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Housing Question

Discussion in 'Pre-Medical - MD' started by tryingagain, Dec 9, 2002.

  1. tryingagain

    tryingagain Soon to have no life
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    I know that there is a housing section on the forums, but I doubt that it gets visited very often so please don't move this thread.

    Does anyone know how easy it is, or if it is possible, to buy a house while you are in medical school? I am a little worried that it will be hard to get a loan while in school and therefore hard to buy a house. It makes much more sense to me to buy a home and sell it at the end of my 4 years than to throw money away to a landlord for those 4 years.

    Please let me know your input. Thanks!!!
     
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  3. Neuronix

    Neuronix Total nerd
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    There's alot of fees associated with getting a mortgage. It is also somewhat of a gamble with property values. I am a MSTP applicant, so I anticipate buying a home while I'm there because I'm anticipating an 8 year stay. I didn't even apply to certain areas because I knew it would be impossible to buy or even rent at a reasonable cost. But for 4 years, you're probably not going to make anything on your investment (not to mention the hassle it can be), so I would recommend just sticking to renting.
     
  4. DoubleL

    DoubleL Member
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    erm, not making anything on an investment in a house is a LOT different than having that rent money vanish when school is over.

    but i think the OP is right - it will be next to impossible to secure a mortgage while in medical school, because you will have no income and be accruing debt like crazy.

    i'm in a slightly different situation, because i'm married and my wife will have an income. we are planning to buy a house before school starts (wherever we decide to go). if you can handle the down payment and are ready for the hassles of owning a house (leaky roof, mowing the yard, etc.) then i don't see any reason not to be building equity during those four years...

    but that's just my opinion... ;)

    LL
     
  5. tryingagain

    tryingagain Soon to have no life
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    I am in a unique situation because I am currently working. I contacted my bank and they said that they determine your loan status on your current income, not what you may make in the future. With that said I can get a loan now and buy a house.

    I am not looking to make any money by owning a house and selling it for a profit later (although that would be nice). Even if I just bought a house and sold it for what I paid for it all I would have to pay is property tax every year. Besides, by buying a house you are cutting out the middle man (i.e. landlord) and getting much more house for your money.

    What do you guys think? Anyone else ever wanted to buy rather than rent?
     
  6. DoubleL

    DoubleL Member
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    yes, you are doing all those things, and also: building equity for the next house you buy, building credit, and you can deduct the interest on your mortgage from your income (although if you have no income in school that won't really help!).

    i've been renting for four years now, and i added up all the monthly payments i've made so far and i nearly fainted, because that money is just gone forever.

    LL
     
  7. doctorme555

    doctorme555 Member
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    Some of you said that it would not be worth it to own a house for 4 years. Does it make sense not to sell the house when you graduate medical school but instead rent it out after the four years so you can make money on it?
     
  8. MDwillneverbe

    MDwillneverbe Junior Member
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    I think that you haven't taken into account the many repairs that a house requires. Since the only houses you will be able to afford are old ones - the home repair costs will be large - and then you have to be able to spend whole days waiting for repairmen to show up- and then they will have to order the part....
     
  9. samenewme

    samenewme Senior Member
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    The conventional wisdom is that you need to be in a house five years for it to be worth it to buy. The reasons are:


    Real estate commissions

    Loan origination fees

    Other closing costs

    Amortization--remember that when you start a mortgage, the bulk of the monthly payment goes to interest, NOT principle. So you're still throwing money away, only it goes to the bank instead of the landlord. You can deduct this interest on your income tax, but you're probably not going to have much income anyway, right?

    The uncertainties of the real estate market. Picture yourself in four years having to sell your house. What if there's been a bubble burst and your house hasn't appreciated (or, worse, is worth less than the loan balance)? What if it takes you a year to sell it? What if you have to pay the buyer's closing costs to unload your house?

    Just remember that you can't compare mortages, taxes and insurance one-to-one with rent to figure out how much money you're throwing away.
     
  10. Mutterkuchen

    Mutterkuchen Senior Member
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    First of all, I would take take most everything here with a grain of salt. Most of the posters here are in no position to buy a house, and cannot offer reliable information.

    I am in the same situation as you, except that I am married, therefore my wife's income will be used as an income source. From my point of view there are pros and cons to buying a house in med school.

    Pros
    -The house should appreciate in value during that time, and you should be able to sell it for a profit
    -There are tax benefits, as the interest is deductable. However, as one poster mentioned, you need income to have deductions from you income tax. Therefore this will only be relevant if you have other income or a spouse.
    -You get to live in and control the house that you own. This is the biggest reason that I want to buy a house. I am sick of landlords, crappy repair jobs, and not being able to do what I want with the place. Plus I want a dog.

    Cons
    -You house may not appreciate in value. As a previous poster mentioned, most real estate pundants suggest staying somewhere 5 years before selling.
    -You are responsible for repairs
    -You must be able to pay the mortgage, insurance, and taxes

    In St. Louis there are many duplexes which one could buy. You could live in one-half and rent the other. The rental income will pay for most of the mortgage payment.

    I think that the key is to investigate the situation carefully, and make sure you buy in a location where home values are consistently rising. It is not true that you will only be able to buy a old house. There are many areas where a newer house is as affordable or even more affordable than an old house. In general I think that buying is a good idea, but it is important to do your homework to find what is best for your situation.
     
  11. tryingagain

    tryingagain Soon to have no life
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    It does seem like it is easier and safer to rent a house/apartment. I would agree that if you rent a house you have to rent an old crappy one. The landlord has to make money. However, there are a lot of nice small, new homes out there which are very affordable, but you have to buy them. Its a tough decision.

    Anyone else have an opinion? Has anyone done this or know someone who has?
     
  12. CU_buffalo

    CU_buffalo Member
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    Buying a house seems like the best way to go. My friend who went to school in Baltimore bought himself house during med school, and he saved like 50k in rent money over 4 years. Well, actually, his rich parents bought him a house. For those of you who can't afford a house, or don't have rich parents, maybe you can have your parents get a loan for a house and you can live in it and pay the mortgage for your parents. I haven't investigated whether this is allowable or not, but it seems alright, and the responsibility of getting a loan from the bank would be your parents and not your own.
     

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