To those who bought a house in med school

[Mutterkuchen]

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. . . please help me.

My wife and I will be moving to Omaha this summer so that I can start med school. She has a decent job here in STL, but does not yet have employment in Omaha. How do we go about applying for a mortgage? Should we tell the lender that we are moving, and that my wife will be looking for a new job?

They will obviously find out when we buy the house in Omaha, and not in St. Louis. Will be be denied based on this information?

 

[8744]

If you can afford the down payment, most banks will lend you money for the house as long appraises for what you pay.

If you default on your mortage, the bank will have the house, which is why you don't generally need collateral to borrow money for a house.

As for your wife's employment situation, most banks understand this and will be reasonable about loaning you money provided you are not trying to buy a palace.

Don't lie to the bank. All of your business activities should be honest and above board. Not only is it the right thing to do, but deceit has a way of biting one in the ass eventually.

But by all means, get the mortage while your wife has a job. It will be a lot easier and you will probably get better terms. Most banks sell the loans on the secondary market so, within reason they don't care about your personal life. A guy going to medical school is a pretty sound investment for most banks, by the way.

 

[smgilles]

The previous poster is incorrect, you CANNOT get a loan based on your wife's current employment since she will not have that job at closing. If you use her current employment and the lender realizes that you are being dishonest they will not lend the money and you will NOT be able to close on your home.

Since your wife does not have a job in Omaha and you are going to be a med student you will have to apply for a No document/No income loan. These loans are for people who do not want to list any assests and are required to put 5% down on the home. The interest rate is usually a .5%-1% higher (sometimes more) depending on your credit rating and you often have to pay a 1 point origination fee, which is 1% of the loan. Now, if your wife finds a job in the meantime in Omaha you can base your loan on that future income and you can get a normal loan. You can go ahead with the No doc and if your wife does find work you can change the parameters of the loan before closing. It normally takes 6-8 weeks to close so that gives sometime to find employment.

I would recommend 80/20 loan or a 80/15/5 loan if your wife finds a job then you won't have to pay PMI, which is going to be additional $50-$75 dollars a month (70,000 - 90,000 house).

If you have any additional questions just ask or PM me. I just went through this entire process trying to buy a house in Pennsylvania moving from Iowa and my wife has not found employment in Pennsylvania yet.

 

[roady]

Hey--
I just found this post fascinating because I am thinking about buying a house too. If anyone has ideas about whether it's better to buy with a wife or solo (since I am getting married soon), please let me know.

I guess I am concerned about all that "she got half the house when they split up" (G-d forbid) stuff. On the other hand, it seems like it wouldn't matter, wife on lease or not--half of everything is hers should a divorce come.

Not trying to hijack this thread, but heck, if anyone can address the cheapest/best way to buy a house with hardly any money and no job (hey! I'm a 1st year med student folks, and the fiance is in grad school for at least the next year and a half!) I would REALLY APPRECIATE IT!

Thanks SDNers!
😀

 

[tryingagain]

Thought I would chime in here.

No, you cannot get a loan based on current earnings. Only future earnings. Trust me, I just went through a mountain of paperwork on that.

Second, you may want to look into what I did. Since I am (obviously) going to have zero income for the next 4 years my lender recommended that I have my parents co-sign with me. I am not sure of the particular plan but my interest rate is an incredible 4%. You have to have loving, trusting parents for this one to work, though.

I think I was approved for something like 145K. Highly doubt I will spend that much though. Hope that helps.

Buying a house makes so much more sense than renting for 48 months, don't you think?

 

[Fermi]

My wife and I just bought a house this year, my second year of med school. I'll confirm the point that you have to provide proof of current employment in the city in which you'll be residing (we looked into it too when we first moved here). With an economy like this, how can the bank take the risk of you closing on your new house and then not finding a job for 6 months?

I don't think there is a big rush on buying the house. Since you're not living in Omaha yet, you can't go looking at houses anyway. If your wife secures a job offer soon, then you can go right ahead since they should be able to use an offer letter (with proposed salary) for the loan app. But you may end up having to move into an apartment with a short term lease so you can conduct your housing search once the job situation is settled. In the meantime, I would:

• research the housing market in the area using local/national websites. Try to find out where you would like to live based on proximity to work/school, price, neighborhood amenities, etc. Try to identify up-and-coming areas where you will hopefully get good value and return on your investment.
• look at things like transportation access, crime, schools, and other public services. Even if you don't care about some of these things now (e.g. schools), other people might be looking for them when you sell the house in 4 years.
• get your finances in order: look over your credit reports, account statements, assets, employment history, and so forth.
• start looking for a realtor and possibly a mortgage lender; try to get recommendations if you know anyone in the area.

Hope this helps. Good luck in taking this big step!

 

[Starflyr]

Just one thing to say....

A house is NOT a short-term investment. My husband and I found that out the hard way. You would not BELIEVE how expensive it is to sell the darned thing! You have to have been there long enough to build up enough equity to cover the expenses. The only reason that we got out of being skinned alive was because his employer is AWESOME. They bought the house from us, then re-sold it (for >20,000 loss) as a part of the move incentive.

We have bought another house. However, we have been in for almost a year, and I plan to complete residency here too, if possible, and maybe even fellowship (6-8 years more). Dont buy a house for just a year or 2. It is NOT worth it! 3 at the LEAST, and pray that property values go UP. Also, if you're going to sell soon, DO NOT buy a new house. You will end up competing with the builder, and you'll get reamed (as many people on our block have found out to their dismay. There are ~20 houses up for sale in our subdivision, and most have only been occupied a year or 2 - but the builder is still building nearby, so the houses there are cheaper AND new).

Star

 

[Mutterkuchen]

Originally posted by Fermi
My wife and I just bought a house this year, my second year of med school. I'll confirm the point that you have to provide proof of current employment in the city in which you'll be residing (we looked into it too when we first moved here). With an economy like this, how can the bank take the risk of you closing on your new house and then not finding a job for 6 months?

I don't think there is a big rush on buying the house. Since you're not living in Omaha yet, you can't go looking at houses anyway. If your wife secures a job offer soon, then you can go right ahead since they should be able to use an offer letter (with proposed salary) for the loan app. But you may end up having to move into an apartment with a short term lease so you can conduct your housing search once the job situation is settled. In the meantime, I would:

• research the housing market in the area using local/national websites. Try to find out where you would like to live based on proximity to work/school, price, neighborhood amenities, etc. Try to identify up-and-coming areas where you will hopefully get good value and return on your investment.
• look at things like transportation access, crime, schools, and other public services. Even if you don't care about some of these things now (e.g. schools), other people might be looking for them when you sell the house in 4 years.
• get your finances in order: look over your credit reports, account statements, assets, employment history, and so forth.
• start looking for a realtor and possibly a mortgage lender; try to get recommendations if you know anyone in the area.

Hope this helps. Good luck in taking this big step!

Thanks to all of you. We have visited Omaha once to find a couple of neighborhoord that would suit us, and have our finances in order.

I think that my strategy will be to contact a mortgage broker and my credit union and just be forthright about the situation. I'll see what they tell me. Thanks for the tips, and I would welcome more, if there are any.

Incidentially, I play on being in the house 4 years or more.

 

[Mutterkuchen]

Originally posted by Fermi
My wife and I just bought a house this year, my second year of med school. I'll confirm the point that you have to provide proof of current employment in the city in which you'll be residing (we looked into it too when we first moved here). With an economy like this, how can the bank take the risk of you closing on your new house and then not finding a job for 6 months?

I don't think there is a big rush on buying the house. Since you're not living in Omaha yet, you can't go looking at houses anyway. If your wife secures a job offer soon, then you can go right ahead since they should be able to use an offer letter (with proposed salary) for the loan app. But you may end up having to move into an apartment with a short term lease so you can conduct your housing search once the job situation is settled. In the meantime, I would:

• research the housing market in the area using local/national websites. Try to find out where you would like to live based on proximity to work/school, price, neighborhood amenities, etc. Try to identify up-and-coming areas where you will hopefully get good value and return on your investment.
• look at things like transportation access, crime, schools, and other public services. Even if you don't care about some of these things now (e.g. schools), other people might be looking for them when you sell the house in 4 years.
• get your finances in order: look over your credit reports, account statements, assets, employment history, and so forth.
• start looking for a realtor and possibly a mortgage lender; try to get recommendations if you know anyone in the area.

Hope this helps. Good luck in taking this big step!

Thanks to all of you. We have visited Omaha once to find a couple of neighborhoord that would suit us, and have our finances in order.

I think that my strategy will be to contact a mortgage broker and my credit union and just be forthright about the situation. I'll see what they tell me. Thanks for the tips, and I would welcome more, if there are any.

Incidentially, I play on being in the house 4 years or more.

 

[Fermi]

Originally posted by Starflyr
Just one thing to say....

A house is NOT a short-term investment. My husband and I found that out the hard way. You would not BELIEVE how expensive it is to sell the darned thing! You have to have been there long enough to build up enough equity to cover the expenses.

An excellent point, Starflyr. Since it took me so long to get into a house, I'll only be in it for 2-3 years. I do a lot of second-guessing as to whether it is a good investment, but when I compare to renting, it still seems to come out ahead. Our payment on a 3+ BR house is about the same as the rent was for our 1 BR apartment. The house comes with extra expenses, like closing costs and utilities, and there will, as you said, be some huge expenses again when we sell (although I have a personal connection to the realtor and I think he's willing to cut the commission).

When second-guessing myself, I have to remember a couple things. First, the money spent on rent is money that you are guaranteed to never see again, while putting equity into a house will at least give you a decent chance of getting some money back. Second, rent increases are pretty much a given, while mortgage payments stay the same. Third, the housing market will probably continue to go up since I'm not living in a hugely price-inflated area; this should increase my chances of breaking even or getting a small profit. Finally, the downpayment+equity in my house is money that is protected from financial aid consideration, so essentially I'll be able to keep that money throughout med school instead of the school draining all my savings by graduation. By selling the house at that point, hopefully I will at least get my equity out in order to purchase another house.

Of course, this is my first house so I don't know if any of this will work out--I pray that it does!

 

[docuw]

Hi JBJ -

I am a 2nd year here at Creighton. My wife and I moved to Omaha two years ago with no house and no job (for her). We stayed at the La Quinta Motel for 3 days while we found a house to rent. Then we spent the next three months looking for a house. She found a great job within the first week (she had contacted the firm before we came out here). We applied for the loan, and got a great one with using her income and also making it known to the lending officer that my Student Loan money was budgeted to cover the cost of housing. Turns out, my wife's income was sufficient to cover our loan, but they were willing to add my loan money in at the time as well.

Also, we have a website set up here for Creighton Medical Student Housing. It has a ton of listings on it. Alot of the M4s are moving right now and selling their homes. The site also has the results of a housing survey (neighborhoods to live in) from last year that I set up on the site as well. Shoot me a PM if you dont already have that site. I can also set you up with my realator - a great guy that took us in like his grandkids.