dentists very beneficial.  Here is a summary of the Top 9 benefits:

1. All loan purposes allowed (purchase, delayed financing, rate-and-term refinance, cash-out refinance, and even construction-to-permanent financing)
2. LTV as high as 100%, down payment option as low as 0%.
3. High loan amounts up to $2.5 million.
4. Flexible options to show income (including future income)
5. Special guidelines regarding debt such as excluding student loan debt from the DTI calculation under certain circumstances
6. Favorable interest rates
7. No post-closing reserves requirements in some cases
8. Fixed-rate mortgages and ARMs are both available 
9. No private mortgage insurance (PMI) requirement.

The above benefits collectively create a uniquely advantageous financial solution tailored to the specific needs and circumstances of dental professionals.

Drawbacks of a dentist mortgage loan

While dentist home loans offer numerous benefits, it’s important to be aware of certain drawbacks that might affect some borrowers. Being informed about these potential limitations can help you make a more balanced decision.

Limited occupancy types

Typically, dental loan mortgage programs are limited to properties that are owner-occupied.  Further, while some lenders may allow second homes, most only allow primary residence occupancy.

Therefore, purchasing or refinancing an investment property is not available under these mortgages.

Limited property types

Similarly, the property types are generally limited to single-family residences, condominiums and PUDs, and typically are not available for other property types such as 2-4 units.

However, regarding condos, it’s important to note that most lenders will allow non-warrantable condos (i.e., fall outside Fannie Mae and Freddie Mac guidelines) subject to certain restrictions such as reduction in LTV.

Limited citizenship eligibility

Dentist mortgages are typically not available to foreign nationals, only U.S. citizens and permanent resident aliens.  However, some lenders might allow non-permanent residents with a valid work visa, such as H-1B and O-1 visa types.

Stricter DTI requirements for lower credit scores

As discussed above, while the maximum DTI allowed might be as high as 45%, it is important to note that the threshold decreases as the borrower’s credit score decreases.  For example, some lenders may drop their maximum DTI to as low as 36% if the borrower’s credit score is around 670 or 680.  It can be difficult for some borrowers to show a DTI of 36% or less.

Some loan pricing options not available

Although fixed-rate and ARMs are generally available, not all dental mortgage lenders offer other pricing variations such as the interest-only payment option.

Types of mortgages for dentists

Many aspects of a home loan for dentists overlap with non-traditional alternative mortgages in general, as set forth below.

Jumbo loans

Jumbo loans are ideal for dental professionals looking to purchase or refinance luxury homes or condos in high-cost areas. Exceeding the conventional loan limits set by federal guidelines, jumbo loans provide higher borrowing amounts, often necessary in markets like Miami, Florida. 

For example, jumbo loans in Florida for 1-unit properties start at $766,551.   Dental home loans are available for that amount up to $2.5 million.  Read more about jumbo loans in Florida.  

Alternative documentation loans

Alternative documentation loans are a boon for self-employed dentists or those with non-traditional income streams.  Under dentist mortgage loan programs, self-employed borrowers have to provide only 1 year of tax returns instead of the 2 years traditionally required.   It is also possible to qualify via future income by showing a signed employment contract with a start date within 90 days of loan closing.

These options offer flexibility for those whose income patterns might not fit the standard mold, making it easier for a wider range of dentists to qualify for financing.

Read more about self-employed loans.

Cash-out refinancing

Cash-out refinancing allows dentists to leverage the equity in their homes for liquidity, especially because some lenders offer up to 90% LTV. This type of refinancing replaces the current mortgage with a new one for a larger amount than owed, providing the borrower with the difference in cash. It’s an excellent way for dentists to access funds for various purposes, such as home improvements, debt consolidation, or other significant expenses.

Read more about cash-out refinance in Florida programs.

Non-warrantable condo loans

Non-warrantable condo loans cater to the unique financing needs for condominiums that don’t meet certain traditional lending criteria set by Fannie Mae and Freddie Mac. These loans are crucial for dentists interested in purchasing or refinancing condos that may be ineligible under standard loan programs, offering a pathway to homeownership in diverse property types.

Read more about non-warrantable condo loans.  

Construction-to-permanent financing

A construction-to-permanent loan is a specialized loan option for dentists looking to build their homes. This two-phase financing solution starts with a construction loan for the building period, transitioning into a permanent mortgage once construction is complete. It offers the convenience of a single application and closing process for both phases. This type of loan is perfect for dentists who want to tailor their living space to their specific preferences and needs, providing a seamless and efficient way to finance the construction and long-term mortgage of their dream home.

Read more about home construction loans.  

First-time home loans for dentists

Finally, there are first-time homebuyers programs for dentists.  These are specifically tailored to assist those in the dental field who are navigating the home-buying process for the first time. These programs often feature lower down payments, favorable interest rates, and educational resources to guide new buyers through the complexities of purchasing their first home, recognizing the challenges and demands of healthcare careers.

Why DAK Mortgage for a dentist home loan in Florida

When it comes to finding the best home loan for a dentist, choosing the right lender is crucial. Specializing in home loans for medical professionals, we understand the unique financial needs of healthcare workers in Florida.

With our track record of closing loans and our extensive network of reputable lenders, we are well-positioned to match you with the best financing options available. 

Key takeaways on home loans for dentists

In this comprehensive guide, we’ve explored various aspects of home loans for a dentist. Below is a summary of the key points that highlight the special features and considerations of these mortgage programs:

1. Attractive Loan Features:  The most beneficial hallmarks of these programs include up to 100% LTV with 0% down payment, high loan amounts up to $2.5 million, flexible income verification methods, and competitive interest rates.
2. Understanding the Limitations:  It is important to be aware of certain restrictions such as occupancy and property type limitations, citizenship requirements, and stricter DTI requirements for lower credit scores.
3. Tailored to Specific Situations:  Dentist home loans are available for special situations, whether you need a jumbo loan amount, an alternative documentation loan, cash-out refinancing, a non-warrantable condo loan, or a construction loan.

Bottom line, there are many options for dental professionals, ensuring that they have access to the right financial resources to meet their unique home buying or refinancing needs.