Is Buying a condo in pharmacy school smart???

[jrpike]

Hey guys...This is my plan and I need some pros and cons....well I have been thinking of buying a condo if I get into pharmacy school. My logic is that since I am going to have to rent an apartment anyway why not put my money in something that will make me money in the future. I am hoping to get into a florida school...and if I buy the condo..maybe the equity can pay of my loans. My best friend is a mortgage broker and swears he can get me 100% financing with a $1,000 mortgage. I am not planing on working my first year and was thinking of a 2 bed/2 bath condo so I can get a roomate to help pay for the mortage. Is there anyone in my shoes...give me some advice pleaseee.

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[jrpike]

Hey guys...This is my plan and I need some pros and cons....well I have been thinking of buying a condo if I get into pharmacy school. My logic is that since I am going to have to rent an apartment anyway why not put my money in something that will make me money in the future. I am hoping to get into a florida school...and if I buy the condo..maybe the equity can pay of my loans. My best friend is a mortgage broker and swears he can get me 100% financing with a $1,000 mortgage. I am not planing on working my first year and was thinking of a 2 bed/2 bath condo so I can get a roomate to help pay for the mortage. Is there anyone in my shoes...give me some advice pleaseee.

 

[twester]

Pros:
1. The pride of ownership.
2. The potential to make your money work for you rather than someone else.
3. The ability to paint, decorate and remodel at will.

Cons:
1. There are additional expenses besides the mortage - insurance, taxes, HOA fees, maintenance.
2. Keep an eye on the small print. If this mortgage isn't for a fixed rate, you could get some nasty surprises later.
3. Do you plan to stay in the area where you're going to school? You'd probably not build up a lot of equity in four years. Will you be able to recoup your financing costs in four years?

I'm not trying to discourage you. I think home ownership is important - it just doesn't make sense in all circumstances. Personally, I've chosen to continue to rent for a few more years. It fits my situation better and gives me some flexibility.

Good luck!
Troy

 

[Hammrhage]

I am actually taking a class on investment/securities and the first thing the professor mentioned was NOT to buy a house. According to him, renting is more cost-effective (I was suprised initially but if you factor in all the costs/risks of ownership, he is correct). Try this website and crunch some numbers to see if buying will be more beneficial in your situation: http://www.myfico.com/CreditEducation/Calculators/MortgageRentvsBuy.aspx?fire=1
There are so much responsibility in ownership that you might not want to drown yourself in it during pharmacy school. Since you might be practicing or doing your residency elsewhere far away from home, consider the lost if you were to sell in a few years from now, in a potentially ugly market. Afterall, the market for housing is declining b/c of the higher interest rates. I don't think this is a good time to buy a home. Except for the past few years, home value has not appreciate all that much. Just keep in mind property taxes, depreciation from wear/tear, maintainance cost etc...

 

[bananaface]

They say it takes about 5 years to make it worth buying a home. If you are planning on staying in the same place after school, it might be worth it.

 

[starsweet]

This has been really informative. I always thought buying was better than renting, regardless of the time period, but I guess I was wrong! I'm going to look at apartments now. (I don't plan on staying in the same place.)

 

[patmcd]

I've done some looking into this over the last 6 months or so. It seems a lot of it depends on how expensive places are where you looking, the tax benifits in the area, and your interest rate. Overall if you are planning on selling after 4 years you are looking to break even with renting or come out just barely ahead. The only real benifit you can could on is the postive addition to your credit history assuming that you don't default or something.

 

[TheChemist]

They say it takes about 5 years to make it worth buying a home. If you are planning on staying in the same place after school, it might be worth it.

I'm curious, where did you hear this? I only ask because I've made over 150K in about a year in half on my house. Of course I live in southern california.

 

[patmcd]

That would be the lovely location factor of it all. If you live in an area where housing prices are going through the roof you would surely make some money over 4 years.

 

[blueclassring]

we've bought a house in arizona where i will be going to school the next three years. i think it will be worth it since i am considering settling down there.

 

[pinkyrx]

I think a lot of it depends on how good the market is there. Are you planning on leaving the area once you finish school? If so, you don't want to get stuck with it, so make sure that there is a good seller's market if you decide to buy.

 

[BiOGoly]

What kind of mortgage? You can't finance a mortgage 100%, what you really have is a mortgage + an unsecured loan to cover what should be a down payment. This puts you in a sticky situation when it comes to small fees, like for insurance. Ideally you want a fixed rate mortgage, but the rate you are quoting is most likely an ARM or interest only. If the housing market is still going strong and interest rates remain low you might be fine, but it's rather risky...especially with interest only loans. It really depends on the condo market in your area, if you think there is decent growth left it might not be a bad deal even with an ARM. However, if I were you I'd save up until I could put 20% down on something.

 

[erinlindsey]

We just bought a house last sept and it's already apreciated 45K, granted we live in Seattle so the market is still good but nothing compared to CA.

 

[imperial frog]

What kind of mortgage? You can't finance a mortgage 100%, what you really have is a mortgage + an unsecured loan to cover what should be a down payment.

It doesn't have to be unsecured. You can take out a second mortgage to cover the percentage not covered by the first. This will get you a better interest rate than an unsecured loan and allow you to deduct the interest. The first mortgage should be at least 80% so you can avoid the mortgage insurance.

 

[ICA]

I am actually taking a class on investment/securities and the first thing the professor mentioned was NOT to buy a house. According to him, renting is more cost-effective (I was suprised initially but if you factor in all the costs/risks of ownership, he is correct). Try this website and crunch some numbers to see if buying will be more beneficial in your situation: http://www.myfico.com/CreditEducation/Calculators/MortgageRentvsBuy.aspx?fire=1
There are so much responsibility in ownership that you might not want to drown yourself in it during pharmacy school. Since you might be practicing or doing your residency elsewhere far away from home, consider the lost if you were to sell in a few years from now, in a potentially ugly market. Afterall, the market for housing is declining b/c of the higher interest rates. I don't think this is a good time to buy a home. Except for the past few years, home value has not appreciate all that much. Just keep in mind property taxes, depreciation from wear/tear, maintainance cost etc...

Thank you for that link...

I, too, have been looking to buy a condo in So. Cal for pharmacy school. In the last year, the average property appreciation in Los Angeles was 22%. Using that calculator, it looks like buying a home (and holding it for at least 3.4 years) beats renting even if the appreciation decreased to 5%. I'm in!

 

[ultracet]

Can these be merged?? the same question is in the pre pharm area......

 

[bananaface]

Can these be merged?? the same question is in the pre pharm area......

Sure. I'll put it in Pharm since it's not an admissions/school choice/career choice question.

To the OP: Please post each topic just once.

 

[DownonthePharm]

I am all for buying, but I would buy a house, not a condo if you can. Condos have a lot of hidden fees associated with them all for the joy of living cramed up against someone like in an apartment and paying for the activity center you will never have time to use. Buy a house and let the neighborhood kid mow your lawn for $20.

 

[DrugDealer]

I'm curious, where did you hear this? I only ask because I've made over 150K in about a year in half on my house. Of course I live in southern california.

Yeah, it's very location dependent. My boyfriend's business partner bought an apartment in Manhattan about 3 years ago for $450K. He's selling it now for a little over 700K.

 

[imperial frog]

Buy a house and let the neighborhood kid mow your lawn for $20.

$20??? Send that kid over here.

 

[freshbeatschris]

Hey guys...This is my plan and I need some pros and cons....well I have been thinking of buying a condo if I get into pharmacy school. My logic is that since I am going to have to rent an apartment anyway why not put my money in something that will make me money in the future. I am hoping to get into a florida school...and if I buy the condo..maybe the equity can pay of my loans. My best friend is a mortgage broker and swears he can get me 100% financing with a $1,000 mortgage. I am not planing on working my first year and was thinking of a 2 bed/2 bath condo so I can get a roomate to help pay for the mortage. Is there anyone in my shoes...give me some advice pleaseee.

I don't have the time before class to read what everyone else has written, but just wanted to pipe in here. My fiance and I are going to attempt to do the same thing by this August (I'm starting pharm school in August, but I still don't know which one). The way I'm looking at it, they won't let my name be on the mortgage because I will have NO income besides loans. My fiance will be the owner of the home and I will be the "renter" helping to pay the mortagage with my loan money. We are hoping to keep the place for the four years that I am in school before we move and buy a house. At least we won't be pissing our money away on rent.

I hope it works. It's time for me to grow up and at least attempt to be an adult.

Chris

 

[ICA]

Oh, I forgot to share my link with 'yall.

www.zillow.com

You can "value" any home (or potential home, and yes, even condos)... which will give you a starting point on negotiating property prices.

HTH

 

[ICA]

My fiance will be the owner of the home and I will be the "renter" helping to pay the mortagage with my loan money.

Haha.. I thought I was gonna be the only one paying off a loan with a loan. Loans... Bring 'em on!

 

[off2skl]

Oh, I forgot to share my link with 'yall.

www.zillow.com

You can "value" any home (or potential home, and yes, even condos)... which will give you a starting point on negotiating property prices.

HTH

Just to let you know zillow does not always give a very accurate home value. I know there was an article on it somewhere, but I also tried it for my condo and knowing what the current sale price are and zillow was off by at least 20-30K. And had the most recent sale data completely wrong (wrong price and year).

As to the poster who mentioned against buying a condo. Granted, I am getting a little tired of my upstairs neighbor, but overall the condo has been a good investment. First of all, I never would have been able to afford a house and a condo was a great way to break into the market and gain equity (I live in AZ and the market has been hot so that has definitely helped). Yes, you have to pay an HOA fee every month, but look at what it covers in the complex you are looking to buy into. Mine covers water, trash collection, sewage, all outside maintenance (aside from the small patio I have), access to 2 pools and tennis courts, and the outside structure is insured by the HOA. That being said, you still need to have insurance for your belongings (similar to a renter policy) as well as internal structures should anything happen (it runs us about $150 a year). As a condo owner you are responsible for any repairs/maintenance on the inside of the condo,
In a house your insurance would most definitely be higher and you are responsible for any and all repairs.

 

[Bhavesh]

sorry to dig up such an old thread, but it looks interesting

how do students, that don't have an income during phamacy school, get approved for a mortgage?

I mean following this thread you:
-need some money for a downpayment
-need some money for fees, closing costs, insurance
-need some money for maintenance of the building
-and most importantly: need to show an income to get the mortgage

I don't think you're allowed to use your monthly rent as "income"...are you?

 

[MindOverMatter]

Make sure you take into account the likelihood of hurricanes (and therefore the cost hurricane-related repairs). Insurance policies for new buyers in FL sucks, if you can even get them this time of year.

 

[beccala33]

sorry to dig up such an old thread, but it looks interesting

how do students, that don't have an income during phamacy school, get approved for a mortgage?

I mean following this thread you:
-need some money for a downpayment
-need some money for fees, closing costs, insurance
-need some money for maintenance of the building
-and most importantly: need to show an income to get the mortgage

I don't think you're allowed to use your monthly rent as "income"...are you?

I bought a house last year when i started school and i am so so so happy that i did. when i got my mortgage i was working as a teacher and just submitted my paystubs and w2 and got approved. i pay my mortgage with my student loans, just as i would've been paying rent with that money. i put down a considerable amount because i came into some money, so my mortgage isn't that expensive (around $700 with my taxes included.) if you can afford the down payment, i am all for buying a house when you move for school. you're going to be there no matter what, so why not? i bought a 2 year old house, so there have been no maintenance costs - thank god. all year last year i lived alone, but a very good friend from school who spends all her time at my house anyway is moving in this year (i have 2 extra bedrooms) and she'll be paying half my mortgage. that's money that i will get back when i move. it's a win-win situation really.
and i believe what you're asking in your last sentence is, can you use your student loans as income? the answer to that is no, you are not allowed to pay back borrowed money with borrowed money. for example, you can't use a borrowed income, like student loans, to insure that your mortgage will be paid, you need to show some kind of income.
owning a house is the best feeling, it really is. so my advice - if you can swing it, DO IT!

 

[Glowwyrm]

What kind of mortgage? You can't finance a mortgage 100%, what you really have is a mortgage + an unsecured loan to cover what should be a down payment. This puts you in a sticky situation when it comes to small fees, like for insurance. Ideally you want a fixed rate mortgage, but the rate you are quoting is most likely an ARM or interest only.

You can do 100% financing and it does not have to be an interest only. You'll probably end up paying PMI unless you have a very high credit score though.

 

[sakigt]

While Im not IN Pharmacy school, Im doing prereqs and am broke as a joke.

I bought my condo a year ago with 100% financing, with a government funded downpayment. Your plan will vary by state, but because of my income and credit score I was approved for a $121,000 condo with $1,500 down (because of the builder). $25,000 is a government backed loan so my mortgage is on the balance (just under $100k). It may be in your best intrest to look at the first time homebuyers programs in your area.

Personally, I bought my condo for a few reasons. None of which are investment related...
1) Rent is always the same (in fact, it goes down once my 2-year required PMI goes away) and cheaper than other comparable areas.
2) I dont have to worry about moving
3) The tax break isnt half bad

Not to mention Im building credit throughout the process. Renting doesnt (But theyll be sure to let them knowif you DONT pay. ). If you have all your bills paid off like I do, having a mortgage payment show is crucial.

If I break even selling my condo in 4-5 years, Ill be happy.

Edit: I bought a 2/2 and have a roomate as well. $$$

 

[12345]

Keep in mind the location, college towns don't always apply to the rules of other areas in terms of the market going up or down bc there are always new people moving in and other people moving out. If you buy the condo after you graduate you could always continue to rent it out.

 

[Bhavesh]

...when i got my mortgage i was working as a teacher and just submitted my paystubs and w2 and got approved. i pay my mortgage with my student loans, just as i would've been paying rent with that money. i put down a considerable amount because i came into some money, so my mortgage isn't that expensive (around $700 with my taxes included.)...

So if I want to buy a house or a condo if I go back to school, I can use paystubs/W2 from my current job to get approved for the mortgage?

Do loan carriers need continued verification of my income? Ie. If I get approved for the mortgage the summer before starting school can I quit my job and still be ok (by using student loans to cover the mortgage payments)?

This seems relatively straightforward. Are there other major unforseeable issues?

 

[beccala33]

So if I want to buy a house or a condo if I go back to school, I can use paystubs/W2 from my current job to get approved for the mortgage?

Do loan carriers need continued verification of my income? Ie. If I get approved for the mortgage the summer before starting school can I quit my job and still be ok (by using student loans to cover the mortgage payments)?

This seems relatively straightforward. Are there other major unforseeable issues?

that's what i used. once you get approved and get your house, that's that. they don't ever ask you for anything again as long as you pay your mortgage on time and everything.
i haven't encountered any problems at all, but that's just me...

 

[Bhavesh]

thanks for the advice beccala...you've been very helpful

I talked it over w' a friend, and he said the two places I might have trouble is:
-if I (currently) have a job in MA, won't I have trouble getting a mortgage for a place in another state if I don't have a job there?
-if I have student loans, it might hurt me because the student loan payment takes away from my ability to make the mortgage payment

did you get a house near the place where you worked, before going to pharmacy school?

 

[Lurkerkat]

-if I have student loans, it might hurt me because the student loan payment takes away from my ability to make the mortgage payment

Very true. The amount you have in student loans may affect your FICO score. I'm right now less than two weeks away from closing on a house and the credit report used for the mortgage lists all existing debt and current monthly payments. Thank god my husband has his career in full swing otherwise there is no way in heck anyone would lend me the money necessary to buy a home.

I'd strongly recommend going to your bank and getting pre-approved for a home loan. It's a great way to see if you can even find a lender who's willing to provide financing. It'll also show how much they're willing to lend you so you have a good idea of what price range you can realistically afford.

 

[beccala33]

thanks for the advice beccala...you've been very helpful

I talked it over w' a friend, and he said the two places I might have trouble is:
-if I (currently) have a job in MA, won't I have trouble getting a mortgage for a place in another state if I don't have a job there?
-if I have student loans, it might hurt me because the student loan payment takes away from my ability to make the mortgage payment

did you get a house near the place where you worked, before going to pharmacy school?

here's what i did:
i bought my house, not as a primary residence, but as an investment property. that way, my job in ny had no bearing on my mortgage in north carolina. you pay a little more in interest (my mortgage is a 7%, may have been at around 6.25 if i had been buying a 'primary residence') but it's well worth it.

 

[Lurkerkat]

here's what i did:
i bought my house, not as a primary residence, but as an investment property. that way, my job in ny had no bearing on my mortgage in north carolina. you pay a little more in interest (my mortgage is a 7%, may have been at around 6.25 if i had been buying a 'primary residence') but it's well worth it.

Interesting. Out of curiosity if you eventually sell the house will you have to pay income tax on any profit made no matter how long you've owned the property? I know with primary residences if you own it for something like four years, any profit made doesn't count towards income tax when you sell it.

 

[beccala33]

no, the income tax works the same. i plan on refinancing at some point (when i actually have a job) and when i do i will claim it as a primary residence.