Getting a mortgage as a new attending

[sloop]

I am currently in a fellowship which will end in June. I'm in a kind of interesting situation and am hoping to move back to where I grew up and buy my childhood home.

Without getting into the entire long story, the home I grew up in has been in the family for two generations now (I would be the third). My mom died a couple years ago, and long story short everything went through probate and I now own one-sixth of the house. My sibling also owns one-sixth, and my dad owns the remaining two-thirds. Everyone wants the house to stay in the family, and I would like to buy the remainder of the house off of them. It would be my primary residence.

This would be my first time buying a house, as I have always rented before this. I have a few questions, but mainly am wondering what people's experiences have been qualifying for a mortgage right out of training. How does income verification work in that situation? Obviously, my attending income will be significantly more than my income as a fellow. Will they approve a mortgage based on a signed contract, or are they going to require me to have paystubs before they will approve me? I'm also wondering if I will likely be able to go with a conventional lender or if I will have to pursue some sort of doctor's loan situation.

In case it's relevant, house is currently in the process of being appraised, but probably ~800K (expensive area, unfortunately). Again, I have one-sixth equity in the house. Jobs have quoted salaries in the 230-240K range. I'm only looking at jobs qualifying for PSLF as I will already have 5 years, so I will be on REPAYE until I get forgiveness. This would result in a student loan payment of about 1700/mo.

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[Mman]

I am currently in a fellowship which will end in June. I'm in a kind of interesting situation and am hoping to move back to where I grew up and buy my childhood home.

Without getting into the entire long story, the home I grew up in has been in the family for two generations now (I would be the third). My mom died a couple years ago, and long story short everything went through probate and I now own one-sixth of the house. My sibling also owns one-sixth, and my dad owns the remaining two-thirds. Everyone wants the house to stay in the family, and I would like to buy the remainder of the house off of them. It would be my primary residence.

This would be my first time buying a house, as I have always rented before this. I have a few questions, but mainly am wondering what people's experiences have been qualifying for a mortgage right out of training. How does income verification work in that situation? Obviously, my attending income will be significantly more than my income as a fellow. Will they approve a mortgage based on a signed contract, or are they going to require me to have paystubs before they will approve me? I'm also wondering if I will likely be able to go with a conventional lender or if I will have to pursue some sort of doctor's loan situation.

In case it's relevant, house is currently in the process of being appraised, but probably ~800K (expensive area, unfortunately). Again, I have one-sixth equity in the house. Jobs have quoted salaries in the 230-240K range. I'm only looking at jobs qualifying for PSLF as I will already have 5 years, so I will be on REPAYE until I get forgiveness. This would result in a student loan payment of about 1700/mo.

talk to various banks, signed contract will often be enough depending on the details

 

[FutureInternist]

There are “Doctor’s loans” which require 5% down (as opposed to usual 20%), since banks know you are good for it, so that is usually a better way to go, unless you have a bunch of cash lying around.

Signed contract or a letter from HR should be sufficient.

Do you have med school loans?
May want to think a bit more before buying an 800K house right away… I can see that its a “family house”, but just cos others want it to stay in the family, shouldn’t obligate you to make such a gigantic purchase fresh out.

The White Coat investor is a good book/website to read/visit.

The “hierarchy” is sometimes as below -

Short term disability
Long term disability
Life insurance
Med school loans
401K
NQDC
Mortgage
HSA
Roth IRA
529 - if planning for kids

If you end up with a huge mortgage payment that will impact your ability to save for retirement and unless you plan on selling house later (unlikely since “family home”), you will have trouble catching up even if income increases later in career

 

[sloop]

Since you have no credit history now, there may be some difficulty in getting a loan. But it's significant that you own a part by inheritance, and I`d discuss this point together with a lawyer. If the house is registered, including in your name, then it should be solved only with a lawyer. There`s no other way I can also assume while buying the property there may be some clauses in the contract and documents that you can`t pay attention to. Buying real estate is actually a complicated process. Earlier I read an article on Bargain Properties to be found in the Algarve which explains the various slippery points. You may find something useful here.

FYI I purchased the home. Home appraisal price was more than I initially anticipated ~$1M. My salary is also higher than anticipated though at ~$270K (long story). I actually did have significant credit history and my credit score was/is about 790. Got an interest rate of 4.8% Both my dad and I had to get a lawyer, but the process was fairly simple overall and the fees were reasonable.

There are “Doctor’s loans” which require 5% down (as opposed to usual 20%), since banks know you are good for it, so that is usually a better way to go, unless you have a bunch of cash lying around.

Signed contract or a letter from HR should be sufficient.

Do you have med school loans?
May want to think a bit more before buying an 800K house right away… I can see that its a “family house”, but just cos others want it to stay in the family, shouldn’t obligate you to make such a gigantic purchase fresh out.

The White Coat investor is a good book/website to read/visit.

The “hierarchy” is sometimes as below -

Short term disability
Long term disability
Life insurance
Med school loans
401K
NQDC
Mortgage
HSA
Roth IRA
529 - if planning for kids

If you end up with a huge mortgage payment that will impact your ability to save for retirement and unless you plan on selling house later (unlikely since “family home”), you will have trouble catching up even if income increases later in career

I have med school loans but am on an income-driven plan and am currently five and a half years into PSLF. I have a government job that I love which has a pension. Assuming I retire at 63, I would get 61% of my final average earnings. This alone would likely be enough to live on given that I will have paid off my mortgage. I will also be contributing to a 457 plan to supplement. Wife and I are not having kids.

Also, median home price in my county is over $700K. Yes, if I had not bought the family home I could have purchased a somewhat less expensive home, but realistically not that much less if we’re intending to live in a reasonably good area. For what it’s worth, my dad has been looking at houses and, around here, $400-500K gets you a 2 bedroom house that needs significant work and is either in a quite sketchy neighborhood or right on the border of a sketchy neighborhood.

 

[Dbric36]

Finance it through your family.
.

 

[FutureInternist]

FYI I purchased the home. Home appraisal price was more than I initially anticipated ~$1M. My salary is also higher than anticipated though at ~$270K (long story). I actually did have significant credit history and my credit score was/is about 790. Got an interest rate of 4.8% Both my dad and I had to get a lawyer, but the process was fairly simple overall and the fees were reasonable.


I have med school loans but am on an income-driven plan and am currently five and a half years into PSLF. I have a government job that I love which has a pension. Assuming I retire at 63, I would get 61% of my final average earnings. This alone would likely be enough to live on given that I will have paid off my mortgage. I will also be contributing to a 457 plan to supplement. Wife and I are not having kids.

Also, median home price in my county is over $700K. Yes, if I had not bought the family home I could have purchased a somewhat less expensive home, but realistically not that much less if we’re intending to live in a reasonably good area. For what it’s worth, my dad has been looking at houses and, around here, $400-500K gets you a 2 bedroom house that needs significant work and is either in a quite sketchy neighborhood or right on the border of a sketchy neighborhood.

Sorry… didn’t realise it was an old post.

Do try to follow the hierarchy for retirements savings though.

Good Luck