Post # 17
OH! ALso, a lot of lenders won’t lend for a condo unless you put 20% down, some as high as 30% down. They consider condos way higher risk than single family homes. It also isn’t just FHA that wants to see owner occupied stats – every lender we have talked to wanted 70% or higher owner occupied for a conventional loan.
Post # 18
I’ve stayed in the same line-of-work regarding healthcare. I was a CNA at 17, and worked for 2 years while going to school. I’m a nutritionist now, I previously worked at a gym but not for long due to family issues.
Before that, I worked as a waitress, which was excellent pay for a few years! I’ve had long-term jobs ever since I was 14, and even before that if you want to count working for my dad’s business. I’m 21 years old now. Thank you for helping.
As far as my reported money that I make, I’ll only have 1 year of “good” starting out pay. I was only previously making approx. $20,000 (aside for waitressing which wasn’t reported to the T).
I would like to buy a condo/town home, not a house. I think a hosue is too much maintence for me right now. In my situation, it’s logical to actually buy a place, instead of throwing approx $35-40,000 dollars away for a space. It’s like throwing your money into a black hole. In my situation, this would be the most practical thing to do and I’m not wanting to sell it right after graduating. I’ll wait a few years more. Thank you for your advice.
@crayfish, I did check out those websites. I’m thinking of highering the $ to 110k because I’m selling more beautiful places in that range. Portland seems pretty decent so far.
As a side note, my residency is only 1 year and I start making an income during that time. I’ll be attending NCNM, for the licensed Naturopathic Physician program.
Post # 19
I think 100-300 for HOA is reasonable. We pay 207$ now and it goes up about $5-$10 per year. Don’t forget to factor homeowners insurance into your budget too – you’ll definitely need it! There are just a lot more variable costs when it comes to owning a home and you may not want to deal with it while you’re in school – you’ll already have a lot on your plate! I don’t know anyone that has bought a house in med school but many do in residency that I know (for the same reasons with the added bonus that they figure they may stay in that city after their residency is complete) whereas with med school, it will be up in the air with where you are placed after. (if you rent it out because you can’t sell it, you may be across the country and will be tough to manage the property yourself – you’ll have to pay someone to manage it for you, as well as potential realtor fees to help rent it). My sister and Brother-In-Law own a townhouse from his residency and now live 500 miles away and it’s been a huge expense and pain in the ass for them.
It’s definitely good you’re thinking about all of it. I guess if I were you, I’d find an apt/house to live in with a few roommates (maybe other med students?) so the rent is cheap and you can still save some money for a downpayment down the line. Renting can suck (pissing $$ away) but it does have its perks too! (low – no unpredictable variable costs and stress!)
Oh and just want to reiterate again how much paying back student loans sucks! My monthly payment (for 80k of loans) is $1700 (almost our mortgage!) The interest is awful. I really wish I had worked my way through school (not really an option for you) and paid as I went along. I’m just so thankful I wasn’t ever able to get all the extra living money (my school was small and didn’t have tons of loan $ available)
Post # 20
$10k is a nice down payment but unless you put down 20% you will have to pay private mortgage insurance At about $150/mo until 20% is paid off the principal. Also, do you have money to cover closing costs- probably about 5k for 100k loan. For FHA you only need 3.5% down.
Don’t think of rent as a black hole. It’s serving the purpose of making your life easy while you are in a very stressful program.
Post # 21
I’ll definitely have 5k left in my savings. I don’t want to throw all my eggs in one basket. I need back up $, too. I figure, I put around 10-15k down and save the extra for closing costs, move in $, deposits, etc.
Post # 22
Go to your bank and ask for advice. I work at a bank and the things we look at are your credit score and debt to income ratio mostly. Add up your monthly loan payments, credit card payments, new monthly mortgage payment and divide that by your gross monthly income. If it is 38% or less we would approve you.
Post # 23
@EmilyJean: I don’t have any loan payments because I’m still in school, or any credit cards for that matter. I should get a card to raise my credit, though. It’s considered Average point right now.Should I try to calulate what my mortage may be and divide that by my monthly income?
Post # 24
I have friends that did this and are totally underwater. If you buy something, it needs to appreciate at least 6% by the time you sell it to cover realtor fees. I assume you will live there 5 years, which means you need more than 1% appreciation per year. Plus, you will be paying only the interest on your loan the first few years, so that means you won’t be building equity. Take a look at comps and see if this is realistic for your area. It is not true where I live.
I would only do it if the cost of buying works out (with maintenance and taxes) to be less than renting. It is not “throwing money away” if renting let’s you live for cheaper with less responsibility for maintenance and more flexibility if you need to move to a cheaper place, decide to move or want to take a job in another state. I have friends who are trapped in their market and cannot move for better jobs or downsize to save money without becoming a landlord at a loss.
Post # 25
@RawHoneyBee: Be aware of one fact:
Whatever payments you throw toward the mortgage in the first 4 years will go LARGELY to interest. You will pay down very little on the principle.
It means that in four years you won’t establish much equity at all.
Post # 26
I believe, I’m eligible for a very low interest rate of 2.3% or less for a 15 yr mortage and it’s my first home. To me, renting is throwing away money towards solely a place to live. I want to avoid this by-all-means.
Post # 27
I am just now finishing a 4 year Ph.D. and I am moving. I can 100% say I am so glad to not have a house to see at the moment. Darling Husband and I have lived in a cheap apartment for 3 of the 4 years (downgraded from the place we rented on 2 corporate incomes in order to increase savings). Honestly, in those 3 years there were not many repairs but the entire bathroom pipes had to be replaced which was no small job. In this case, my only responsibility was to allow access to the work crew. We were able to know our costs each month and apartment living meant out heating costs were very low as we are a middle unit so 2 of our 4 sides are insulated by other apartmetns. My schedule was hectic and unpredictable, especially around deadlines and Darling Husband often traveled for work so neither of us had the desire to maintain a house or condo. Yes, we paid rent and don’t have anything tangible to sell BUT it was cheaper than any mortgage would have been, we don’t have to deal with the stress of selling/repairs/renters and we were able to save a good amount of $$ by living below our means instead of trying to stretch our income. So, I hear that you think rent is throwing $ away but respectuflly disagree that it is a waste to rent. Especially, if you are living alone, I would highly recommend finding a roomate and looking for a place to rent for $500 or less per month so oyu can reduce your student loan burden.
Post # 28
A responsible realestate agent in our area would never recommend buying unless you plan on living somewhere 5-7 years min. Our market has barely recovered since 2008.
Some HOA’s/condo associations do not permit subletting.
Post # 29
Just another perspective – my Darling Husband is in medical school (not sure if your natropath physician program has the same timeframe) but essentially it is 2 years of “school” school, and then 2 years of rotations. He’s in his 3rd year now, and luckily is in the area for most of his rotations, however his 4th year rotations will not be in this state. It would be awful if we had to keep up a home from a distance, WHILE he’s in school (read: CRAZY stressful and you’re not going to want to deal with house problems and/or tenant issues in the midst of rotations/exams).
Also, I know that M.D./D.O. residency programs are paid by Medicare, and during that period they earn around $40K-$50K/year. And are required to start repaying student loans during that time. Which doesn’t allow much wiggle room in terms of monthly cash flow, assuming you also want to buy a house where your residency is.
Do what you want, but I’d suggest finding a cheap apartment for a couple years and taking out less in loans, rather than hassling with home ownership during med school.
Post # 30
The cheapest apt I’ve found was 700$ and it’s in a safe area. My mortage payments have been calculating to $400 or less per month, HOA around $100-200 for a 2 bedroom condo/townhome that I could possibly rent out the second room to a friend, which would help pay the bills. The total at $500 (could be even less) is $6,000 per year, not including insurance. The total during 4 years is $24,000 and I own the place.
I get summers off, except for my last summer. I plan to work as a licensed nutritionist during that time, which is about $30/hour. If I work 30 hrs per week that’s about $3,700 in a month, which in two months I can make a years worth of mortage payments and then some.
An apartment breakdown:
$700*12months=$8,400 for the rent ALONE
$33,000 ONLY IN RENT for a cheap apartment in Portland.
I refuse to spend that kind of money on a space to live if I’m not owning anything in return.
Post # 31
@RawHoneyBee: In addition to insurance, don’t forget to include taxes, utilities – gas/electric/hot water/sewage costs (many of these are often subsumed into rent charges), and annual maintence costs (I’ve researched a little for myself and apparently 1-3% is average). Heating is can be fairly pricey, particularly in colder climates like Portland, OR.