Buy vs. Rent poll

[WhoooaaaBUNDY]

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Just trying to get an idea on what the majority of us are planning to do about housing at this point ... regardless of school, age, family status, etc.

 

[howui3]

If you have the financial means or the area of the school allows you to buy a home or an apartment I would recommend that. Real estate is a great investment, and after 4 years you can sell and avoid the tax. It also allowed you to have another student as a roommate which will help pay the mortgage.

I am planning on going to a school in a large city (LA, Boston, NY) so getting my own place is out of the question.

 

[cowsgomoo]

If you have the financial means or the area of the school allows you to buy a home or an apartment I would recommend that. Real estate is a great investment, and after 4 years you can sell and avoid the tax. It also allowed you to have another student as a roommate which will help pay the mortgage.

I am planning on going to a school in a large city (LA, Boston, NY) so getting my own place is out of the question.

I am going to try and do this too even though I plan to go to UPenn. I hear property values are pretty high in the Philly area. Anyone have any ideas of how high?

 

[Kniles5]

I bought my house in Charleston about 2 years ago. I am so glad that I am not going to be throwing away my loan on someone else making money (renting), I would rather keep it as equity. If you can buy, DO IT!!!! It is a legal way to invest your loan.

 

[Slash]

I bought my house in Charleston about 2 years ago. I am so glad that I am not going to be throwing away my loan on someone else making money (renting), I would rather keep it as equity. If you can buy, DO IT!!!! It is a legal way to invest your loan.

How does a dental student qualify for a home loan when our only source of income will be loans?

 

[LG-dent]

How does a dental student qualify for a home loan when our only source of income will be loans?

Slash- if you do not have another source of income then you will qualify for much less. This is also assuming that you have a down payment. If you decide to buy, try to get a cosigner to reduce your interest rate. Also, make sure you look into the city taxes and insurance before you buy. These two expenses can be more than the mortgage amount in some places.

 

[WhoooaaaBUNDY]

Are any of you going to try and buy with little or no down payment?

Have any of you decided to rent only because of a lack of a respectable down payment?

 

[Jeppedo]

Here's the deal with buying a house - Anyone can be approved for a loan for just about any amount.

Yeah, the interest and fees may be higher if you don't have great credit/no credit.... but anyone can buy. If a lender tells you they cannot lend to you, GO SOMEWHERE ELSE. There are a ton of great no money down loan programs out there, find one that suits you well.

Why waste your money on rent when you can purchase something that will appreciate?

 

[Kniles5]

How does a dental student qualify for a home loan when our only source of income will be loans?

If you are not still an undergrad, you should have a full time job. This is the income you will qualify under (your 2005 income). You will also need a down payment, typically 5-20% of the loan amount. Like I said, IF you can do it, you should. It only makes sense.

 

[LG-dent]

If you are not still an undergrad, you should have a full time job. This is the income you will qualify under (your 2005 income). You will also need a down payment, typically 5-20% of the loan amount. Like I said, IF you can do it, you should. It only makes sense.

I agree. . . if you can then yes you should as long as you can afford it. Make sure you can afford it for the duration of dental school and the bank won't take it back.

I also have a degree in finance and I would recommend getting a cosigner to reduce your interest rate, get a roommate or two, try to put down as much as possible and don't live beyond your means just because some bank will give you more then you need.

Appreciation. Know your housing market. Hopefully after 4 years you would be able to sell it and make a little money. The 2006 report says that the housing market is out of control and about to pop. Just be careful.

 

[xxJuiceDxx]

Like everyone said, it is IDEAL if you can buy a house. I work as a loan officer right now and though there are many stipulations and guidelines that must be met in order to qualify for a home loan, nothing is impossible. Rule of thumb: the less information that is verified through proper documentation, the higher your rate will be and the less financing will be available. It may be rather hard for someone, particularly a full-time dental student, to qualify for a loan because employment verfication will be checked (unless you can come up with a down payment ranging from 5% to 20%). Thus, co-signing will not work because as full-time students, you have no real income, unless you're taking out loans. Your co-signers income will be used on top of yours and if you're approved, you have two great things happening: increase in your credit score as you pay off the mortgage(s) and equity gain. If you guys have any questions, feel free to shoot them to me. And if you're thinking of buying a house and feel like you're getting shafted by the person doing your loan, don't hesitate to ask me for advice as I would be more than happy to help you guys out. Peace. 👍 👍 🙂

 

[NewNameForGoogleBot]

To add an opposing view to the mix, I would say that buying a house is not a no-brainer. There are lots of risks to consider and numbers to crunch. I would say that if you are only planning on living in the area for the four years of dental school, chances are the fees associated with buying and selling your home will eat up most, if not all of any increase in eqiuty you gain. Also, interest rates are on the rise. If you have an ARM, make absolutely sure you will sell before your "locked-in" period ends. Finally, residential real estate is currently, for the most part overpriced, although this varies by area. There will either be a fall in prices or growth will be almost non-existent in many areas of the country. Try running your numbers with a 2-3% loss in value per year and you get scary results. Don't forget PMI.

That being said, if you plan to live in a house for more than just dental school or have other sources of income (not loans) and need a tax break, a house can be a great financial decision (I cringe when I hear people mention their house as an "investment).

 

[DentalNerd]

To add an opposing view to the mix, I would say that buying a house is not a no-brainer. There are lots of risks to consider and numbers to crunch. I would say that if you are only planning on living in the area for the four years of dental school, chances are the fees associated with buying and selling your home will eat up most, if not all of any increase in eqiuty you gain. Also, interest rates are on the rise. If you have an ARM, make absolutely sure you will sell before your "locked-in" period ends. Finally, residential real estate is currently, for the most part overpriced, although this varies by area. There will either be a fall in prices or growth will be almost non-existent in many areas of the country. Try running your numbers with a 2-3% loss in value per year and you get scary results. Don't forget PMI.

That being said, if you plan to live in a house for more than just dental school or have other sources of income (not loans) and need a tax break, a house can be a great financial decision (I cringe when I hear people mention their house as an "investment).

I agree. After paying $4000-$6000 in interest every year, $1200-$2000 in property taxes, $600 in insurance, renting may be best...a decent apartment for $600 MO = $7200. I realize I'm throwing away this money but I'm also throwing away up to $8600 per year if I buy. After 4 years, you don't have much equity in a home. Most all your payment goes to interest. The big difference is that I don't have any income to deduct my interest and property taxes from.

How does this work? If I file my taxes with no income, will I get some of my interest and property tax money back?

Without a guarantee of 7%-10% appreciation every year, it may be best to rent.

I'd like to hear your opinions because I need help. I plan to get pre-approved now while I'm working full time.

 

[LG-dent]

Getting pre-approved is very smart. In your post, $1200 in property tax? Its usually around $4K depending on your state and size of house. There are so many additional costs that go into owning a house.

If you decide to buy why don't you consider buying a town house or something that is a little cheaper.

Check out interest rate. It seems that they are on the rise. AJY1013 would know better.

To answer your tax question. Yes you would receive some money back from the government because its money going out of your pocket. Play with your taxes this year and see how much you would receive back.

 

[xxJuiceDxx]

Yea, taxes and interest rates are write-offs. If you have an accountant, I would highly suggest having someone handle all that stuff. I don't know the first thing when it comes to handle personal tax work.

As far as obtaining a loan, though you work full-time, the only way you would get approved for a loan is if the d-school you plan on attending is in the same city. If you move to a new city, you will need to show proof that you have acquired a new job and in the same line of work as before (at least 2 years of consistent work history in either the same job or in the same line of work). On the flipside, you can always do a 'No Documentation' loan, which does not require any verfication of your employment, income, and assets. But these types of loans are available for individuals with FICO scores of 600 or above. And 100% financing is hard to come by, though not unobtainable if some research is done by whoever is doing your loan.

Interest rates are on the rise, though they have slowed down somewhat the past month or so. If your FICO scores are solid, interest rates lower than the national prime rate is easy to obtain, though there are many other factors that may affect this. For the most part, your FICO score drives what rate you will receive.

As far as what real property taxes would be, it really depends on what state and city you are living in as well as the appraised value of the land your house sits on.

Town houses are a good choice and prices on those have risen pretty steadily as mortgage rates have continued to rise, though these numbers may not reflect what is going on in the Los Angeles and San Diego housing markets. And most of you guys would have to own a house that is 200K and lower, unless you have a parent who can buy your home for you. I hope this helps in some way and ask away if you guys have questions and I'll try to answer them if I can.

 

[DentalNerd]

Yea, taxes and interest rates are write-offs. If you have an accountant, I would highly suggest having someone handle all that stuff. I don't know the first thing when it comes to handle personal tax work.

As far as obtaining a loan, though you work full-time, the only way you would get approved for a loan is if the d-school you plan on attending is in the same city. If you move to a new city, you will need to show proof that you have acquired a new job and in the same line of work as before (at least 2 years of consistent work history in either the same job or in the same line of work). On the flipside, you can always do a 'No Documentation' loan, which does not require any verfication of your employment, income, and assets. But these types of loans are available for individuals with FICO scores of 600 or above. And 100% financing is hard to come by, though not unobtainable if some research is done by whoever is doing your loan.

Interest rates are on the rise, though they have slowed down somewhat the past month or so. If your FICO scores are solid, interest rates lower than the national prime rate is easy to obtain, though there are many other factors that may affect this. For the most part, your FICO score drives what rate you will receive.

As far as what real property taxes would be, it really depends on what state and city you are living in as well as the appraised value of the land your house sits on.

Town houses are a good choice and prices on those have risen pretty steadily as mortgage rates have continued to rise, though these numbers may not reflect what is going on in the Los Angeles and San Diego housing markets. And most of you guys would have to own a house that is 200K and lower, unless you have a parent who can buy your home for you. I hope this helps in some way and ask away if you guys have questions and I'll try to answer them if I can.

Thanks for the info. I plan to make an appointment with a loan officer from my bank to see what my options are. I was worried about my d-school being in a different state than my current residence. I thought this might affect the loan process. Someone mentioned they would write it as a second home, but I don't own one now so not sure this can be done. I did not know about the "No Documentation" loan, so I will ask about that.

Regarding property tax and interest. I realize they are write-offs but since I will have no income, will I get any of that money back? I guess I can play around with my 05 taxes to see the outcome if I show little or no income as LG-dent suggests.

Can any current D-students/homeowners answer this question??

 

[xxJuiceDxx]

Thanks for the info. I plan to make an appointment with a loan officer from my bank to see what my options are. I was worried about my d-school being in a different state than my current residence. I thought this might affect the loan process. Someone mentioned they would write it as a second home, but I don't own one now so not sure this can be done. I did not know about the "No Documentation" loan, so I will ask about that.

Regarding property tax and interest. I realize they are write-offs but since I will have no income, will I get any of that money back? I guess I can play around with my 05 taxes to see the outcome if I show little or no income as LG-dent suggests.

Can any current D-students/homeowners answer this question??

Since you are not a current home-owner, your new home will be considered a primary.

No-documentation loans are available, but the rates are higher. Because you are moving out of state, a 'no doc' loan might be the way to go. I am not sure if banks can do no-doc loans. If you need any advice, feel free to pm me.

As far as the taxes are concerned, do you have an accountant friend? Those guys are usually the ones that have all the answers to these questions. Let me find out tomorrow, as I too am curious.

Hope this helps. 👍 👍

 

[Slash]

So in a 'no doc' loan the finance company/bank asks no questions about your current income and goes just off your FICO rating? Sounds almost too good to be true....if that's the case, most dental students with decent credit should be able to buy a home rather than rent an apartment. Am I missing something here?

 

[xxJuiceDxx]

So in a 'no doc' loan the finance company/bank asks no questions about your current income and goes just off your FICO rating? Sounds almost too good to be true....if that's the case, most dental students with decent credit should be able to buy a home rather than rent an apartment. Am I missing something here?

In the mortgage industry, people with good FICO scores are the ones that are rewarded with the lowest rates. Also, these same people have the most options available to them. Those with crappy FICO scores do not have this luxury, and have to result to acquiring loans with pre-payment penalties attached to them, not to mention a smaller range of loan programs accompanied by higher interest rates. However, most of the time, 100% no-documentation loans are not available.

 

[AtkinDent]

I am going to try and do this too even though I plan to go to UPenn. I hear property values are pretty high in the Philly area. Anyone have any ideas of how high?

Housing around the campus is expensive because of the more affluent ppl residing there. However, I ever operated a 1500 sg ft cell phone store along Walnut street in 2003 for only $1300 per month inclusive of all utilities. You can actually buy a 3 bedroom terrace house (with basement) ~ 20 minutes drive from the campus but still within the downtown area for as low as $40- 50 K which is really cheap and affordable, but you may have to spend some time looking for the right neighborhood. Crime rate is pretty high in Philadelphia, where I was once robbed a brand new phone at my shop... 😡

 

[AtkinDent]

I am going to try and do this too even though I plan to go to UPenn. I hear property values are pretty high in the Philly area. Anyone have any ideas of how high?

Allow me to ask you a question: Why would you choose to go UPenn for 3 - 4 times of what you would be paying for your low resident tuition at MCG?

 

[starvinstudent]

Here's the deal with buying a house - Anyone can be approved for a loan for just about any amount.

Yeah, the interest and fees may be higher if you don't have great credit/no credit.... but anyone can buy. If a lender tells you they cannot lend to you, GO SOMEWHERE ELSE. There are a ton of great no money down loan programs out there, find one that suits you well.

Why waste your money on rent when you can purchase something that will appreciate?

OBVIOUS REASONS:
taxes, monthly Interest, trash bill or water (usually included in rental payments), homeowners fees.

these can make buying a home cost $300-$400 more a month than renting.

 

[ncalcate]

OBVIOUS REASONS:
taxes, monthly Interest, trash bill or water (usually included in rental payments), homeowners fees.

these can make buying a home cost $300-$400 more a month than renting.

Your list is a good one, but you forgot one other point (and one that Jeppedo may have overlooked):

Real estate doesn't always appreciate. Ask anyone who bought real estate in 1988 and then tried to sell it 4 years later in 1992. Depending upon where you lived, some people had properties that depreciated by more than 25%.

Anyone that buys real estate today under the impression that it will definitely appreciate over the 4 years of dental school might be in a for a rude awakening. There are definite risks associated with a real estate purchase, especially if your time frame is only four years. Proceed with caution...

 

[Future DDS]

What's the minimum "solid FICO score"?

 

[starvinstudent]

Your list is a good one, but you forgot one other point (and one that Jeppedo may have overlooked):

Real estate doesn't always appreciate. Ask anyone who bought real estate in 1988 and then tried to sell it 4 years later in 1992. Depending upon where you lived, some people had properties that depreciated by more than 25%.

Anyone that buys real estate today under the impression that it will definitely appreciate over the 4 years of dental school might be in a for a rude awakening. There are definite risks associated with a real estate purchase, especially if your time frame is only four years. Proceed with caution...

yea your right, however townhomes that were built 5 years ago next to our school sold for $80,000 and now they are $170,000.

And something that you forgot too, if you rent you have no control over who lives around you.

If you buy you can find something that is more comfortable and that is quiet that will allow you to ACTUALLY HAVE SILENCE TO STUDY.


Hows that ???

 

[Temple 2006]

I am going to try and do this too even though I plan to go to UPenn. I hear property values are pretty high in the Philly area. Anyone have any ideas of how high?

I go to the other school in philly and bought a house in Manayunk/Roxbourogh, where no Penn folk live for 129K 2 years ago......my neighbor sold the identical condo for 178K last month. Moral of the story, if you can afford the downpayment, buy a house and make 75K when you sell it. That would be a year tuition at Penn and 2 at Temple...hehehe....good luck

 

[Dr.BadVibes]

I also bought a beautiful condo in Roxborough in Philly for only $50K last year which allowed me to get instate residency, in which the savings basically paid for the condo. So far the condo has almost went up in price the cost of one year tuition!!! 😱 Not bad, eh! Its all about proper financial planning.....

 

[starvinstudent]

I also bought a beautiful condo in Roxborough in Philly for only $50K last year which allowed me to get instate residency, in which the savings basically paid for the condo. So far the condo has almost went up in price the cost of one year tuition!!! 😱 Not bad, eh! Its all about proper financial planning.....

nice

 

[pmoney]

I didn't read all the posts but for all of those folks suggesting buying a townhome or such, it may be well and good in some areas but not at all advisable in others.

Take for example buffalo. Now the housing market there is basically stagnant. You can buy new construction for almost as cheap as an older house. Furthermore, taxes are so high in some of the suburbs, such as East Amherst (which is actually furthere than you would want to stay but it provides a good example) you might be paying almost as much in just TAX as you would on rent.

 

[xxJuiceDxx]

Sorry to go off-topic, but is that a PTG E30 M car, pmoney?

And to the rest, best of luck on making a decision on either housing or renting. 👍 👍

 

[pmoney]

Sorry to go off-topic, but is that a PTG E30 M car, pmoney?

And to the rest, best of luck on making a decision on either housing or renting. 👍 👍

No, Team PTG only races vehicles in the US, and started running BMWs in 1995.

THat is a pic of a Team Schnitzer e30 M3. In addition to being sponsored by BMW itself (much as PTG receives support from BMW though it is actually not as much as one might imagine), they had Warsteiner as a marquee sponsor though I don't think its livery is on that particular car. It raced in DTM in Germany.

 

[templedentist]

How does a dental student qualify for a home loan when our only source of income will be loans?

Anyone with good credit and a sufficient down payment can get a no-doc loan (they don't get any documentation on how much you have in the bank, or how much you make, it goes soley on your credit). That's what I did to buy while in school. I know this is a kinda old post, but should anyone stumble across it a no-doc loan is the best way to go while in school unless you're independantly wealthy. Those student loans you're living off of count against you with a traditional loan, but nothing matters with a no-doc and as long as you work out a budget for how much house you can afford with those loans then you're set.
By the way, I'm selling that townhouse I bought if anyone is interested, I might rent to the right person/people...
Good luck with your studies!

 

[dexadental]

I wouldn't buy anything right now with the market so terrible. Everything appreciated so fast that now it is hardly possible to sell anything or buy something reasonably priced. I'm waiting until next year to buy if the market improves...just renting for this year.

 

[aggie-master]

I'm going to have $25,000 saved up before starting school. If my wife finds a decent job I think we're going to buy instead of rent. We have excellent credit scores... I just want to make sure that we can pay the mortgage without directly using student loans to do it.

I'm sick of living in apartments. 🙁