Dentists, IS IT WISE TO BUY A HOUSE RIGHT AFTER YOU GRADUATE?

[ucla2134]

Hi!
I know it is too soon to ask this, but saw my old parents are still living in rented house and i do not like it. I would like them to live in my own house with me.
I was wondering is it financial possible for the new dentist to buy house within your first year of practice?
Thanks

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[solstice]

Hi!
I know it is too soon to ask this, but saw my old parents are still living in rented house and i do not like it. I would like them to live in my own house with me.
I was wondering is it financial possible for the new dentist to buy house within your first year of practice?
Thanks

I know someone who did it. I Guess it depends on how much debt you have graduating and you have to show that you are making about 3 times more than what your mortgage will be after paying student loans and etc.

 

[HupHolland]

Possible? Yes. Wise? No.

 

[solstice]

Possible? Yes. Smart? No.

Why would not it be Smart? I do not know where the op intents to live. San Fran, maybe? But in some cities the renter's market is much higher than owner's market. You pay a bit more for a 3BD house than you pay for 1-2 bedroom(s) apartment, including all the fees and I'd assume that the OP's parents maybe contributing to the mortgage as well (instead of paying rent and trow away their money) AND he will build equity.

 

[ucla2134]

Why would not it be Smart? I do not know where the op intents to live. San Fran, maybe? But in some cities the renter's market is much higher than owner's market. You pay a bit more for a 3BD house than you pay for 1-2 bedroom(s) apartment, including all the fees and I'd assume that the OP's parents maybe contributing to the mortgage as well (instead of paying rent and trow away their money) AND he will build equity.

I definitely will not buying a house in San Francisco, or LA. I know how expensive it is. Maybe in Orange County like Irvine??

 

[charlestweed]

I definitely will not buying a house in San Francisco, or LA. I know how expensive it is. Maybe in Orange County like Irvine??

Houses in Irvine are not cheap. Average home price is about $600k. A decent looking one (ie 2200-2500sf 2 story home) is close to $1 mil....if you put down 20%, your payment would be about $5000/month

 

[ucla2134]

Houses in Irvine are not cheap. Average home price is about $600k. A decent looking one (ie 2200-2500sf 2 story home) is close to $1 mil....if you put down 20%, your payment would be about $5000/month

thanks for responding, assume that i will work 6 days a week, 9-10 hours a day. Do you think i can manage with $5000/month?

 

[briansle]

now is the time to buy. Nobody is buying anything right now, so you're likely to find a great bargain. Work with your parents and buy one.

 

[omaralt]

i purchased a home 3 months after beginning to work. i bought a new home (3213 sq feet) with everything (all appliances, blinds, etc) and all closing costs paid for $236K (i'm in FL). i also qualify for the $8K tax credit (thanks obama 🙂), which was the final straw for me. the loan i took was the FHA loan, so only 3.5% down. so my total cost to close on the home was only $8,500, $8,000 of which i will get back via the tax break. so in reality it will only cost me $500 to move in and my monthly payments are only $500 more than then rent for my 1000 sq foot apt. also, as an incentive, the builder bought down the interest rate, so my rate for a 30 yr fixed is only 4.375%. so in this case it made perfect sense for me to buy and i have no difficulty paying the mortgage. i would just advise you to make sure you want to stay where you are before you purchase a home, as selling it may be difficult in the near future. i've already purchased a practice, so i know i'm staying. good luck

 

[DrReo]

Where in the ball park were your student loans?

i purchased a home 3 months after beginning to work. i bought a new home (3213 sq feet) with everything (all appliances, blinds, etc) and all closing costs paid for $236K (i'm in FL). i also qualify for the $8K tax credit (thanks obama 🙂), which was the final straw for me. the loan i took was the FHA loan, so only 3.5% down. so my total cost to close on the home was only $8,500, $8,000 of which i will get back via the tax break. so in reality it will only cost me $500 to move in and my monthly payments are only $500 more than then rent for my 1000 sq foot apt. also, as an incentive, the builder bought down the interest rate, so my rate for a 30 yr fixed is only 4.375%. so in this case it made perfect sense for me to buy and i have no difficulty paying the mortgage. i would just advise you to make sure you want to stay where you are before you purchase a home, as selling it may be difficult in the near future. i've already purchased a practice, so i know i'm staying. good luck

 

[Cold Front]

I am looking for a place to buy in Northern Virginia, and it ain't cheap. I think I will wait until my 2nd year out. Until then, I will work on having a killer fico credit score, and have good deposit ready for the purchase.

 

[omaralt]

Where in the ball park were your student loans?

i was able to get some private loans from parents/relatives, so outstanding student debt to access group is roughly 120K. the other private loans to my parents/relatives is about $275K (this includes the money to buy the practice). had i had ~$400K in debt to banks i doubt i would have gotten the loan without a co-signer

 

[charlestweed]

Wrong quote

 

[charlestweed]

thanks for responding, assume that i will work 6 days a week, 9-10 hours a day. Do you think i can manage with $5000/month?

Sure, you can work 6 days/week but right now a lot new grad dentists in CA have problem finding full time jobs. Last week, I met this associate GP at Newport Dental. She and her husband are both dentists and they have practiced dentistry since 2003. They are selling their $1.2 million Irvine home at a loss because they are struggling to make the mortgage payment.

My sister also graduated from UCSF. Ten years ago, her student loans were only $80k. Her husband is a physician but his salary is slightly less than hers. It took them 8 years to save enough money to buy a nice $800k house in Yorba Linda.

 

[anschutz1913]

thanks for responding, assume that i will work 6 days a week, 9-10 hours a day. Do you think i can manage with $5000/month?

as mentioned below, finding jobs that will allow you this work schedule will be one thing, but the physical demand and stress of such a rigorous work week seems a little tough....can you say burnout...

 

[DrReo]

I am looking for a place to buy in Northern Virginia, and it ain't cheap. I think I will wait until my 2nd year out. Until then, I will work on having a killer fico credit score, and have good deposit ready for the purchase.

Did you end up going with that associateship?

Can you buy in after?

 

[Thaxil]

Obtaining a mortgage is considered good debt, just as student loan debt is. If you can get a mortgage in this environment, then you are likely qualified and able to pay. The major challenge is obtaining a mortgage with little work history and little down. I bought a 2500sqf home for 210K 15y mortgage and 20% down 6 months after I was license to work. Mortgage payment is 1400/month a I have been paying 2x that amount. Hopefully pay it off in 5-6 years. I have not regretted my decision, and it is a good time to buy. There is no rush to buy, it will be a good time to buy 2 years from now.

 

[DrReo]

Obtaining a mortgage is considered good debt, just as student loan debt is. If you can get a mortgage in this environment, then you are likely qualified and able to pay. The major challenge is obtaining a mortgage with little work history and little down. I bought a 2500sqf home for 210K 15y mortgage and 20% down 6 months after I was license to work. Mortgage payment is 1400/month a I have been paying 2x that amount. Hopefully pay it off in 5-6 years. I have not regretted my decision, and it is a good time to buy. There is no rush to buy, it will be a good time to buy 2 years from now.

Purchasing your home wasn't affected by student or practice loans?

Did you feel pressured to produce after you purchased the house?

 

[kato999]

One thing that is also important to note is that your interest portion of your mortgage is tax deductible. If you are making over 150K there is a pretty good benefit to having that deduction.

It entirely depends on the area, but right now if you can afford it and you know you are going to be there for at least 5 years, I would buy.

 

[Daurang]

Last week, I met this associate GP at Newport Dental. She and her husband are both dentists and they have practiced dentistry since 2003. They are selling their $1.2 million Irvine home at a loss because they are struggling to make the mortgage payment.

There's got to be more to the story. $1.2M mortgage is only $6500 per month which is easily manageable for the two of them. Cali is a non-recourse state so you're allowed to dump your primary home and the bank cannot go after your other assets. My guess is their home is now only worth $850K so it's worth dumping it. There are 7-10 million other toxic assets waiting on the sideline they can buy for cheap with cash from their safebox. I'd tell them to stop paying their mortgage and dare the bank to foreclose and take the house back. The bank won't and they'll get to live there free for a year.

 

[DrJeff]

One thing that is also important to note is that your interest portion of your mortgage is tax deductible. If you are making over 150K there is a pretty good benefit to having that deduction.

It entirely depends on the area, but right now if you can afford it and you know you are going to be there for at least 5 years, I would buy.

Bingo! Especially if your in a 2 income family where one of those incomes is a dentist, you very often, and quickly I might add, will make too much $$ for the interest on your student loans to be tax deductable anymore 😱 so you loose that tax benefit. Fortunately, however, your home mortage interest isn't susceptable to the income restrictions that your loan interest deductability is (not yet atleast), so that can help come tax time. Additionally, you'll just start building the equity in your house, and also more than likely improving your credit history at the same time, bot of which aren't bad things.

In this housing market, if you're pretty sure that you're going to be in that area for more than 3 years (maybe not that exact practice, but atleast that area), it's quite likely a good investment to purchase a "reasonable" house when you can

 

[Thaxil]

Purchasing your home wasn't affected by student or practice loans?

Did you feel pressured to produce after you purchased the house?

I like to think that I can seperate patient needs from my wants/needs. It is a gray area at times, but I have been getting more and more confortable with my recommendations. Anyways, the mortgage was only $450/more more then I was paying for rent at the time. I live well within my means.