Physician Mortgage Refinance: Where to Find One and What to Know

Medical doctors and dentists can take advantage of a physician mortgage refinance loan program. It allows qualifying borrowers to secure a lower interest rate and potentially tap into their home’s equity for renovations or other financial priorities.

But does a physician mortgage refinance make sense for you? Here’s what you need to know about refinancing your physician loan and where to find lenders who offer this option.

What’s a physician mortgage refinance and when should I consider one?

A physician mortgage refinance loan can replace your current home mortgage with a new loan that carries better terms. Depending on your refinancing goals, a physician mortgage refinance could possibly lower your interest rate, reduce your monthly loan payments or allow you to access your home’s equity for other major expenses.

Many homeowners choose to refinance in order to lower their lower interest rate. But this isn’t the only reason to consider refinancing your mortgage.

A physician mortgage refinance can potentially:

1. Lower your interest rate. If your credit score has improved or if you bought a home when interest rates were higher, you might be able to secure a lower interest rate. This decision alone could save you tens of thousands of dollars in interest over the life of the loan.
2. Reduce your monthly mortgage payment. This can be done by lowering your interest rate or by extending your repayment term (e.g., refinancing from a 15-year term to a 30-year term).
3. Accelerate your loan payoff. Refinancing to a shorter loan term lets you pay off your principal faster and reduce the overall amount of interest you pay over the life of the loan. But it’ll likely result in a higher monthly payment.
4. Tap into your home’s equity. A cash-out refinance replaces your existing mortgage with a larger loan balance than you currently owe. The difference is given to the homeowner as tax-free cash that can be used for other substantial expenses (e.g., home improvements, debt consolidation, etc.).

Depending on your situation, you might choose to pursue a physician mortgage refinance for any combination of these reasons.

Things to consider before refinancing a physician mortgage

Before moving forward with a physician mortgage refinance, you need to weigh the pros and cons of your situation and identify your goals for refinancing. Consider the following:

• How much will it cost to refinance? Just like when you originally bought your home, you’ll incur closing costs, which might include an appraisal fee, origination fee, discount points and other refinance fees. Therefore, you’ll need to determine what your break-even point is to make refinancing financially worth it.
• Will you use the equity in your home for a cash-out refinance? Refinancing helps you access relatively low rates for home improvements compared to other forms of lending (e.g., personal loans, credit cards, etc.). But it also reduces your equity and costs you significantly more over the life of the loan. Plus, your home will be used as collateral for whatever you’ll be paying for with the cash-out amount.
• What loan terms are available? Depending on the lender, you might be limited to an adjustable-rate mortgage (ARM). However, some lenders offer a variety of fixed-rate and variable-rate products to meet your needs.

A physician mortgage refinance needs to fit into your overall financial plan, particularly if you’ll be using a cash-out refinance. It shouldn’t necessarily be used as a quick fix for more serious financial issues. For example, if you’re facing extensive consumer debt, converting unsecured debt to secured debt puts your home on the line if you can’t afford the higher monthly mortgage payments.

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Where to refinance your physician mortgage: Top 9 physician mortgage lenders

Some mortgage lenders only offer options for a rate-and-term refinance for a primary residence, while others offer cash-out refinance options.

Additionally, each lender might only serve borrowers in specific states or have varying cash-out maximums. Here are some lenders to consider for a physician mortgage refinance.

1. First Merchants Bank

• Refinance details: Cashout refinance available for up to 80% of the home’s value.
• States available: IL, IN, MI, OH

Physician mortgage program: First Merchants Bank Review

2. First National Bank

• Refinance details: Cashout refinance available for up to 80% of the home’s value.
• States available: SC, OH, PA, DE, MD, WV, TN, GA, NC, VA, FL
• Contact: Email Josh Feldman

Physician mortgage program: First National Bank Review

3. Flagstar Bank

• Refinance details: Cashout refinance available for physician loan amounts up to $1 million.
• States available: AL, AK, AZ, AR, CA, CO, CT, DE, DC, FL, GA, HI, ID, IL, IN, IA, KS, KY, LA, ME, MD, MA, MI, MN, MS, MO, MT, NE, NV, NH, NJ, NM, NC, ND, NY, OH, OK, OR, PA, RI, SC, SD, TN, TX, UT, VT, VA, WA, WV, WI, WY

Physician mortgage program: Flagstar Bank Review

4. Huntington National Bank

• Refinance details: Cashout refinance available. Maximum cash to the borrower is $250,000.
• States available: AR, CO, CT, DE, FL, GA, IA, ID, IL, IN, KS, KY, MA, MD, ME, MI, MN, MO, MT, NC, ND, NE, NH, NJ, NM, OH, OK, OR, PA, RI, SC, SD, TN, UT, VA, VT, WA, WI, WV, WY

Physician mortgage program: Huntington National Bank Review

5. KeyBank

• Refinance details: Maximum cash to the borrower is $500,000 (for loan amounts up to $1 million).
• States available: IL, MO, MI, OH, IN

Physician mortgage program: KeyBank Review

6. S&T Bank

• Refinance details: Cashout refinance available for up to 80% loan-to-value (LTV). No maximum cash to borrower limit.
• States available:  AL, AK, AZ, AR, CA, CO, CT, DE, DC, FL, GA, HI, ID, IL, IN, IA, KS, KY, LA, ME, MD, MA, MI, MN, MS, MO, MT, NE, NV, NH, NJ, NM, NC, ND, OH, OK, OR, PA, RI, SC, SD, TN, UT, VT, VA, WA, WV, WI, WY

Physician mortgage program: S&T Bank Review

7. TD Bank

• Refinance details: Cashout refinance available for up to 80% LTV. No maximum cash to borrower limit.
• States available: CT, DC, DE, FL, MA, MD, ME, NC, NH, NJ, NY, PA, RI, SC, VA, VT
• Contact: Email Neil Surgenor 

Physician mortgage program: TD Bank Review

8. Truist (formerly SunTrust)

• Refinance details: Cashout refinance available for up to 80% of appraised value. Maximum cash to the borrower is $50,000 (all other proceeds must go to pay down debts).
• States available: AL, AR, CA, CT, DC, DE, FL, GA, IN, KY, MA, MD, MS, NC, NJ, OH, PA, SC, TN, TX, VA, WV
• Contact: Email Matt Albert 

Physician mortgage program: Truist Review

9. UMB Bank

• Refinance details: Cashout refinance available for up to 80% of home’s value.
• States available: CO, AZ, TX, OK, KS, NE, MO
• Contact: Email Andrew Berry.

Physician mortgage program: UMB Bank Review

Next steps for a physician mortgage refinance

If you’re a medical professional and it’s been a while since you bought your home, refinancing your mortgage could result in more favorable loan terms that help lower your monthly mortgage payment or reduce the amount of interest you’ll pay over the life of the loan.

Depending on your financial goals, it can also allow you to use your home’s equity to fund other financial priorities via a cash-out refinance.

Each lender will have its own underwriting criteria and loan limitations, such as the maximum cash amount that borrowers can walk away with. So, it’s best to shop around for mortgage options and compare refinancing interest rates and loan terms.

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