How much house can I buy?

[Soup5]

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Fresh out of residency. New job will amount to roughly 250K by year's end (when including bonuses, etc.). Can I buy a home that is 450K with only 5% down? Can attendings afford 3500/mo. straight out of the gates? Don't want to be house-poor. Thanks in advance for the advice.

 

[Frank Rizzo]

rent for a year or two until it becomes more clear what chairman maobama's plan does to your salary... and to see if you like your job.

 

[Consigliere]

Rent or buy a $200k house. What happens if your partners are crooks, your job sucks, your life sucks, your wife leaves you, etc. and you are stuck with a McMansion? Some AMC may swoop in and nab the hospital's contract leaving you high and dry. Get less of a house and upgrade in a year or two. That's what I did anyway and people are always telling me what magnificent insight I have and that I am a genius (at least in the daydreams I have).

 

[Pilot Doc]

Agree with above. Bad idea. Apart from the usual pitfalls of changing jobs you have healthcare reform and a bad economy.

I'd rent.

 

[Jeff05]

i wouldn't buy a house straight out (but, i'm still in fellowship...) - gotta see how your job and healthcare pans out.

must be awesome to be able to buy a nice place for 450. round here (areas around nyc) you gotta have at least 900 to start looking at decent places and salaries aren't that much higher, if at all.

 

[voitokas]

Take your time, pay off your loans, rent or buy something cheap - you'll save in the long run, and then you can buy the house you want in a place you're sure you want to be a little down the road. It's a weird market right now, whatever the realtors tell you (around here anyway)!

 

[countingdays]

$250 sounds like a job in academics or at the VA. In that case, the job is relatively secure and a $450 home should be easily affordible. If it's in private practice, why would you take a private practice job paying a VA wage?

 

[thegasman]

I would rent for 1-2 years to confirm that you are a good fit for the job, and to save a little. And there are still some 100% no pmi doctor loans out there - just a few though. I would definitely NOT "buy something cheap" unless it is something you can stay in for a while. I see way too many people stuck in their homes that they cannot sell.

 

[Trajan]

i wouldn't buy a house straight out (but, i'm still in fellowship...) - gotta see how your job and healthcare pans out.

must be awesome to be able to buy a nice place for 450. round here (areas around nyc) you gotta have at least 900 to start looking at decent places and salaries aren't that much higher, if at all.

So true. The houses that you can buy for 450k in Westchester and Long Island are more modest than what people who earn a resident's salary have in most parts of the US.

This is not an exaggeration.

 

[Pilot Doc]

You can't buy a house with only 5% down after 2008. Minimum 20% down to get best rates. If you are looking to get a mortgage, you must have your financial records in order: 1) at least a year of income tax return; 2) current paystubs; 3) 2 months worth of history of all bank/investment accounts.

That's for the average buyer. Docs get a different deal - perhaps not at the BEST rate. If you do decide to buy, talk to the partners in your group to find an accommodating local bank.

 

[Lonestar]

I would wait atleast a couple of years. I will give you my scenario.

I am in the 2nd yr of my practice. Joined in august 2008. signed a 3 yr contract. I am content with the practice. I have been renting an apt for last yr and will continue to rent for another year.

In the meantime, I am saving up for a 20% down payment. I will probably look for a 400-500K house. I bought an Acura and am paying that off in 3 yrs so the monthly installment is 1100. I have my old house from residency that my family (parents/sister) continues to live in that I am paying the mortgage for (138K @ 4.5%). Student Loans of 164K @ 4.25%.

I would recommend waiting to buy a decent house because of all the closing costs involved in buying a place that you are not going to stay in for a long time.

Hope this helps.

 

[Noyac]

You can afford it. I agree with those that say to either rent for some time or buy something you think you will be in for a long period of time. I wouldn't buy anything that I expected to unload in the next few years. Your job may seem ieal now but you do need to give it some time to really get a grasp of the layout. What is good now may not be so good in 2 years.

for example, I bought a bigger house than I needed when I joined my first group. I thought the job was going to good and that I would be there for at least 5-10 yrs. 2 yrs later I sold the house and changed jobs. This was 5 yrs ago and I made a good deal of money on that house. Had I bought a smaller one I wouldn't have made nearly as much but times have changed and the chance of profiting like I did is lower. I would check with the area and see what size (price range) houses are moving in your area and consider staying in that range in case you need to unload.

 

[panetrain]

Buy the house! You can't live your entire life scared. Change will happen in all aspects of you life throughout your entire life. You must be adaptable to survive. If your waiting for the job or wife or life that will never change before you buy and enjoy a nice home then just live in a trailer like all the other guys who have posted to this thread. These aspects of your life will always change. Life is dynamic by nature. Buy and enjoy now, tomorrow you may die! This is the best time in the past 50 years to buy a home. Waiting a few years will likely result in paying 30% more for the same home as well as 2-3 years in lost equity and rent payments, which could sum up to paying 50% more for the same home in 2-3 years!

 

[foxtrot]

I would rent for 1-2 years to confirm that you are a good fit for the job, and to save a little. And there are still some 100% no pmi doctor loans out there - just a few though. I would definitely NOT "buy something cheap" unless it is something you can stay in for a while. I see way too many people stuck in their homes that they cannot sell.

I completely agree with this. Times are much different that they were 5-10 years ago. The economy is bad, the real estate markets are worse, maobama care is going to shake things up, and the anesthesia markets have tightened as a result of this. My motto is to minimize stress levels by keeping things simple. You can always save your money for a year or two and then buy the super nice home when you know the direction the economy and your job is going to take. Just my 2 cents.

 

[Pilot Doc]

live in a trailer like all the other guys who have posted to this thread. as 2-3 years in lost equity and rent payments,

No one is saying don't spend money
No one is saying don't enjoy life.

What we are saying is spend money smartly. If you move to a small town and the only rentals are, in fact, trailers - then buy a house. Buy a typical middle class house that you can easily resell, not a "doctor house" that no one else in town can afford. But if, most likely, you live in a city you will have plenty of nice rental options. The way the market is, there's a decent chance you could find a house you want to buy and rent (or rent to own it) instead.

As for lost equity, you build very, very little equity in a house over 2-3 years with typical down payments. Certainly not enough to recoup purchase and sale costs. [See my prior posts for various rants on why renting is not "throwing money away" any more than owning.]

 

[countingdays]

As for lost equity, you build very, very little equity in a house over 2-3 years with typical down payments. Certainly not enough to recoup purchase and sale costs. [See my prior posts for various rants on why renting is not "throwing money away" any more than owning.]

It's true that you don't build equity in the first few years. Principle vs interest as a portion of your payment increases over time. The argument is flawed though because putting off buying a house puts off the time that you will start paying off significant amounts of principle with each mortgage payment. Putting off buying shifts the whole curve to the right. It doesn't move you up the curve, it just delays getting started.

I agree with you that renting is not throwing money away. Depending on your market, the cost of a rental can be much lower than the cost of a mortgage, insurance, fees, maintenance, etc. If you rent and invest the savings vs buying, you could very well end up gaining more from your investments than you lose in equity. The right thing to do, buying vs renting, will depend on taxes, the stock market, the housing market, and inflation. Since you can't predict these things, it is impossible to calculate the right decision. If you think the stock market will take off, rent and buy stocks. If you think the housing market will strengthen, buy. If you think inflation will increase rapidly, buy.

 

[Pilot Doc]

It's true that you don't build equity in the first few years. Principle vs interest as a portion of your payment increases over time. The argument is flawed though because putting off buying a house puts off the time that you will start paying off significant amounts of principle with each mortgage payment. Putting off buying shifts the whole curve to the right. It doesn't move you up the curve, it just delays getting started.

The issue here is what to do for housing in the situation where a move is substantially likely in a two or three year time frame . In that case, you're balancing the short term financial risk and benefits. If you move after 2-3 years you essentially have no equity - the transaction costs have consumed what little equity you build.

And yes, the delay does move the curve out, but it 1) presumably moves the curve to a point where you will successfully climb it and 2) the "loss" of delaying equity accumulation will only become apparent many years down the road when it will be financially trivial. What difference does it make if you have $200K or $220K of equity in your house at age 45?

 

[Soup5]

Thanks for the advice, everyone. We have 3 kids, 2 of whom are school-age. We've rented for 4 years. Wife wants to be less transient, more permanent. Job is quite stable (academics). Wanted to hear from other attendings if they feel they can afford $3500/mo. with a salary that is 250K. Do YOU guys feel house poor?

 

[Pilot Doc]

Thanks for the advice, everyone. We have 3 kids, 2 of whom are school-age. We've rented for 4 years. Wife wants to be less transient, more permanent. Job is quite stable (academics). Wanted to hear from other attendings if they feel they can afford $3500/mo. with a salary that is 250K. Do YOU guys feel house poor?

That helps quite a bit. Your other cash flow will figure substantially into the answer. Does wife work? What other car/student/credit card bills do you have? Private schools? High or low state/local taxes? Other lifestyle needs - do you favor vacations/restaurants/etc or don't care much whether you have them or not.

Running some basic numbers on a $250K salary

Federal taxes $42K (from quicken.com - assumes $40K in real estate deductions and 5% state/local income tax)
Soc Sec $6K (6% of 100K)
Medicare $3K (1.5% of all)
State Takes $12K
House payment $42K (assumes $3500 is principal, interest, tax and insurance)

Total of all that is $105K. Leaves you $150K to live on. Unless you have big other expenses (two BMW's, two kids in private school and $200K of student loans) a $400K house, at first glance, seems plenty doable.

 

[Soup5]

Appreciate it, Pilot. Thank you.

 

[Arch Guillotti]

Buy a typical middle class house that you can easily resell

"easily" reselling a house can be enormously burdensome in a poor housing market. Maybe things will be different in a few years but nothing is easy about the housing market right now, unless you are looking for a bargain and have the finances lined up to buy.

Otherwise I agree with the rest of your post.

 

[Pilot Doc]

"easily".

Poor word choice.

What I meant was to optimize your resale options if you buy a house fresh out of residency. Buy the type of house that is being listed and sold every week (hopefully every day) in your market. And buy it at a price point that if you want to sell for 10% less than you bought, the $$ lost is an annoyance and not a bankrupting event - especially considering what you'll be paying for tail coverage at the same time. Buy a house that will be easy to rent out if you want to and which has a mortgage that doesn't preclude buying another modest house when you move.

By contrast, don't go out and buy your dream house in a price range that only sells a few times a year in your area and might take a six figure price cut to move quickly and will leave you unable to buy a new house before selling the old one.

 

[badgas]

Another thing to consider are the current interest rates. The cost of money is very cheap right now. Rates will go up. At the rate that the government is spending and printing money, serious inflation is going to occur. It is better to have "stuff" when the dollar becomes worthless. IMO.

 

[badasshairday]

Another thing to consider are the current interest rates. The cost of money is very cheap right now. Rates will go up. At the rate that the government is spending and printing money, serious inflation is going to occur. It is better to have "stuff" when the dollar becomes worthless. IMO.

Inflation will be a good thing for our student loans though right?

 

[Narcotized]

Not an easy question to answer in this environment. First off, saying rent is throwing away money is absolutely absurd. If it's not your dream home and not a place you see yourself for an extended period of time, renting is clearly cheaper and far less hassle. They call rent throwing away money, but ignore mortgage interest, real estate taxes, maintenence, repairs, and the overall pain in the ass it is to own a house (I know from owning mine since 97). The big savings is always due to appreciation, but in case you didn't know, houses are still significantly overpriced in real dollars. So not only will they be flat, they will fall in value... in real dollars. No ifs, ands, or buts... IN REAL DOLLARS.

Now for the curveball. Major problem with the above is at some point even with the housing market falling in real value, housing prices will skyrocket in nominal dollars. Actual dollars will be used to wipe your ass because they will be cheaper than buying toilet paper. Laugh all you want; it's happened repeatedly throughout history with the course we're on. So, in a stable currency with our still overpriced housing market, you'd be a fool to buy for short/intermediate term. In the massively inflated environment coming at some point to America, debt and physical assets are your friend and cash in the bank is your enemy.

Like I said, not a straightforward simple question you ask.

 

[Narcotized]

Dream asks, where does "keep wifey happy" fit into the graph?

Keeping wifey happy is depicted by the green bars representing your bank account being constantly depleted and plumetting to zero after 30 years of marital hell. Notice both her account, and particularly ex-wifey's account, both shown by the pink bars, constantly rise in value and ascend exponentially up through 30 years time. Their accounts stop at 30 years because that is the average time before you kill them both.

 

[countingdays]

Not an easy question to answer in this environment. First off, saying rent is throwing away money is absolutely absurd. If it's not your dream home and not a place you see yourself for an extended period of time, renting is clearly cheaper and far less hassle. They call rent throwing away money, but ignore mortgage interest, real estate taxes, maintenence, repairs, and the overall pain in the ass it is to own a house (I know from owning mine since 97). The big savings is always due to appreciation, but in case you didn't know, houses are still significantly overpriced in real dollars. So not only will they be flat, they will fall in value... in real dollars. No ifs, ands, or buts... IN REAL DOLLARS.

Now for the curveball. Major problem with the above is at some point even with the housing market falling in real value, housing prices will skyrocket in nominal dollars. Actual dollars will be used to wipe your ass because they will be cheaper than buying toilet paper. Laugh all you want; it's happened repeatedly throughout history with the course we're on. So, in a stable currency with our still overpriced housing market, you'd be a fool to buy for short/intermediate term. In the massively inflated environment coming at some point to America, debt and physical assets are your friend and cash in the bank is your enemy.

Like I said, not a straightforward simple question you ask.

I don't see why you'd discourage buying housing while talking about inflation. If you really believe that the dollar will fall soon and rapidly then buying housing, or gold, is exactly what you would want to do, especially buying with credit. You'd get tangible assets that hold value while the cost of your loan drops to nothing. Narc, if the dollar is going to fall, then refinance your home, take the equity and buy gold. You'd rule the dirty south post-apocalypse. 😉

Dream, keeping wifey happy shifts the X axis downward. Dream, quit paying your loans off so fast! You are paying with valuable present-day dollars loans that could be paid with future toilet paper dollars if you can hold off on paying them for a few years.

 

[error404]

Yes, you can afford this.

Standard practice right now is to qualify folks for loans if the house is 3x or less, where x=annual income.

In fact, coming from the bay area, I'm shocked to hear questions about being able to afford something less than twice the pretax income.

(My SO and I are putting in our down-payment tomorrow on a place that is roughly 6x our annual income, locking in a good rate and building equity in the place we'd like to stay for a long time. We will be very housepoor until I finish residency. Now *that's* a discussion.)

 

[Narcotized]

I don't see why you'd discourage buying housing while talking about inflation. If you really believe that the dollar will fall soon and rapidly then buying housing, or gold, is exactly what you would want to do, especially buying with credit. You'd get tangible assets that hold value while the cost of your loan drops to nothing.

You are paying with valuable present-day dollars loans that could be paid with future toilet paper dollars if you can hold off on paying them for a few years.

That was exactly my point. Physical assets and debt will be your friend when the debt becomes increasingly unserviceable. I didn't say anything about soon and rapid, but it is positively inevitable.

As for taking out debt and paying with future toilet paper dollars, that's exactly what America has done. As Newton might say, debt that was created can not magically be destroyed. Somebody gets fuqqed when you dump your debt on others. Creditors get stuck with it, responsible people paying taxes get stuck with it, and responsible people with cash savings get stuck with it as the debt is monetized and dollar value drops.

Watch the wheels turn:

http://www.usdebtclock.org/

 

[pd4emergence]

My advice for new grads (it wasn't too long ago for me)

1. You will never see another increase in income in the amount that comes from finishing residency and beginning practice. With that comes a large increase in expenses. Right now as a resident you don't pay disability ins or a big house that costs alot more (ie power, ins, furniture....). You don't pay malpractice ins. or large health ins. premiums. You also aren't trying to save for the future. You are just trying to get by. If you have a family or plan to, this should be added into your future planning for expenses. Factor these considerations into buying a house.

2. Buy a house that will be easy to sell. Consider renting. I live in a medium to small sized town. I bought a house coming out of residency that is about equal in price to what I make in a year. Realistically, If I had to move in the next six months, I would have trouble breaking even on my house and I don't think it would sell quickly because of the price range that I bought in. Luckily I am happy and don't plan on going anywhere for a while.

3. Get a 15 year fixed loan if you buy. Don't go for the ARMS or any other loan with acronyms and difficult to understand terms. If you can't afford to buy the house with a fifteen year loan buy a cheaper house.

4. You will never again have the chance to set up your finances in the time of such a dramatic increase in income. Try to set them up to live off of 1/2 to 2/3's of your take home pay. In the future you income will fluctuate. Save what you can now.

5. Try not to make any big purchases (other than a house) for a year. Don't go out immediately and buy a new car. Try to wait and see what you can afford after you figure out what your expenses are going to be.

pd4

 

[sethco]

Inflation will be a good thing for our student loans though right?

Absolutely.

In fact, for the MS-IVs graduating this year, try to consolidate all your loans, in order to lock in an extremely low interest rate.

 

[Pilot Doc]

Didn't the consolidate all your loans at a very low rate trick get legislated away.

 

[sethco]

Didn't the consolidate all your loans at a very low rate trick get legislated away.

My bad.

I consolidated my loans back in 2005 with Sallie Mae, but their website says they no longer consolidate.

However, the following gov't website still offers student loan consolidation. I'm not sure, but I think it allows the borrower to lock in current loan rates.

http://www.loanconsolidation.ed.gov/

...but I also noticed this

http://www.finaid.org/loans/scripts/interest.cgi

Please note that the College Cost Reduction and Access Act of 2007 cut the fixed interest rates on newly originated subsidized Stafford loans for undergraduate students to 6.0% (2008-09), 5.6% (2009-10), 4.5% (2010-11) and 3.4% (2011-12), with a return to 6.8% in 2012-13. These cuts are available only to undergraduate students, not graduate students, and only for subsidized Stafford loans, not unsubsidized Stafford loans. Those loans remain at a fixed rate of 6.8%.

Basically if you had loans before 2006, you are eligible for a great rate, but they screwed everybody else.

 

[Pilot Doc]

Basically if you had loans before 2006, you are eligible for a great rate, but they screwed everybody else.

yeah, I consolidated all mine at 3.5%. With any luck, I can string out repaying them into retirement.

 

[militarymd]

inflation only helps with your debt only if your income increases proportionally with the inflation and other indices....at least that's how I understand it.

I'm not expecting our (physicians in general...and certainly not anesthesiologists) income to go up....so the debt/inflation argument is not valid in my mine.

I'm paying off my house ASAP.................i think.

 

[FadingPromise]

Dream asks, where does "keep wifey happy" fit into the graph?

Keeping wifey happy is depicted by the green bars representing your bank account being constantly depleted and plumetting to zero after 30 years of marital hell. Notice both her account, and particularly ex-wifey's account, both shown by the pink bars, constantly rise in value and ascend exponentially up through 30 years time. Their accounts stop at 30 years because that is the average time before you kill them both.

I am sorry but this was classic. I bursted out laughing while eating my snack during study break. Kind of sad but can be very true...

 

[Lonestar]

inflation only helps with your debt only if your income increases proportionally with the inflation and other indices....at least that's how I understand it.

I'm not expecting our (physicians in general...and certainly not anesthesiologists) income to go up....so the debt/inflation argument is not valid in my mine.

I'm paying off my house ASAP.................i think.

Now that is smart. My plan is to pay off the new house that I will buy in the future quickly. 15 yr fixed plan. I am sure that I am not going to get a loan better than 4.5% in the future. So, I will wait till my expensive car payments will be finishing around the time I buy a new house. This will be roughly 2.5 yrs into my practice. I am putting the rest of my savings in good dividend paying stocks. Can't argue about a fixed income of 6.5-7.5% with the tax rate of roughly 20% on that income. This is assuming that the companies do not appreciate in stock price at all.

 

[countingdays]

inflation only helps with your debt only if your income increases proportionally with the inflation and other indices....at least that's how I understand it.

I'm not expecting our (physicians in general...and certainly not anesthesiologists) income to go up....so the debt/inflation argument is not valid in my mine.

I'm paying off my house ASAP.................i think.

It's not only true if your income increases with inflation. It's also true if your assets increase with inflation.
You are probably right that at 4% inflation, your income is likely to lag inflation. At 20% inflation, your income will have to be adjusted upward and your debt would be made relatively cheap.

 

[militarymd]

It's not only true if your income increases with inflation. It's also true if your assets increase with inflation.
You are probably right that at 4% inflation, your income is likely to lag inflation. At 20% inflation, your income will have to be adjusted upward and your debt would be made relatively cheap.

And who's going to to that for you?

Obama?
Private 3rd party payers?
the lawyers?
the hospital?
CMS?

 

[countingdays]

And who's going to to that for you?

Obama?
Private 3rd party payers?
the lawyers?
the hospital?
CMS?

 

[militarymd]

You do realize that, as physicians, our income does not correlate with the rest of society......that our reimbursement, in real dollars, as steadily decreased over the years.

 

[countingdays]

You do realize that, as physicians, our income does not correlate with the rest of society......that our reimbursement, in real dollars, as steadily decreased over the years.

Yes, but I think our salaries would adjust to inflation too. They might not compensate as quickly or as fully as in other sectors, but we'd probably get adjusted billing rates that partially make up for loses in real income from inflation. I think the impact would fall somewhere between continuation of our current real income and a complete loss from inflation. This isn't something I can prove to you. Think what you want.

 

[militarymd]

Yes, but I think our salaries would adjust to inflation too. They might not compensate as quickly or as fully as in other sectors, but we'd probably get adjusted billing rates that partially make up for loses in real income from inflation. I think the impact would fall somewhere between continuation of our current real income and a complete loss from inflation. This isn't something I can prove to you. Think what you want.

I know a few anesthesiologists who have been in practice for 30 some odd years.

This is what they tell me.....their salary has been essentially unchanged for the last 30 years....

they made the same number of dollars 30 years ago as they do now...

so....in economic terms....they have made less and less income over the last 30 years.

 

[Narcotized]

This is what they tell me.....their salary has been essentially unchanged for the last 30 years....

they made the same number of dollars 30 years ago as they do now...

3 or 4 hundred thousand in 1979?? Man, that's some serious jack!!!

Our real income will keep falling. 3 or 4 hundred today is still a lot of money and it won't stand. But at some point inflation or hyperflation will increase the dollar rate, but who cares, it will still be a lose of real income.

You both make good points. If income stays the same, the debt will still be the same percentage of income regardless of inflation, but as GypsyMan says, the rising asset value will shrink the debt burden.

It would take serious amount of research to roughly predict where this goes, and even that would only be an educated guess. Since this is pretty unchartered territory for the US, you'd have to study the money paper currencies that collapsed or had crisis from excessive debt to get an idea how bad the inflation will be, and even then, every situation is entirely unique. We aren't Zimbabwe or post WW1 Germany, but we are still in serious trouble with debt.

 

[cfdavid]

If you have a very long time horizon, then buying is a good deal. Rates are very low righ now. If not, sit tight as bargains will still be around but you may not be able to catch the low rates currently available.

It's a catch22 right now. If the dollar plummets, then asset prices (including homes) would generally appreciate. However, homes have been the source of the last big bubble, so it may not be as probable that inflating the monetary supply gets channeled into housing.

Personally, I'm going to rent as a resident. FOR SURE, there's more s.hit to hit the fan including the housing market. Let the "land lord" sweat the BS. For you? Just concentrate on gettin the best training possible. Then, you can assess the situation at that time. But, I'm very convinced that THIS recession is the real deal, and will take YEARS for things to recover. Bottom line, you have time on your side. So use it wisely.

Just my 2 cents.

cf

 

[cfdavid]

I know a few anesthesiologists who have been in practice for 30 some odd years.

This is what they tell me.....their salary has been essentially unchanged for the last 30 years....

they made the same number of dollars 30 years ago as they do now...

so....in economic terms....they have made less and less income over the last 30 years.

all the reason why Americans should be up in arms against this expansion of monetary supply (i.e. inflation). If wages are NOT going up accordingly, the the bottom line is an "adjustment" in standard of living vis-a-vis purchasing power....

 

[BTC]

Fresh out of residency. New job will amount to roughly 250K by year's end (when including bonuses, etc.). Can I buy a home that is 450K with only 5% down? Can attendings afford 3500/mo. straight out of the gates? Don't want to be house-poor. Thanks in advance for the advice.

The rule of thumb is that you do not want to buy a house that has a mortgage payment greater than 25% of net income or 33% of gross income. So, in your case, deduct taxes and loan payments from you income.

Assume:

$250,000 x 0.7 (30% tax rate) = $175,000
$2,000/mo in student loan payments = $24,000
So, your net income is around $150,000/year or $12,500/month
0.25 X $12,500 = $3,125 = what you can afford in a monthly home payments assuming your income stays at $250,000/year

With a 6.0% interest rate on a 30 year fixed, this comes out to be about a $525,000 mortgage.

But I think the trick these days is getting any mortgage with less than 15% down.

 

[notinkansas]

Don't forget that you are now officially "rich" at least by Chairman Maobama's standards. A plethora of new taxes awaits you as well!

Nobody is saying don't buy at all.

We are saying bide your time to make the best possible purchase. With the new house will come the strong urge/need to buy stuff to fill it.

And it's so true that you don't know if your new job will be a great fit. There is nothing worse than being trapped in a job you hate because of being stuck with a house you can't sell, or student loan debt, or other financial circumstances.

It seems wise to wait a bit until at least you get a feel for how your new job will be. Nobody takes a job thinking they will probably hate it. We all think our new jobs will work out well. Sometimes they don't.

Another thing about waiting, even just a few months into your job is that you will have a nice stash of cash before you buy. That way if you have unexpected repairs shortly after moving in (or other unexpected expenses) you won't have to go into even more debt to cover that. A pile of cash is NEVER a bad thing!

Too many people are struggling in today's economy because they defined "affording" something as being able to make the monthly payments, without considering that the unexpected might happen. Any number of things could happen, including an accident that leaves you unable to work (even temporarily), your group getting taken over with reduction in salary, or you hating your job -just to name a few. Making sure you are prepared for the unexpected isn't living in fear. It's a good practice for life. After all, you spend time during each case thinking about what you might do if something goes wrong, correct? So why not apply the same thinking to your life.

Not trying to imply you don't have savings. It's just I've seen too many people in my life struggling financially due to unexpected events. They were doing "fine" but essentially living paycheck to paycheck, the something happens and they are facing things they never thought they would face.