Loans for Doctors: How They Can Aid in Building Your Private Practice

Many physicians dream of someday owning their own practice. For some, it’s about autonomy and flexibility. For some, it’s about providing a specific type of patient care. For others, it’s about earning more money.

According to the Medscape Physician Compensation Report 2023, self-employed physicians earn an average of $30,000 more per year than employed physicians. But starting your own practice is no easy feat. It takes time, dedication, and money.

The good news is that there are loans available specifically to doctors that make it easier to build and grow a private practice. Here’s a look at how loans for doctors can help you expand your existing practice or get a new one off the ground.

A Physician Mortgage Lets You Keep More Money in Your Pocket

The doctor mortgage (aka “doctor loan”) is a unique opportunity eligible only to certain types of healthcare providers. This mortgage option is typically only offered to doctors who have been practicing for less than ten years, though some lenders extend loans to physicians who have been in practice for up to 15 years.

Entering the wholesale real estate market can further accelerate wealth building, offering a strategic path to acquire properties at below-market prices.

What makes the doctor mortgage so attractive is that it allows you a chance to purchase a home with a zero or low down payment and no PMI.

Traditional mortgages require a 20% down payment or you must make private mortgage insurance payments until your loan to value ratio (LTV) is 80%. Depending on the value of your home, this can be hundreds or thousands of dollars per month.

With a doctor loan that requires no down payment and no PMI penalties, you can keep more money in your pocket — money that you can use to start your own practice.

Check out this article from LeverageRX to learn more about the five best physician mortgage lenders across the U.S. 

A Physician Mortgage Helps You Build Wealth Over Time

Investing in real estate is one of the smartest decisions you can make. Renting doesn’t allow you to profit anything on the back end when you move, you’ll simply be paying off someone else’s mortgage rather than your own.

A physician mortgage offers young doctors riddled with student loan debt a chance to purchase property and build equity in that home over time. Whether you opt to sell the property several years down the road or live there for decades, the equity will be yours to put in your pocket. You can either put profit towards your next home or invest in your own private practice.

Buy a Multi-Family Dwelling to Reduce Your Own Monthly Mortgage Payments

Most lenders only offer doctor mortgages for primary residences, not for second homes, commercial properties, or investment properties. Some lenders limit the property type to single-family dwellings, but others allow you to buy multi-family units, as long as you live in one of the units.

Owning a multi-family home is a great way to reduce your monthly mortgage expenses. For example, in a two-unit dwelling where you occupy half the property, you can use the rent you collect from tenants to pay the other half.

The less you spend on monthly mortgage payments, the more you can save and put toward funding and financing your own practice.

A Physician Mortgage Can Help Build Your Credit

Every loan you take and pay on time, every month, builds your credit. And if you need to take out a business loan or a mortgage for commercial real estate to build your own practice, you’ll need good credit.

A physician mortgage can be a stepping stone in helping you boost your credit score. Without a good or excellent credit score, you can expect to pay higher interest rates on every subsequent loan you take, including the medical practice loan you might need to start your own business.

Need Additional Financing? Apply for a Medical Practice Loan

It can cost tens of thousands, or even hundreds of thousands, of dollars to open your own medical practice. How much you’ll need depends on a variety of factors, including:

  • The type of healthcare services you provide
  • The equipment needed to provide top-quality care
  • Where you plan to open your business
  • How much staff you’ll need to run your practice

Many doctors find it difficult to save enough money to start their own practice. That’s where a medical practice loan comes into play.

A medical practice loan can provide you with funds and working capital to:

  • Purchase commercial real estate
  • Pay for day-to-day business expenses
  • Purchases inventory and equipment
  • Pay salary and staff
  • Advertise and market your business to acquire new patients

You can obtain a medical practice loan through a traditional bank, credit union, and a variety of other types of lenders.

In Conclusion

Loan lenders love borrowers who have good credit and high income-earning potential, and doctors fit that bill. So take advantage of loan options, like the doctor mortgage loan, that are unique to you.

The more money you have saved, the better your credit, and the less debt you have, the easier it will be to open your own practice and make it a success.  


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