Buying a house in medical school

[birdman1269]

This may be a stupid question, but is it possible to buy a house with medical school loans or Grad PLUS loans? My situation is rather unique (this will surely raise eyebrows, but I raise birds as part of a conservation program) and it requires me to live in a house rather than an apartment. In the area where I'm going to school it is significantly cheaper to buy a manufactured home and pay for utilities etc. than it is to pay five years of rent for a house (even some apartments are very expensive to rent). I would probably live in this hypothetical house throughout medical school and perhaps residency as well. In my mind the good thing about this option, if it were possible, is that the house and property could be sold after medical school or residency, wheras $120,000-$216,000 of rent cannot be recovered. I appreciate your input.

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[GreenDuck12]

Are you talking about an all cash transaction or taking out a mortgage?

 

[ciestar]

Idk how’d you get approved for a mortgage with no income

 

[GreenDuck12]

You definitely wouldn't get approved for a mortgage without a source of income and a downpayment. Generally speaking, you need to have some period of time working in your field (I think two years) or otherwise have to have been at your current job for two years. Even if you were able to get around this part, no part of your downpayment could be from loans. You have to sign financial disclosure documents stating that no part of your downpayment is in the form of a loan.

 

[DrOngoGablogian]

Just to add another experiential data point—I was unable to get a mortgage because of not having income, with enough liquid currently in the bank to cover the entire length of the mortgage. I couldn’t believe it, because it seems to me like already having the money should trump a small chunk of it coming in every 2 weeks, but I guess the underwriting sees otherwise. I think you will likely have a similar experience trying to use loan money for that purpose.

 

[proudofmykids]

Just to add another experiential data point—I was unable to get a mortgage because of not having income, with enough liquid currently in the bank to cover the entire length of the mortgage. I couldn’t believe it, because it seems to me like already having the money should trump a small chunk of it coming in every 2 weeks, but I guess the underwriting sees otherwise. I think you will likely have a similar experience trying to use loan money for that purpose.

Correct. Only one exception to getting a mortgage without an income,pwhi h is being 62.5 years or older, and retired.

 

[libertyyne]

This may be a stupid question, but is it possible to buy a house with medical school loans or Grad PLUS loans? My situation is rather unique (this will surely raise eyebrows, but I raise birds as part of a conservation program) and it requires me to live in a house rather than an apartment. In the area where I'm going to school it is significantly cheaper to buy a manufactured home and pay for utilities etc. than it is to pay five years of rent for a house (even some apartments are very expensive to rent). I would probably live in this hypothetical house throughout medical school and perhaps residency as well. In my mind the good thing about this option, if it were possible, is that the house and property could be sold after medical school or residency, wheras $120,000-$216,000 of rent cannot be recovered. I appreciate your input.

Wait, you want to buy a trailer in a trailer park ?

If you can qualify for a loan before starting medical school and close the transaction before the start of school it should be fine. But that would require 5 years of work history and a down payment.

It might be easier for you to find a rental that allows for pets.

 

[birdman1269]

libertyyne and GreenDuck12: I definitely have 5 years of work history--worked in high school and was self-supporting in undergraduate :'|. Next year I am starting a one year pre-medical post-baccalaureate program before medical school the year after, so the Grad PLUS loan application would be where I'd make the home loan request. I assume if I was approved for the loan it would be an all-cash transaction. Thanks for your opinions.

 

[Dave1980]

five years of rent. $120,000-$216,000 of rent cannot be recovered.

Assuming 4 years your numbers equal 2500-4500 per month. Rent is not that expensive, even for a house

 

[GreenDuck12]

so the Grad PLUS loan application would be where I'd make the home loan request. I assume if I was approved for the loan it would be an all-cash transaction.

This doesn’t quite make sense - if it’s an all cash transaction, why would you need the grad plus loan for the purchase of a house?

 

[birdman1269]

Assuming 4 years your numbers equal 2500-4500 per month. Rent is not that expensive, even for a house

In Los Angeles it is expensive, average 2000/month. For nine years (one year of post-bacc, four years of medical school and four years of residency) that is $216,000.

 

[birdman1269]

This doesn’t quite make sense - if it’s an all cash transaction, why would you need the grad plus loan for the purchase of a house?

Sorry, I must not be understanding correctly... did not have the parents to teach me about these things... I guess it would not qualify as an all-cash transaction, rather, the payment would have to be primarily made with Grad PLUS loans.

 

[GreenDuck12]

In Los Angeles it is expensive, average 2000/month. For nine years (one year of post-bacc, four years of medical school and four years of residency) that is $216,000.

How confident are you in being able to stay at that location for medical school and residency? Admissions is pretty unpredictable...

 

[GreenDuck12]

Sorry, I must not be understanding correctly... did not have the parents to teach me about these things... I guess it would not qualify as an all-cash transaction, rather, the payment would have to be primarily made with Grad PLUS loans.

Grad plus loans, any federal student loan, cannot be used in that way.

 

[birdman1269]

Grad plus loans, any federal student loan, cannot be used in that way.

Pretty confident. Is there any loan that can be used that way?

 

[Dave1980]

In Los Angeles it is expensive, average 2000/month. For nine years (one year of post-bacc, four years of medical school and four years of residency) that is $216,000.

Staying in the same location for post-bacc through residency is not realistic. Sorry.

 

[GreenDuck12]

Pretty confident. Is there any loan that can be used that way?

To buy a home? Yes, it’s called a mortgage, which is contingent upon having stable full time employment and a debt to income ratio below 36% (higher is possible as well). You also need to have some portion of a down payment, 20% is standard but less is doable with PMI.

Federal student loans are granted to cover up to the estimated cost of attendance as determined by your school. They are not sufficient to purchase a home. That being said, you can use loans to pay your monthly mortgage payment, which would be similar to paying rent.

Where have you been getting your information from?

 

[birdman1269]

To buy a home? Yes, it’s called a mortgage, which is contingent upon having stable full time employment and a debt to income ratio below 36% (higher is possible as well). You also need to have some portion of a down payment, 20% is standard but less is doable with PMI.

Federal student loans are granted to cover up to the estimated cost of attendance as determined by your school. They are not sufficient to purchase a home. That being said, you can use loans to pay your monthly mortgage payment, which would be similar to paying rent.

Where have you been getting your information from?

Ok. Considering there is no way I can work full time while in medical school, I'm probably going to have to rent, even if it is going to be more expensive in the long run. Even if monthly rent is quite expensive (from my Zillow research, average 2K/month in the area where I'm doing post-bacc) is this something that graduate school/medical school loans could cover? Thanks for your help

 

[g3tb0mbed]

Do you have a parent/family member that can co-sign the loan?

 

[GreenDuck12]

Ok. Considering there is no way I can work full time while in medical school, I'm probably going to have to rent, even if it is going to be more expensive in the long run. Even if monthly rent is quite expensive (from my Zillow research, average 2K/month in the area where I'm doing post-bacc) is this something that graduate school/medical school loans could cover? Thanks for your help

It depends on how your school estimates your cost of attendance. Cost of attendance covers tuition fees materials and living expenses. Depending on how your school calculates living expenses it may be quite easy to afford a single apartment or it might be difficult without roommates. My school for example has a very generous cost of attendance estimation which would enable someone to rent an apartment without roommates quite easily.

For the grad plus loan you do not need a cosigner and less you have a high student loan balance already.

 

[DrOngoGablogian]

Wait, you want to buy a trailer in a trailer park ?

If you can qualify for a loan before starting medical school and close the transaction before the start of school it should be fine. But that would require 5 years of work history and a down payment.

It might be easier for you to find a rental that allows for pets.

Watch out for that old drunk Lahey.

OP, just tell your landlord you love watching Birds TV on your roku at full blast volume.

 

[GreenDuck12]

Watch out for that old drunk Lahey.

OP, just tell your landlord you love watching Birds TV on your roku at full blast volume.

Yeah, wouldn’t recommend that. Violating terms of a lease, especially with animals that aren’t permitted, are really easy cases for landlords to win in court for significant damages. OP would stand to lose much more than their security deposit.

Unfortubately for the OP, particularly in buildings such as apartments and condominiums, animal restrictions are much more stringent and harder to evade - and you can be sure they have the resources to pursue damages. Best bet is to find a house that’s been converted to a duplex or triplex that allows exotic pets.

 

[AnonymousDoctorGuyPerson]

Ok. Considering there is no way I can work full time while in medical school, I'm probably going to have to rent, even if it is going to be more expensive in the long run. Even if monthly rent is quite expensive (from my Zillow research, average 2K/month in the area where I'm doing post-bacc) is this something that graduate school/medical school loans could cover? Thanks for your help

You can surely pay less than 2000/mo by living a commutable distance / having roommates. Guaranteed.

 

[DrOngoGablogian]

Yeah, wouldn’t recommend that. Violating terms of a lease, especially with animals that aren’t permitted, are really easy cases for landlords to win in court for significant damages. OP would stand to lose much more than their security deposit.

Unfortubately for the OP, particularly in buildings such as apartments and condominiums, animal restrictions are much more stringent and harder to evade - and you can be sure they have the resources to pursue damages. Best bet is to find a house that’s been converted to a duplex or triplex that allows exotic pets.

True. OP, get an ESA note. A flock of birds for therapeutic purposes sounds legit.

 

[proudofmykids]

Sorry, I must not be understanding correctly... did not have the parents to teach me about these things... I guess it would not qualify as an all-cash transaction, rather, the payment would have to be primarily made with Grad PLUS loans.

You would need to qualify for the mortgage, property taxes and home insurance based on your work history, current income, and credit score! You cannot use a loan to pay another loan, hence your current income must qualify you. However, once the loan is received, you can do what you want. And yes, full Cost of Attendance includes housing, so Fed Direct and Grad Plus can be used to pay any housing. Again, you mist qualify for the loan beforehand, and the amount of living expense that you are allowed to borrow is determined by the schools total COA.