Could I get a mortgage with student loans?

[sustentacular]

Does anyone have experience with this? I have a job now, and will up untill I start school, but would I potentially be denied a mortgage if the lender knows I'll be starting school and paying with borrowed money?

I don't plan on buying something that would cost more per month than what was allowed by fafsa for housing expenses.

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[Holderlin]

Does anyone have experience with this? I have a job now, and will up untill I start school, but would I potentially be denied a mortgage if the lender knows I'll be starting school and paying with borrowed money?

I don't plan on buying something that would cost more per month than what was allowed by fafsa for housing expenses.

Yeah I need to know this too cause I'll be in the same situation. I pwn a house now and with a wife, two dogs, and a newborn baby, so I don't think I'll be able to go back to renting.

I've heard of many people buying houses while in med school so it must work somehow, unless all these people are just throwing down mad scrilla. But common sense says there's no way in hell a bank would go for this, especially considering the market.

 

[jadealer]

Does anyone have experience with this? I have a job now, and will up untill I start school, but would I potentially be denied a mortgage if the lender knows I'll be starting school and paying with borrowed money?

I don't plan on buying something that would cost more per month than what was allowed by fafsa for housing expenses.

I talked to a bank about this already. The key is to get your loan while you ARE working. So you want to get your loan and close on the house you're buying PRIOR to quitting your job. Also don't tell them your future plans about NOT working. After the closing, the bank doesn't care where the money is coming from only that the mortgage is being paid on time.

Now if you fall behind in your payments, you will probably be in trouble but there is no reason for that when you're paying them with student loans.

 

[Holderlin]

I talked to a bank about this already. The key is to get your loan while you ARE working. So you want to get your loan and close on the house you're buying PRIOR to quitting your job. Also don't tell them your future plans about NOT working. After the closing, the bank doesn't care where the money is coming from only that the mortgage is being paid on time.

Now if you fall behind in your payments, you will probably be in trouble but there is no reason for that when you're paying them with student loans.

I thought of this too, but banks are smarter than this, are they not?

We'd be buy a property in a different location than where we work, while simultaneously selling our current property. What, do you just lie and say that you're on the road a lot and work from home? I guess that would work fine.....okay, yeah maybe you can pull this off pretty easily.

Felling better about it now...

 

[drimpossible]

I would recommend reading this thread http://forums.studentdoctor.net/showthread.php?t=777200 before you decide to purchase during medical school. My friend is applying to residency now and his purchased property is becoming a real hindrance in the process. Even if you qualify for a mortgage, you might not want to deal with being an absentee landlord (living 1000 miles away) during your internship year. I understand the desire to own property, but renting makes a lot of sense during medical school.

 

[jadealer]

I would recommend reading this thread http://forums.studentdoctor.net/showthread.php?t=777200 before you decide to purchase during medical school. My friend is applying to residency now and his purchased property is becoming a real hindrance in the process. Even if you qualify for a mortgage, you might not want to deal with being an absentee landlord (living 1000 miles away) during your internship year. I understand the desire to own property, but renting makes a lot of sense during medical school.

I think it really depends on where you live. Also, if your friend started medical school in 2006.. that is why it sucks so bad right now. He bought a house at the height of the housing bubble when they were worth a lot more than they are now. So obviously since the housing market crash, its a lot harder to get back your purchase price. The only reason I am considering buying a home is because I have several pets and the area where I am moving the housing market has dropped significantly in the area so housing prices and very very low. I highly doubt the market will go too much more down the toilet than it already is. The recession can't last forever but obviously housing prices will probably never be at bloated as they were in the mid-2000s.

ANYONE who bought a house before the bank failures, got screwed because the house lost thousands and thousands of dollars in value basically over night. If you buy a house for a low enough price, right now is the optimal time to buy because hopefully if 4 years the economy will pick back up and you can at least break even or make a small profit. I doubt the housing market is going to keep crashing the way it did... if so then the economy will probably never recover.

 

[Holderlin]

I think it really depends on where you live. Also, if your friend started medical school in 2006.. that is why it sucks so bad right now. He bought a house at the height of the housing bubble when they were worth a lot more than they are now. So obviously since the housing market crash, its a lot harder to get back your purchase price. The only reason I am considering buying a home is because I have several pets and the area where I am moving the housing market has dropped significantly in the area so housing prices and very very low. I highly doubt the market will go too much more down the toilet than it already is. The recession can't last forever but obviously housing prices will probably never be at bloated as they were in the mid-2000s.

ANYONE who bought a house before the bank failures, got screwed because the house lost thousands and thousands of dollars in value basically over night. If you buy a house for a low enough price, right now is the optimal time to buy because hopefully if 4 years the economy will pick back up and you can at least break even or make a small profit. I doubt the housing market is going to keep crashing the way it did... if so then the economy will probably never recover.

Yeah you'll be fine buying now, just make sure you find a steal because there are a lot of them out there. You might even make a buck when you sell.

Of course you just have to be on the ball about getting the thing on the market when you need to relocate.

It's the only way to go if you can do it. You have complete control of your environment, a drive way, garage, a yard for pets, more space to layout all your papers and books....good for sanity in general.

 

[QofQuimica]

I would recommend reading this thread http://forums.studentdoctor.net/showthread.php?t=777200 before you decide to purchase during medical school. My friend is applying to residency now and his purchased property is becoming a real hindrance in the process. Even if you qualify for a mortgage, you might not want to deal with being an absentee landlord (living 1000 miles away) during your internship year. I understand the desire to own property, but renting makes a lot of sense during medical school.

I considered buying a condo when I started med school but decided to rent. I will rent during residency as well, since I will be applying for a fellowship (and possibly moving again) in another three years. If I had to do it over, I would make the same decision, and not only because of the housing market crash. There are other issues besides being able to pick up and move cross-country if that's where you match; you have to consider all the little day-to-day concerns as well. When there was water leaking from the ceiling of my bathroom, or when my dishwasher broke down, the extent of my involvement and stress (both time-wise and financially) for dealing with these problems was to pick up the phone and call my landlord. I do no mowing, no repairing, no bug spraying, no anything except live there and try to keep the place fairly clean. Just another perspective to think about for those of you planning to buy, because med school is already stressful enough, and somehow poop always tends to hit the fan when you're on your surgery rotation working 80 hours per week, not when you're on an easy elective.

As for the OP's question, sorry, I have no idea. But this would be a good question to ask at your interviews; when I applied, most schools had a financial aid presentation as part of the interview day.

 

[drimpossible]

Exactly, Q.

Obviously it's a personal decision, but the main reason for not buying during medical school stands true today as it did before the housing market crash: homeownership = more work, and more financial risk, plain and simple. Sometimes a lot of it. Pipes burst during surgery rotation? You deal with it. What about a 15,000 dollar roof replacement? Sometimes the home inspectors miss stuff like that and you're on the hook. Are Grad-Plus loans going to cover that?

A little anecdote: In our last apartment, we had sewer backup from the street that exploded raw sewage out of our toilets and sinks. As homeowners, we would've been literally shoveling feces and missed school/work to coordinate and pay for the fix-it crews. As renters, we simply held our noses as our landlord orchestrated the cleaning crews and plumbers to fix the problem.

The depreciation on my friends home as well as my own isn't really the issue that I'm talking about (and thankfully the depreciation in our neighborhood is pretty minimal). The last thing that many of us want to be dealing with during our internship year/transition year is the prospect of quickly selling our homes or dealing with the responsibilities of a landlord, especially if we match out of our property's area. I understand that the real estate market is attractive right now, but with cheaper home prices and lower interest rates also translates to lower rents in a lot of places.

IMHO as a pet owner, I don't see how pets alone are reason enough to purchase property. It's harder to find rentals as pet owners, but unless you have a team of sled dogs , there are definitely properties out there.

 

[MCAT guy]

Does anyone have experience with this? I have a job now, and will up untill I start school, but would I potentially be denied a mortgage if the lender knows I'll be starting school and paying with borrowed money?

I don't plan on buying something that would cost more per month than what was allowed by fafsa for housing expenses.

You can absolutely get a mortgage. Loans are approved before they begin payment. They will approve them based upon over 2 years employment and assuming that you can do the payments for 3 years after the 1st payment. If you gave them any indication your income would drop in the first 3 years they can absolutely deny you but if you just say you are working there is no underwriter in the country that would deny you. Again, mentioning your income will drop within 3 years is a killer.

So yeah, do it if you want.

 

[MCAT guy]

I talked to a bank about this already. The key is to get your loan while you ARE working. So you want to get your loan and close on the house you're buying PRIOR to quitting your job. Also don't tell them your future plans about NOT working. After the closing, the bank doesn't care where the money is coming from only that the mortgage is being paid on time.

Now if you fall behind in your payments, you will probably be in trouble but there is no reason for that when you're paying them with student loans.

yup.

 

[jadealer]

Exactly, Q.
IMHO as a pet owner, I don't see how pets alone are reason enough to purchase property. It's harder to find rentals as pet owners, but unless you have a team of sled dogs , there are definitely properties out there.

Its hard to find a property that allows large dogs, especially when one is 40 lbs and the other is 70 lbs, along with having two cats and a fenced in yard for the dogs.

 

[drimpossible]

Its hard to find a property that allows large dogs, especially when one is 40 lbs and the other is 70 lbs, along with having two cats and a fenced in yard for the dogs.

I hear you. As an owner of a 55 lb dog (and a cat), finding a rental during med school and/or residency is something I'm not looking forward to.

 

[sustentacular]

I hear you. As an owner of a 55 lb dog (and a cat), finding a rental during med school and/or residency is something I'm not looking forward to.

Thanks for the replies everyone!

I am aware of the risks associated with buying a house right before medical school and the future situations I might encounter. I know this is what I want to do, I'm just trying to figure out if I can do it.

So the general consensus I'm getting is to not let lenders know of my future plans to attend school.

 

[Pons Asinorum]

I think it really depends on where you live. Also, if your friend started medical school in 2006.. that is why it sucks so bad right now. He bought a house at the height of the housing bubble when they were worth a lot more than they are now. So obviously since the housing market crash, its a lot harder to get back your purchase price. The only reason I am considering buying a home is because I have several pets and the area where I am moving the housing market has dropped significantly in the area so housing prices and very very low. I highly doubt the market will go too much more down the toilet than it already is. The recession can't last forever but obviously housing prices will probably never be at bloated as they were in the mid-2000s.

ANYONE who bought a house before the bank failures, got screwed because the house lost thousands and thousands of dollars in value basically over night. If you buy a house for a low enough price, right now is the optimal time to buy because hopefully if 4 years the economy will pick back up and you can at least break even or make a small profit. I doubt the housing market is going to keep crashing the way it did... if so then the economy will probably never recover.

There is a whole lot of market prediction in this that I don't think you can back up with evidence. I would argue that buying a house that you have a great chance of having to sell in four years, at historically-low interest rates that your future buyers will not have access to, may be a source of considerable heart burn. The answer to having difficulty finding a rental that allows large dogs isn't to hang the home-ownership millstone around your neck.

 

[MightyMoose]

I considered buying a condo when I started med school but decided to rent. I will rent during residency as well, since I will be applying for a fellowship (and possibly moving again) in another three years. If I had to do it over, I would make the same decision, and not only because of the housing market crash. There are other issues besides being able to pick up and move cross-country if that's where you match; you have to consider all the little day-to-day concerns as well. When there was water leaking from the ceiling of my bathroom, or when my dishwasher broke down, the extent of my involvement and stress (both time-wise and financially) for dealing with these problems was to pick up the phone and call my landlord. I do no mowing, no repairing, no bug spraying, no anything except live there and try to keep the place fairly clean. Just another perspective to think about for those of you planning to buy, because med school is already stressful enough, and somehow poop always tends to hit the fan when you're on your surgery rotation working 80 hours per week, not when you're on an easy elective.

As for the OP's question, sorry, I have no idea. But this would be a good question to ask at your interviews; when I applied, most schools had a financial aid presentation as part of the interview day.

This is exactly why I'm not buying. I want to have the ability to make a phone call and say, "please make my problem go away."

 

[235750]

I bought a house right before I started med school, and it's been a great asset. In fact, it might be the smartest thing I've done in awhile, although that's not saying much

Previous posts were right, you have to buy it and get approved before you're a student.

I rent to a couple of other students. I don't want to advertise numbers, but let's just say I don't have to take any grad plus loans which saves me tonnes. I have shifted a substantial portion of my debt from students loans into a mortgage. This is absolutely the best part. My mortgage is locked at 4.2%, makes me smile just thinking about it

If the housing market here stays where it's at and doesn't bust, I'll have cut my total debt paid by 1/4. There is risk involved, but so far so good...

I have just redecorated my basement and plan to add a 4th bedroom/3rd bathroom over the christmas break. Renting that out will allow me to get a completely new kitchen, including an oven that doesn't require the use of a cigarette lighter. I have a lot of fun with the house, gives me something to do

If you live in a city that has been somewhat ok in the housing market, this is the way to go. So, philly, NYC are good, and detroit, tucson, etc are bad.

It helps if you have experience in the health field already and know you want to do something non-competitive, like primary care or in my case, psychiatry. Unless I do something really stupid, I should be able to match somewhere within a 30 min drive.

Good luck

EDIT: I forgot to add that I hope to have my mortgage paid off by the time I finish residency in ~7 years. Don't buy a house if you're only going to be there 4 years, that's crazy