Buying a House as a Med Student

[Jocomama]

Quicken loans was ROCK financial that was sold to Intuit (then called mortgage division Quickenloans) before the 99 Fed rate hikes. Danny Gilbert was the main owner, with partners. Quicken didn't do so well, and it was sold back (by Intuit) a few years ago for pennies on the dollar, to Dan Gilbert and friends. It retains the name quicken and is also called ROCK. Their corporate HQ is back in Michigan - Detroit suburbs.

Most of their products are Countrywide's. They are a huge originator of CW wholesale. Thus they have the no doc with the best rate if you qualify. It's called "Fast and Easy". I did many of those for my clients during my short 1 yr stint with CW Novi, MI while I was doing a fellowship in Ann Arbor, since RBC didn't have a large branch there, and I didn't want to keep sending my deals back to Chicago.

Now then - there is the different option, called the correspondent. A bank/broker can use Citimortgage guidelines, underwrite and close the loan, which becomes Citimortgage loan right after closing.

We can get into more details about selling, and how a bank/broker can not only directly sell their own loans to Fannie Mae/FHMLC, etc or on Wall Street (bundled 10-20mil) but can also sell the "servicing" of the loan to Chase, WAMU or CW.
Lot's of options.

Anyway - I know the folks at Quicken/Rock, and they have a great system.

Dude..

Perhaps I should have expanded when I said I was self-employed...

So your implying that quickenloans.com does not require income documentation when underwriting a loan? They don't need any proof?

That means that Quickenloans services their own loans, right? Unless the mortgage company is a huge bank 99% of the time a mortgage bank is going to sell your loan to another bank. The reason they sell the loan is to make additional revenues. The bank gets paid to sells loans to other banks.

In order to sell a loan (like yours) the mortgage bank that originates the loan must abide by a general set of underwriting guidelines to approve the mortgage. In other words Quicken uses rules that Wells Fargo makes so that Quicken can turn around and sell the loan to them for a fast profit. Wells Fargo doesn't want a bunch of risky loans so they make the rule. Countrywide, Chase, PNC, are just a few of the huge mortgage banks out there. Everyone else is just a starts the loan and the biggies buy them up on the secondary mkt.

So you saying Quicken doesn't check income requirements is wrong. They don;t service their own loans...unless you believe some hack on the phone y...you better stick to chem and bio...






They don;t sell their loan off to Countrywide or Wells Fargo?

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[Jejton]

I would like comments on this hypothetical ( since I haven't received any acceptances yet ) situation. If I get in, and go to, my state school I would save about 20 grand over my top choice private school. I am married and my wife should be done with school and working by then ( I hope ). Would it make sense to max out my loans ( I dont know how med school loans work yet ) to take out the 40 grand I would have had to take out for a private school, use the remainder for a down payment on a house. We would be able to pay the mortgage from my wife's income. This scenario assumes:

a. ) After down payment is made, the mortgage is equal or close to what a rental would cost in the same area, and

b.) I would stay in the area for residency. It is close enough to NY that commuting wouldnt be that bad.

Is that a feasible plan ? Even though I havent gotten in anywhere yet, I did have two interviews ( so far ) and I am trying to figure out what my options would be if I do get in.

 

[dpmd]

You would only want to take out extra loans to use towards a mortgage if the interest rate is less than the rate you get on the mortgage (taking into account origination fees, etc). With the new fixed rate stafford, I don't see this as being beneficial (unless you have some horrid 10% mortgage or something). Second issue is that you can only take out 40,500 in stafford loans per year(up from 38,500). Even if your state school is cheaper than the private school, with tuition, fees, etc there might not be a ton left over. If you use one of the many rent vs buy calculators online and determine buying is right for you, you would be better off doing one of the combo mortgages that avoids PMI. What you can start doing now is save as much money as you can, and earn as much as you can (summer job or whatever) before you start school so you have some money for closing costs and a small down payment (you can finance closing costs if you have to, but if you can avoid it you will save some money).

Any other thoughts on this (or better ideas than mine)?

 

[Jocomama]

I agree - dont need downpayment money,and remember PITI (total mortgage plus property tax and insurance/condo fees; per month) is ~25% higher than rent. This balances with tax deductible items. However, in residency, this may not be realistic based on limited monthly stipend.
Clarify: paying $2000 PITI is close to paying $1600 rent since mortgage interest and property taxes are deductible from Fed Income Taxes. But having the extra $400 per month until April 15th is easier said than done for residents.
Smugtroll used to be in mortgages; what do you think?

You would only want to take out extra loans to use towards a mortgage if the interest rate is less than the rate you get on the mortgage (taking into account origination fees, etc). With the new fixed rate stafford, I don't see this as being beneficial (unless you have some horrid 10% mortgage or something). Second issue is that you can only take out 40,500 in stafford loans per year(up from 38,500). Even if your state school is cheaper than the private school, with tuition, fees, etc there might not be a ton left over. If you use one of the many rent vs buy calculators online and determine buying is right for you, you would be better off doing one of the combo mortgages that avoids PMI. What you can start doing now is save as much money as you can, and earn as much as you can (summer job or whatever) before you start school so you have some money for closing costs and a small down payment (you can finance closing costs if you have to, but if you can avoid it you will save some money).

Any other thoughts on this (or better ideas than mine)?

 

[krazymackbk]

 

[EM_Rebuilder]

I would highly suggest buying a home. I bought a home that needed some work and it has been my free time filler through the years. Putting the last final touches on right now and it will be going up for sale in a few weeks.

I should stand to make an easy 20K, and more closer or above 30K+...

Im not complaining...