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loan repayment

cookiegrub

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I was wondering at the current loan interest being near 10%, how much money do recent residents have to set aside to help with minimum repayment per month. I have a family and I am looking to buying a home during residency (hopefully it's in a location not too expensive or out of line). I know that residency itself is going to pay peanuts but I just want to know how many peanuts I have to spare. Most residents usually get paid about the same but loans can differ significantly. I am set to owe near 400k, so I am quite worried about the ability to have a big enough place so I can study but also support my family at the same time. Thanks I really appreciate your response.
 
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EmergDO

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Assuming you have federal loans, RePAYE will subsidize some of the interest on your loans while you make income-based repayments. Then when you graduate residency you can decide whether to stay in an income based plan or refinace privately for a lower rate.

If you're interested in more reading you can check out the White Coat Investor who has a blog and a book where he talks about physician finances, including loans.
 

cookiegrub

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Assuming you have federal loans, RePAYE will subsidize some of the interest on your loans while you make income-based repayments. Then when you graduate residency you can decide whether to stay in an income based plan or refinace privately for a lower rate.

If you're interested in more reading you can check out the White Coat Investor who has a blog and a book where he talks about physician finances, including loans.
ok I will definitely read that book this year. I've been having difficulty deciding if I want to do PSLF because I plan on pursuing fellowship which could extend my training to 6-7 years (including residency). I will have 3 years afterwards to work with a qualifying employer so that I can continue to be considered within the 120 repayment plan. Hoping that I'll get the residency program that I'm going for so that I can stick at the same place for fellowship. I also have the grad plus loan so does that mean my loans are all federal?
REPAYE and PAYE both sound like doable programs provided the income of a resident. I'm breathing a little easier but this is still a lot to take in as I am aware how low my take home income will be (I've had jobs before under the ballpark of what residency pays and so I'm guessing rent need not be more than 1200$ per month).
 
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blub1212

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Renting vs buying is definitely something that will need to be dependent on where you want to live and the market in your area. In some places, it can be much cheaper to buy (my mortgage on the house I bought second year is $400 per month cheaper than the rent was my intern year). If you decide to buy, look into the physician mortgage loan.

Also, if you are considering doing the PSLF, know that it may limit where you want to work. For instance, I currently work at the same place that I did a residency. But, I am not employed by the same employer. When I was a resident, I worked for the hospital, which as a non-profit qualified. As an attending, I am employed by a separate arm of the corporation that is not non-profit and doesn't count... Another thing for you to consider is to have your loans refinanced. There are several different options, all of which would have you pay way less interest and they have programs where you only pay a very minimal amount during residency. If you go that route, then make sure you read the fine print about when you go into full repayment if you are considering fellowship.
 

cookiegrub

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Oct 8, 2016
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Renting vs buying is definitely something that will need to be dependent on where you want to live and the market in your area. In some places, it can be much cheaper to buy (my mortgage on the house I bought second year is $400 per month cheaper than the rent was my intern year). If you decide to buy, look into the physician mortgage loan.

Also, if you are considering doing the PSLF, know that it may limit where you want to work. For instance, I currently work at the same place that I did a residency. But, I am not employed by the same employer. When I was a resident, I worked for the hospital, which as a non-profit qualified. As an attending, I am employed by a separate arm of the corporation that is not non-profit and doesn't count... Another thing for you to consider is to have your loans refinanced. There are several different options, all of which would have you pay way less interest and they have programs where you only pay a very minimal amount during residency. If you go that route, then make sure you read the fine print about when you go into full repayment if you are considering fellowship.
thanks I just found out about the physician mortgage loan. To be honest, I am trying to avoid taking more debt but depending on the area that I match into, I don't know if that choice will be available. I can already see Dave Ramsay saying "you fool" if I take out the mortgage loan.
 

chessknt

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thanks I just found out about the physician mortgage loan. To be honest, I am trying to avoid taking more debt but depending on the area that I match into, I don't know if that choice will be available. I can already see Dave Ramsay saying "you fool" if I take out the mortgage loan.

I did a mortgage x2-First in residency, sold, moved for fellowship, sold again. I graduated fellowship with 250k in my 401k (all funded during my training) and supported a family of 3 (wife stayed at home). First home was cheaper to buy than rent and even though I sold at a slight loss due to bad market I came out ahead by finding a buyer and avoiding a 6% realtor bite. Second home I sold during bad market dip (again) and ended up using a realtor and had a net loss (compared to renting a similar home and accounting for closing costs on both ends of the transaction) of about 5k over a 3 year period which was worth it for me because our home was a huge upgrade compared to rentals available in a competitive area. Used doctor loans each time with ~3% interest rates.

The secret is that I moonlighted a lot (4-8 12 hr shifts per month unless on a heavy service rotation, never violated hours). You have the ability to earn a lot more money than what your residency pays you as long as the program allows it and you have the willpower/stamina to do it. I learned a lot on my moonlighting jobs as well and think they made me a better well rounded doctor overall and gave me experience of making independent decisions far before my peers did.
 

cookiegrub

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I did a mortgage x2-First in residency, sold, moved for fellowship, sold again. I graduated fellowship with 250k in my 401k (all funded during my training) and supported a family of 3 (wife stayed at home). First home was cheaper to buy than rent and even though I sold at a slight loss due to bad market I came out ahead by finding a buyer and avoiding a 6% realtor bite. Second home I sold during bad market dip (again) and ended up using a realtor and had a net loss (compared to renting a similar home and accounting for closing costs on both ends of the transaction) of about 5k over a 3 year period which was worth it for me because our home was a huge upgrade compared to rentals available in a competitive area. Used doctor loans each time with ~3% interest rates.

The secret is that I moonlighted a lot (4-8 12 hr shifts per month unless on a heavy service rotation, never violated hours). You have the ability to earn a lot more money than what your residency pays you as long as the program allows it and you have the willpower/stamina to do it. I learned a lot on my moonlighting jobs as well and think they made me a better well rounded doctor overall and gave me experience of making independent decisions far before my peers did.
would you say that you could have afforded the mortgage loan payments without the extra moonlighting? I am a little worried about overnight work so early in training and don't want to burn myself out. At the same time, I worry about the studying aspect in training (I don't know how different it is from med school).
 

chessknt

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would you say that you could have afforded the mortgage loan payments without the extra moonlighting? I am a little worried about overnight work so early in training and don't want to burn myself out. At the same time, I worry about the studying aspect in training (I don't know how different it is from med school).

First home yes (PITI was less than rent by about 40% in my weird market ), second home no.

The majority of learning in medicine is through experience and mentorship rather than reading but yes intern year is not the time to start moonlighting.
 
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