House

[Oogilily]

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Gotta question for all you optometry students out there. Is it possible to buy a house on a student loan? I mean, I guess just pay the mortgage, utitlities and stuff like that on a loan. I really would like to get into a house instead of throwing money away into rent. Is this possible?

 

[cpw]

Unless you're married to someone with earning potential... your chances of securing a mortgage in this housing market are minimal. No income = bad bank investment. (and no student loans don't count as income)

 

[docwatson]

Unless you're married to someone with earning potential... your chances of securing a mortgage in this housing market are minimal. No income = bad bank investment. (and no student loans don't count as income)

cpw is right. The bank won't lend money unless you already have the assets to back it up. Basically, you already have to have the money so to speak. The only way your plan will work is if someone else buys that house for you.

But after you graduate, that's a different story. As long as you have maintained a spotless credit report and have a good steady job, you can buy whatever you want, including a practice. Keep that in mind if you want to pursue your dream. 😎

 

[Oogilily]

Ok, I am married and she does have a good job that she may continue to work after I start school. With that earning potential, we could get approved for a mortgage (we don't need a big sum of money). So if we could get approved for a mortgage, would student loans, in this case, provide money to help pay for the house if needed?

 

[BKK]

If you can qualify for a mortgage based on your wife's income, why would you need to use the student loans for the house? If you don't qualify on her income, you don't need a house. The less student loans that you take out to pay for school, the less that you have to pay back. That is an odd concept. Since you do have a full-time employed spouse, try to take out as few loan as possible to pay for school and then not have not to worry about the huge debt load later. If you have enough to make a decent down payment on a house, that would be a good nest egg to avoid student loans. Not having a $1000 to 2000 monthly payment would turn into a very easy way to save up for a house when you are done with school and know where you will begin to practice.

From someone that would have liked to know then what I do now about loans....

BK

 

[Oogilily]

Well, the only thing is, is that she probably won't work the whole 4 years I'm at school. When we have kids, she'll stop working and we could no longer pay the mortgage. Therefore, I would need to put it on a loan. If I rent, I also have to put it on a loan and stand no chance of making any of that money back. Same thing, maybe just a little cheaper renting. If I get a house, (nothing over $1000/month, I don't need a huge home) then I would have to pay for it with loans when my wife stops working. When I sell the house, then I can pay back that portion of the student loan. I understand that interest and taxes factor in, but after paying the mortgage off after selling the house, I can at least pay most of that part of the student loan off that I used to pay for housing. Of course it all rides on selling the house, but a little research will help me with that. That way I don't have to put 4 years of renting on my loan. It's really not an odd concept....

 

[docwatson]

Well, the only thing is, is that she probably won't work the whole 4 years I'm at school. When we have kids, she'll stop working and we could no longer pay the mortgage. Therefore, I would need to put it on a loan. If I rent, I also have to put it on a loan and stand no chance of making any of that money back. Same thing, maybe just a little cheaper renting. If I get a house, (nothing over $1000/month, I don't need a huge home) then I would have to pay for it with loans when my wife stops working. When I sell the house, then I can pay back that portion of the student loan. I understand that interest and taxes factor in, but after paying the mortgage off after selling the house, I can at least pay most of that part of the student loan off that I used to pay for housing. Of course it all rides on selling the house, but a little research will help me with that. That way I don't have to put 4 years of renting on my loan. It's really not an odd concept....

Tell that to the bank... 😉

I forget what the formula is but you have to be able to service your debt on the income you have. I think you need to have at least twice the income. That's all you need to be thinking about.

 

[blueeyedOD]

Isn't it a little scary having a house and kids and no income?

 

[Oogilily]

Probably. I was just curious if that was even possible. Just trying to think of ways to lessen my debt. I didn't know if it was possible. Made sense in my head (and I have talked to people currently doing this). But, at $650 a month for rent, which is a pretty good price for a 2 bedroom apartment, adds up to $31,200 over four years. Seemed like a good chunk of my loan. So I was trying to think of ways to get over it. I have even heard of people taking out the maximum loan that they could and took any extra they had and invested it and ended up paying their school debt a lot faster because of the invested money. Sounds too risky for me, but I think there are ways to get out of debt besides the usual pay-it-off-over-the-next-40-years-of-my-life plan. But, thanks for your responses, they really do help.

 

[cpw]

Well, the only thing is, is that she probably won't work the whole 4 years I'm at school. When we have kids, she'll stop working and we could no longer pay the mortgage. Therefore, I would need to put it on a loan. If I rent, I also have to put it on a loan and stand no chance of making any of that money back. Same thing, maybe just a little cheaper renting. If I get a house, (nothing over $1000/month, I don't need a huge home) then I would have to pay for it with loans when my wife stops working. When I sell the house, then I can pay back that portion of the student loan. I understand that interest and taxes factor in, but after paying the mortgage off after selling the house, I can at least pay most of that part of the student loan off that I used to pay for housing. Of course it all rides on selling the house, but a little research will help me with that. That way I don't have to put 4 years of renting on my loan. It's really not an odd concept....

it's not odd, but if the bank heard you say it you'd get a boot in the butt as the door slammed behind you on your way out.