Should I buy a house 1.5 years prior to starting medical school?

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Pathfinder9

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Hi everyone,

Thank you for your time in here!
Let's say I'll start med school in 7/2022, and I need to have a new place in the next few months. What would you guys suggest? I'm currently working very limited hours due to COVID-19, so I use this time just for MCAT studying. As soon as MCAT done in September, I'll try to do full time job (let's say I'll have one after Sep.). I have several concerns not sure who to ask, if you don't mind, please give me your opinions.

1. I don't like leasing an apartment very much, because I would like to use that amount paying toward the mortgage. (In case, I can't mortgage a place, I will share a room from someone, my last option.) Between townhouse/single family house, which one is best for cost (HOA, monthly bills, other extra costs) and easy to sell? The place is mainly just for myself.

2. I have heard that prior to attending med school in July each year, around April, med students will submit financial aid paper work. If I have a mortgage, how will it affect this process on: aid given, loan (interests...), etc...?
- Due to that: should I sell my place prior to April of that year, or just have tenants to lease the place after I leave?

3. Another question outside buying a house: the year before med school starts, if I work 2 full time jobs, meaning my gross income of that year is much higher than other normal years, how will it affect financial aid?

Thank you in advanced!
 

rdyotz

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Hi everyone,

Thank you for your time in here!
Let's say I'll start med school in 7/2022, and I need to have a new place in the next few months. What would you guys suggest? I'm currently working very limited hours due to COVID-19, so I use this time just for MCAT studying. As soon as MCAT done in September, I'll try to do full time job (let's say I'll have one after Sep.). I have several concerns not sure who to ask, if you don't mind, please give me your opinions.

1. I don't like leasing an apartment very much, because I would like to use that amount paying toward the mortgage. (In case, I can't mortgage a place, I will share a room from someone, my last option.) Between townhouse/single family house, which one is best for cost (HOA, monthly bills, other extra costs) and easy to sell? The place is mainly just for myself.

2. I have heard that prior to attending med school in July each year, around April, med students will submit financial aid paper work. If I have a mortgage, how will it affect this process on: aid given, loan (interests...), etc...?
- Due to that: should I sell my place prior to April of that year, or just have tenants to lease the place after I leave?

3. Another question outside buying a house: the year before med school starts, if I work 2 full time jobs, meaning my gross income of that year is much higher than other normal years, how will it affect financial aid?

Thank you in advanced!

Don't buy a house that soon before possibly moving. Break even point is around 4 years. The more you make, the less institutional financial aid you will get. That said, FAFSA uses the year before (Starting school in 2022 would use 2020 tax returns, though you would get hit in 2023 school year).

You just said you are working limited hours and are trying to buy a house with what money. If you are rich / inherited a lot of money, use it to pay for medical school, being a landlord is not awesome.

Individual areas vary drastically and your single family home vs townhouse is a useless comparison. One place may have a HOA and 20' away could not. One may be older and less insulated so it has higher utility costs.

I'm thinking you just thought it would be cool to own a home and have not done your research yet. Speak with a realtor to learn more about your area.
 
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cyanotoxin

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Hi everyone,

Thank you for your time in here!
Let's say I'll start med school in 7/2022, and I need to have a new place in the next few months. What would you guys suggest? I'm currently working very limited hours due to COVID-19, so I use this time just for MCAT studying. As soon as MCAT done in September, I'll try to do full time job (let's say I'll have one after Sep.). I have several concerns not sure who to ask, if you don't mind, please give me your opinions.

1. I don't like leasing an apartment very much, because I would like to use that amount paying toward the mortgage. (In case, I can't mortgage a place, I will share a room from someone, my last option.) Between townhouse/single family house, which one is best for cost (HOA, monthly bills, other extra costs) and easy to sell? The place is mainly just for myself.

2. I have heard that prior to attending med school in July each year, around April, med students will submit financial aid paper work. If I have a mortgage, how will it affect this process on: aid given, loan (interests...), etc...?
- Due to that: should I sell my place prior to April of that year, or just have tenants to lease the place after I leave?

3. Another question outside buying a house: the year before med school starts, if I work 2 full time jobs, meaning my gross income of that year is much higher than other normal years, how will it affect financial aid?

Thank you in advanced!

I'll be starting med school this August and just sold my house after only living in it for ~2.5 years. We live in an area with rapidly skyrocketing house prices, so we actually made a pretty significant profit. That said, as the above poster mentioned, buying a house is typically not recommended unless you plan to own it for a minimum of 4-5 years.

Why? Because buying a home and selling a home both come with expensive fees above and beyond the price of the home itself. When you buy, you will pay thousands in closing costs. When you sell, you will pay even more thousands in agent fees and possibly thousands more to settle any inspection objections.

It's possible you could lease it out, but I know I wasn't willing to tackle that as a new medical student. Especially if you have to move out of state for school, you would almost definitely need to hire a local manager on-site to handle tenant issues, which makes it much harder to break a profit.

As for your other questions: Having a mortgage doesn't really impact aid. If you have higher gross income right before applying, that might affect your aid.
 
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longhaul3

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You will not gain much equity at all in a house in 1.5 years. Your monthly mortgage payments will amount to throwing money into the wind the same way your monthly rent payments do. Furthermore, there are significant costs associated with buying and selling a house that are only financially favorable if they're amortized over a longer period of homeownership. Also, if you're young and working two hourly jobs, I doubt you will be able to get very good terms on a mortgage.

Unless your house appreciates significantly in value in that time, either because you're in a rapidly growing market or you can somehow materially increase its value by your own handiwork, you will have trouble selling it for enough to break even (which will be significantly more than what you buy it for). Meanwhile you're taking on significant risk: structural, plumbing, electric, environmental issues can crop up any time and leave you on the hook for 20k in the blink of an eye.

I bought a house about a year before I went to med school because I had no plans to go to med school or leave town at the time. Obviously things changed, and when I sold it a year later, I was thrilled to get what I bought it for—and ate 10k+ in closing costs to do so.
 
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Zen Arcade

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Not worth your while unless you plan on staying there at least 5 years. A better use of your money is to save up for med school and directly apply what would be a down payment on a house towards tuition. When you go to med school, you delay having the comforts that many of your friends might have right now... but in the end you'll be able to afford what they have and then some if you play your cards right. The way I see it, the less you take out in med school loans the faster you can afford your dream house as an attending and the faster you can retire comfortably.
 
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Tenk

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Unless you have a lot of liquid capital or a huge monthly income that is unlikely to diminish, real estate is likely too risky for you. Also, every real estate market is different. The real estate market on Maui will be nothing like the market in Chicago and covid will affect each market differently. Thus, not knowing your market, anyone who gives you advice on SDN to buy really has zero clue as to what you’re actually buying.
 
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Pathfinder9

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Thank you very much for all of your replies. Generally, after reading your opinions, I pretty much know what to do. I'll just cancel that idea of mortgaging, just do my best to save until the day I can start med school. Really, I don't want to deal with all of that extra work while there is a good chance to lose some of the saving.

Don't buy a house that soon before possibly moving. Break even point is around 4 years. The more you make, the less institutional financial aid you will get. That said, FAFSA uses the year before (Starting school in 2022 would use 2020 tax returns, though you would get hit in 2023 school year).

As for working 2 full time jobs, all I meant was to work and save as much as I could, however, like you said I'm also afraid the second year of MS, my financial aid won't be good. That means I will receive zero help if the gross income is too much? What is a top number (where FAFSA won't help), do you know, for a single person?

Thank you!!
 

stayathomemom

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I know I'm beating the dead horse, but for anyone else with this idea: don't. Even besides the cost and potential financial loss issues, owning a house on any amount of property is a lot of work to maintain, especially if you are in an area with an HOA which enforces rules strictly (eg, lawn length, etc). If I didn't have kids and wasn't married to a man who lives and breathes house projects in his spare time, I would not buy a house during medical school. Home issues like plumbing leaks, appliance issues, garage door not working, etc. happen more than you'd think and always at the worst time! It would be so much easier to call a property manager to get it fixed. Get an apartment, or if you can afford it, rent a home/townhome where the neighborhood community/HOA manages landscaping, etc.
 
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ciestar

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Thank you very much for all of your replies. Generally, after reading your opinions, I pretty much know what to do. I'll just cancel that idea of mortgaging, just do my best to save until the day I can start med school. Really, I don't want to deal with all of that extra work while there is a good chance to lose some of the saving.



As for working 2 full time jobs, all I meant was to work and save as much as I could, however, like you said I'm also afraid the second year of MS, my financial aid won't be good. That means I will receive zero help if the gross income is too much? What is a top number (where FAFSA won't help), do you know, for a single person?

Thank you!!
It wont impact your loans. Many schools do nothing as far as aid goes anyway.
 
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rdyotz

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Thank you very much for all of your replies. Generally, after reading your opinions, I pretty much know what to do. I'll just cancel that idea of mortgaging, just do my best to save until the day I can start med school. Really, I don't want to deal with all of that extra work while there is a good chance to lose some of the saving.



As for working 2 full time jobs, all I meant was to work and save as much as I could, however, like you said I'm also afraid the second year of MS, my financial aid won't be good. That means I will receive zero help if the gross income is too much? What is a top number (where FAFSA won't help), do you know, for a single person?

Thank you!!

Yea, income does not affect FAFSA. It only affects potential money /scholarships given by schools, specifically need based aid.
 
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