Mortgage while in D-school

[Gbrando2]

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Hello folks, yes I've searched the forums and haven't really found exactly what I'm looking for. I was just curious if anyone bought a house for dental (or med, pharm, whatever) school and how your financial aid office felt about it. I am starting school next month and we are in the process of closing a mortgage on a $100,000 house. Our down payment and closing costs will be paid entirely with out own savings, but the actual monthly mortgage payments will be paid with student loan money. My grandma is cosigning, so that isn't an issue. I just want to make sure that I'm not misusing loan money or anything by paying a mortgage, instead of rent, with it. This mortgage with tax, insurance, etc, will only be about $800/month, while renting a comparable house will be about $1200+utilities. Anyway, let's hear what you folks have to say about it.

Oh, and I know most people will say "just rent instead", but with a wife, baby, dog, and cat, plus with the cost difference, we already have our minds made up. Plus we'll stick around in the same area after school is out, so we are pretty much settling down. Thanks.

 

[DrReo]

It will be able to work as long as you live with in your cost of attendance provided by U Nevada...

Do you know how saturated that area is??

 

[Gbrando2]

Alright, I just want to make sure that using my room and board money for a mortgage other than rent isn't going to set someone off.

Sorry, what do you mean by saturated?

 

[SeattleRDH]

I believe financial aid asks about housing costs not rental vs. mortgage costs so I would assume that you're fine.

 

[GreenWave08]

I am doing the same thing. I lived at home, commuted, and only took out the federal loans first two years and also worked on the weekends. With my girlfriend of 5 + years (don't know how people can handle a wedding while in d-school) getting a great job in the same city, we got a great deal on a small fixer up condo. We got FHA loan so I only had to put 3.5 down, which i took out of my retirement and we are splitting the cost of the mortgage, not to mention we got it just in time to qualify for the 8000 first time home buyer credit. One con people claim is unexpected problems, but since it is a condo, the fees cover anything major , ie plumbing, heat, structure, etc. Here are some specific numbers (mind you major metropolitan area)

Cost 241,000
Down payment ~7500
Monthly mortgage ( 30 year fixed at 4.5, an amazing rate) plus taxes and PMI- 1400
Condo fee - 250
So i am contributing slightly more than 800 a month, where most of my class mates are spending 900-1200 a month on average and my contrubution is going toward equity.
It was also appraised for 276,000. So thats already 30,000 inequity in a down market by signing on the dotted line, and with most of my family in construction, we are flipping it for next to nothing.

There were alot of things that went right in this situation, I couldnt just see myself spending equal or more for rent for not as nice of a place. And after three years, we will be able to refinance out of fha and be able to rent and hold as investment property for a profit, or use the profits from the sale as a down payment or more for our next home.

 

[Gbrando2]

Cool, thanks for the input. GreenWave, did you have any problem getting financing?

 

[DrReo]

Alright, I just want to make sure that using my room and board money for a mortgage other than rent isn't going to set someone off.

Sorry, what do you mean by saturated?

Saturated with general dentists. Look at dental town. You will be fine as long as you live within your means. Hopefully the housing marked raises in your favor.

 

[Gbrando2]

Saturated with general dentists. Look at dental town. You will be fine as long as you live within your means. Hopefully the housing marked raises in your favor.

Ooooh, sorry, my mind was on the housing track still. Honestly, I'm not really sure if it's saturated with GPs or not, but it's either there or back to Utah (where my wife is from), and I'm pretty sure Utah is the most dentist-saturated place ever.

 

[GreenWave08]

It is harder to get financing, but we used a family friend as a loan officer and she really helped us. But you need to get approved with your sig others salary, especially in this climate. With FHA you need to show at least one month of work but it is the only type that allows down payment as a gift. So my girlfriend got pre approved for an amount, we looked under that amount, then I gifted the down payment.

 

[youknowthedrill]

Don't buy too much house. Keep is reasonable and you should be fine. Good luck!