Regarding a house...

[bla_3x]

If we plan on living in the city which i do residency, and we want to buy a house in this city in residency what is the better/smarter way to go?
1. Buy a smaller more easily affordable house in hopes of having some money for savings to help put down some loans (private) and look to upgrade soon after residency? We really don't want to go smaller than 3br.
2. Buy a bit more/nicer house that would fit us for a longer period in hopes of selling it/re fi/etc. to help with finances but not have so much to save during residency?
The vitals are:
We have a baby now and plan on at least one more in the next two years. Our first choices for residency are places that are not very affordable for housing. Student loans are the max for Stafford's (consolidated) and about 40K in privates avg 9%.
My wife works and brings in fairly good $ around 60K.

Whatcha think??

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[bkpa2med]

I think it really depends on the cost of the homes in the city. If it's NYC, a "small" home will still cost of $450k+ (townhouse, 2br)

 

[bla_3x]

If its is where I would most like to match it would be Las vegas. Not as bad as NYC/LA..but not really good compared to most other places I have interviewed.
Prob looking at upper 200s for just about anything new. well into the 300s for decent size family home.
Dunno how much to spring for though. We have never had a house before and the idea of such large mo payments are pretty scary compared to the itty-bitty rent payments we have now. Wife brings in about 65K + my residency sal.
I know we "can" afford quite a bit, but my question is do we go for what we can or think small and save?????

 

[bkpa2med]

So, together you guys should bring ~ $100k minus taxes give or take say you net $65-70k which is really good. Remember the interest you pay on your mortgage is tax deductible and you're money isn't typically being thrown in the garbage as rent. From personal experience, a home in Vegas would be a good idea because they do appreciate quite a bit. Regardless of what people say, Vegas is still a hotspot where many people, including myself, would love to be.

 

[mshheaddoc]

So, together you guys should bring ~ $100k minus taxes give or take say you net $65-70k which is really good. Remember the interest you pay on your mortgage is tax deductible and you're money isn't typically being thrown in the garbage as rent. From personal experience, a home in Vegas would be a good idea because they do appreciate quite a bit. Regardless of what people say, Vegas is still a hotspot where many people, including myself, would love to be.

I agree. Vegas market isn't going to bubble as bad as some of the ones in Arizona although if I remember correctly, that market was/is saturated (see what you can find out about this).

There are some tricks to go in buying a house if you know you aren't going to stay there for a long time. Starter houses included. If you think you will be staying in that area and can afford the house during residency, I would probably say go with the longer term investment only b/c moving/upgrading your home is an investment in itself. You don't want to be investing a whole lot of money into a home you know you want to upgrade it in a short time frame (does that make sense?). Are you looking in the immediate vegas area or anything surrounding it? Do you know your credit worthiness? Have you talked to any mortgage counselors to see what you'd be able to qualify for? I'm sure you haven't gotten to do all of that but it might be a good idea to start shopping now while you're on the downslide of things in reference to med school.

With some creative financing and really sticking to a budget, it might be worth it to try to get your "permanent" home rather than worry about the hassles of moving at a later date. I would try to crunch the numbers about budgeting and see if its feasible if you afford it. Also remember, some areas you might be able to find some good deals with housing being stagnant in those areas after the huge boom in the past 5 years in that area ... There was alot of appreciate/inflation in AZ/NV areas that I'm sure have burst a little so you might find some good deals. It was slowing down in 2004 but I haven't been in the mortgage field since then so I can't really tell ... I'll ask a few of my co-workers what they think ... I did tons of properties in NV/AZ.

 

[Miami_med]

If its is where I would most like to match it would be Las vegas. Not as bad as NYC/LA..but not really good compared to most other places I have interviewed.
Prob looking at upper 200s for just about anything new. well into the 300s for decent size family home.
Dunno how much to spring for though. We have never had a house before and the idea of such large mo payments are pretty scary compared to the itty-bitty rent payments we have now. Wife brings in about 65K + my residency sal.
I know we "can" afford quite a bit, but my question is do we go for what we can or think small and save?????

Vegas is like Miami. Rents are like 1/2 to 1/3 of PITI on a house. During residency, you could probably rent a reasonably nice 3+ BR house in the 2k/month range, and you won't risk getting caught in a market downturn. You also won't have to unload the house if you take a job out of state. Vegas has no state income tax, so tax deductions for home ownership aren't as good as some other places. With 100k/year, you could easily knock out those privates. Seriously, renting is WAY cheaper in a lot of markets right now. Check out craigslist if you don't believe me.

 

[bla_3x]

My idea was that with renting we would not have a house to sell in the future, and we could really use that money to buy a nice house in LV and/or help pay down some loans. With renting in a reasonably nice are it can be pretty expensive (the difference is not that great). I have seen some listings on sites like CL and the area that these are in are shady.

mshheaddoc:
Thanks for the info! We are not able to find any areas that are feeling any pressure to sell. In fact, even with this so called downturn, LV new homes are selling out VERY fast (still a lottery system for several dev.)
Our credit situation is OK. My wife's is much better that mine. me upper 600s her 700s.
We are strongly considering the "Doctor loan" a-la www.thedoctorloan.com
With this, and the options like Interest only (which i thought would be perfect since residency for three years followed by big jump in salary), ARMS, 40y, etc.
Also, we don't really have much $ for a down payment so that would work well for "us".
Our fear with buying a resale is that there is little to no appreciation left as the prices are just outlandish. We need a house that will give us at least something. Also, with a new home we can look for one with incentives and such that would make positive equity instantly...at least that is how we saw it...PLEASE correct me if I am going the wrong way!

 

[Jocomama]

1. Buy a home that you will want to live in for 3 years.
2. Don't buy new construction - one built in last 15 yrs is fine. There will be more information on any issues, compared to newer developed homes. We dealt with this for many years with the condo boom in S Beach, Chicago and NY.
3. A 5 yr old house vs new home value doesn't always correlate. So many other factors.

4. Do not use doctorloan.com. IT is a small outfit and they don't come close to the larger bank programs with 80/20s. Trust me - it is marketing rather than quality and reputation.

5. Most large lenders offer interest only. If you know you'll be out of there in 3 yrs, then do a 3/1 interest only with 2nd loan (fixed or equity) to cover your lack of down payment.

Real simple - talk to a Mortgage Banker or Broker. Always first go to family; talk to whomever they used. Often, if they are with an established bank, they can handle your loan in another city.
I lived in Chicago and did loans from Hawaii to Florida and NY, in my past banking life.

Hope this helps.
I concur with mssheads advice from her post.

My idea was that with renting we would not have a house to sell in the future, and we could really use that money to buy a nice house in LV and/or help pay down some loans. With renting in a reasonably nice are it can be pretty expensive (the difference is not that great). I have seen some listings on sites like CL and the area that these are in are shady.

mshheaddoc:
Thanks for the info! We are not able to find any areas that are feeling any pressure to sell. In fact, even with this so called downturn, LV new homes are selling out VERY fast (still a lottery system for several dev.)
Our credit situation is OK. My wife's is much better that mine. me upper 600s her 700s.
We are strongly considering the "Doctor loan" a-la www.thedoctorloan.com
With this, and the options like Interest only (which i thought would be perfect since residency for three years followed by big jump in salary), ARMS, 40y, etc.
Also, we don't really have much $ for a down payment so that would work well for "us".
Our fear with buying a resale is that there is little to no appreciation left as the prices are just outlandish. We need a house that will give us at least something. Also, with a new home we can look for one with incentives and such that would make positive equity instantly...at least that is how we saw it...PLEASE correct me if I am going the wrong way!