(Closed) Advice Buying Home While in Graduate Med School

posted 5 years ago in Home
Post # 3
Member
890 posts
Busy bee
  • Wedding: December 2012

I am not sure of the OR area but I bought my house when i was 19 at $85,000 only and in my senior year of college! lol  (not trying to brag :(,  I just wanted to show that school is NOT stopping you! 😀 ).  You just need to find yourself a really good real estate agent and from there they will be able to help detemine what you can and cannot look for!   They will be able to assist you more!  I really wish you the best of luck!! It is a great feeling to get your first home but of course all the not so fun stuff is first! lol 😀

 

Happy hunting!

Post # 4
Member
11760 posts
Sugar Beekeeper
  • Wedding: November 1999

I have no idea what the Portland, Oregon real estate market is like. Where I am on the east coast, a 100k place would be tough to come by in a decent neighborhood. 

That being said, 10k is a 10% downpayment on a 100k house, which is a great downpayment! On your current salary you will definitely be approved for more than that, but make sure you won’t be house poor!  You’re not going to have much time to work to make extra $ I am guessing.  Another aside – as someone who has 80k in student loans (from a master’s degree) and that is only tuition not the extra living expense money, I strongly encourage you to take out as little $ in loans as possible. (The interest rates suck! Mine are at 7 and 8%!)  

Mortgage rates are super low right now, so it’s a great time to buy. Make sure that the house you buy will be able to easily sell or at least rent out after you’re done med school (since I’m guessing you’ll be doing a residency and the location of that may be TBD).  

Good luck!

Post # 5
Member
2282 posts
Buzzing bee
  • Wedding: June 2012

I did this when I moved to Auburn for my PhD – same reason. Just couldn’t stomach pouring rent down a hole for 5 years. I’m really glad I did, because when I sold it I had enough to put a down payment on my perfect house once I got a job.

A few things to remember, though. 

The down payment is important. The more you can put down, the less your payments will be, and the more equity you’ll have in the home after 4 years. I did a business deal with my dad to help me with the down payment – when I sold the house, he got back what he’d put in plus half the profit, so it was a good investment for him as well as for me.

It’s still not so easy to sell a house right now, so don’t count on it being an easy thing to walk away from. Just be prepared for that. 

I was in a fairly crappy neighborhood, but it wasn’t too awful, and while there were some bad neighbors from time to time, they came and went, and didn’t bother me. 

Your maintenance is up to you when you own, so if you suddenly have septic system or roof problems, you could be in for huge, expensive repairs. I was able to borrow from my dad for that, so just make sure you have somewhere you can turn if you need to. I stayed on at AU to teach for 2 years after I finished my degree, so I was in that house 7 years. In that time, I had to replace the main electrical conduit system (which went on the fritz in the middle of finals my first semester), and the hot water heater (that exploded in the middle of the night). I had termites and had to get the house treated and the follow up service for several years. I chose to lay out the money for a fenced-in yard, and I put in central HVAC (when I moved in, it had window air units and a floor furnace). I rebuilt a portion of the deck myself one summer. All these, though, vastly increased the value of the house, and I sold it for twice what I bought it for. Make sure you aren’t budgeting all your money for the mortgage payment and other bills – you’ll need to start out with a good cushion of money from the beginning since the house won’t care if you’ve just moved in when it decides to have a roof leak or wiring problem. 

Grad school is so stressful – money problems are the last thing you need. I think it’s a great idea to buy instead of rent, but only in the right conditions.

Good luck!

(sorry so long!)

 

Post # 6
Member
452 posts
Helper bee
  • Wedding: March 2014

@RawHoneyBee:  I’m in medical school too, so I can relate to your position! I haven’t looked into buying a house and live in Canada, so I can’t comment on specifics (although 10% downpayment in Canada requires increased mortgage insurance).

However, I would put some thought into the fact that after graduating in less than 4 years you’re likely to move to a different city/state for internship/residency. In that time you might not see a great appreciating in the value of your house (of course this will depend on many things) and you do have to take into account increased costs of homeownership as @ProfessorGirl pointed out. With closing costs of purchasing and selling a house, you might not come out much ahead in the end, with the added stress of homeownership for 4 years during a trying time of your life. Just some thoughts!

ETA: in my area, you can’t even get a condo for $100,000 – so that will entirely depend on the real estate market in Portland

Post # 7
Hostess
2557 posts
Sugar bee
  • Wedding: May 2014

@MrsWBS:  this.

 

I have a doctorate and racked up over $100k in student loans (and this was after having 75% of my grad tuition paid for by a grant).  In undergrad, I pocketed the extra loan money to live off of.  I absolutely regret doing this now.  Paying that back SUCKS.  The interest is awful and my payments basically amount to a mortgage.  

 

Good luck with the house buying process though!  Just stick to your budget and work with a real estate agent.  Explain your situation.  They’ll be able to guide you.

Post # 9
Member
1660 posts
Bumble bee
  • Wedding: October 2011

@RawHoneyBee:  I bought a house before starting grad school… I think overall it was the right decision for me, but there were times when maintenance issues cropped up during busy times (e.g., finals, internship interviews) when I regretted the decision and wanted to shoot myself! It was also stressful to have to sell the house before leaving for my internship year. I think for your situation/location, a condo might be best. Mowing, raking, shoveling, etc. takes up time you may not have and a condo would allow you to avoid all that. Also, I think for 100k in Portland you’re going to need something small (1-2 BR). My sister bought a small (<1200 sq ft) house 2 years ago and had to spend 300k to get something in a nice neighborhood that wasn’t a major fixer upper. The rental market in Portland is strong though, so she was able to rent it out for enough to coverage her mortgage and real estate taxes (when her hubby’s job took them to TX). Good luck!

Post # 10
Member
7318 posts
Busy Beekeeper
  • Wedding: October 2011 - Bed & Breakfast

Remember that condo/hoa fees can be raised, and you should factor that into your budget. You need to thoroughy investigate a condo board. How stable is their membership? Are there key positions that are vacant? How frequently do they raise rates? Is the condo board financially solvent? Do they save enough money each month to pay for major repairs (e.g. roof), or would they need to raise rates and wait a while to raise that money (all the while the roof is leaking, rotting the woodwork, growing mold, etc.)? How are neighbor disputes handled? Who has the authority to enforce things? What is the process for getting renovations approved by the board? Are there any renovation restrictions (e.g. no hard surface flooring? hard surface flooring must be covered 80% by rugs? no construction before 9am or after 8pm? etc.) How many units are currently owner-occupied and how many are rental units (this is a neighbor issue and a mortgage issue. If you want a FHA loan, a certain % of units must be owner-occupied)? Where does the plumbing run (in one friend’s condo their neighbor’s plumbing ran through their outside wall, so when the neighbor needed plumbing work done, the contractors were in my friend’s house to do the work. The building was originally constructed as a single home, and when it was converted to condos, lots of weird stuff like this happened.

If it’s an HOA, what do they cover? If you live in an area with snow, what is the deal with snow removal (i.e. do they plow the lot and end up plowing in all of the cars so you can never seem to shovel out? personal experience here)? What are the rules for home and lawn maintenance? How strictly do they enforce them? Do you really want a lovely note on your door that your grass is half an inch too long when you are in the middle of finals? What is the enforcement process? Dispute resolution process? Are there any future development plans (new community pool or whatnot)?

Post # 12
Member
7318 posts
Busy Beekeeper
  • Wedding: October 2011 - Bed & Breakfast

@RawHoneyBee:  So you have been at your current job for a year? Were your previous jobs related to your current job? Like, did you stay in the same line of work, or completely change fields? Also, can you demonstrate through your tax returns that your income has been stable or steadily increasing for several years? Our lenders looked at 3 years worth of tax returns upfront, and said they would ask for more if they had any concerns. fortunately 3 years of returns was enough for us.

While lenders don’t automatically dismiss your application if you’ve only been at your job for a year, they do want to see consistency and stability on your field of choice and income level. If you are uncertain, there’s nothing wrong with making appointments with 2-3 lenders to ask questions. Fact finding is your friend. 🙂

Post # 13
Member
904 posts
Busy bee

I guess I’m the voice of dissent here because I think this is a terrible idea. Homes are not appreciating the way they once were and we’ve not hit the bottom of the market yet. Four years isn’t going to cut it. You’ll be lucky to break even selling it with closing costs and what not. HOA fees routinely go up without notice and there’s nothing you can do about it. Maintenance costs can be a huge pain in the butt plus you’ll be paying all utlities. And, like another poster said, it’s very likely you’ll have to move to get a job or residency after med school. 

I say save your money, put it in a high yield saving account and wait.

Post # 14
Member
10369 posts
Sugar Beekeeper
  • Wedding: September 2010

Have you looked at Redfin.com or Trulia.com to get a feel for what list prices are, and then sold prices in Portland? You can’t buy anything for that price where I grew up in Texas (which is MAD cheap), so i’m doubting $100,000 will get you much in as trendy a place as Portland.

Post # 15
Member
10369 posts
Sugar Beekeeper
  • Wedding: September 2010

@RedAngelDreamer:  Housing markets vary widely across the country. In the Bay Area, things are heating up again and everything is selling above list price with multi-bid situations. We’re house hunting right now, and it is WAY hotter/more competitive than we were expecting given everyone insisting that “the housing market hasn’t bottomed out yet”.

Post # 16
Member
3584 posts
Sugar bee
  • Wedding: September 2011

I also think it’s a bad idea.  The last thing you’ll want to worry about when you’re finishing school/finding a residency is trying to sell a condo.  I wouldn’t use my loan money for that.  It sounds like you are thinking of your student loans as income, but they are debt. 

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