Buying a House

#1

I will be starting at Mayo Medical school this August. Right now I am single, work full-time (and more) and earn about &#3655,000 per year. I do not own a home, but rent. I plan to use a mixture of savings and loans to pay for medical school.

I am thinking of buying a house in Rochester, Minnesota for use while in medical school. Is it possible (and reasonable) to buy a house now, while I still have a decent income so that I can qualify for a mortgage, and then use a mixture of student loan money and my savings to pay the mortgage once I am in medical school and without an income? I am not talking anything extragavant. I could easily put &#3615,000 down on an &#3680,000 house (they do exist in Rochester as I have started looking on-line) and be left with a mortgage payment of less than &#36500 per month.

Will home ownership be too much of a headache (as compared with renting) for a single guy?

Any comments or suggestions regarding this? Thanks…

#2

I can think of several reasons that buying a house is a great idea if you can pull it off. You can give your rent money to the land lord or you can “invest” it each month as mortgage. We bought a condo in Pittsburgh that has appreciated quite a bit in the three years we’ve been here. Your house can also be a source of income. If you can stand it, consider renting out a room or two to homeless classmates. Of course thats just my humble opinion.

#3
Quote
Quote: from mpp on 6:16 am on Mar. 9, 2002
I will be starting at Mayo Medical school this August. Right now I am single, work full-time (and more) and earn about &#3655,000 per year. I do not own a home, but rent. I plan to use a mixture of savings and loans to pay for medical school.

I am thinking of buying a house in Rochester, Minnesota for use while in medical school. Is it possible (and reasonable) to buy a house now, while I still have a decent income so that I can qualify for a mortgage, and then use a mixture of student loan money and my savings to pay the mortgage once I am in medical school and without an income? I am not talking anything extragavant. I could easily put &#3615,000 down on an &#3680,000 house (they do exist in Rochester as I have started looking on-line) and be left with a mortgage payment of less than &#36500 per month.

Will home ownership be too much of a headache (as compared with renting) for a single guy?

Any comments or suggestions regarding this? Thanks...

Hi there,
I believe that the rule goes something like this: If you are going to be in a location four years or less, renting is about the same as buying. If more than 4 years, it makes more sense to purchase a home.

Homes look downright reasonable to me in Rochester, MN. Keep in mind, that I am coming from Washington, DC where housing costs are very expensive. You need to know exactly what your budget will be and how much your mortgage will be. If you decide not to do a residency in Rochester, what will you do with your house? What will happen to your house if you don't make it through medical school? While rare, this does happen.

Condos turn over much faster than houses and are very available in Rochester. If you purchase something, make sure your commute to school is not too long. As you know, the winters can be rough and transportation can be brutal if you have a long commute. There was no traffic to speak of there but the two snowstorms that I did experience kept all except the 4 x 4s off the road.

Try to get up there early and get a copy of Mayo's classifieds. Residents who are finishing and wanting to unload their houses will advertise there. Around the end of June would be an excellent time as the big turnover occurs then. If I end up back in Rochester for residency, I will probably buy at least a condo.

If you get a townhouse or larger, you can always consider sharing with a classmate or an incoming resident who wants to rent. Renting to a colleague works well because they understand your needs for relative quiet and hassle.

Good luck
#4


A similar thread to this ran on SDN within the last month. At that time someone mentioned they had had good luck using www.physicianloans.com to secure a mortgage even with letting them know they were going to be a med student with no income. The poster said this company was familiar with the vaguries of medical education and were quite helpful. I took a note of it at the time for my own reference but have not used them so cannot endorse them myself, but thought it worth mentioning incase you run into difficulties securing a mortgage.

I have yet to decide whether this will be an option for me or not. I am not sure I wish to go through all the buying and re-selling if I only plan being somewhere for 4 years. I think it would be different if we had kids :) Good luck whatever you decide

Alex

#5

I am in a similar situtation. I am buying a house near UTMB. things are a little different because I have a wife and daughter. Personnaly, if I were single, I would not be buying a house. Also, remember that a house payment of &#36500 does not mean a monthly payment of &#36500. You have to add a couple of hundred dollars for taxes, insurance, etc. My &#36500 mortgae is going to come out to over &#36800 per month.
The mortgage officer that I talked with told me to finance the house as a second home, and close before quitting my job. That allowed them to count my current income. This sounded a little shady to me, but other mortgage people I spoke with said it was a good idea. We were able to qualify this way without a problem.
You might want to talk to a mortgage officer and see about prequalifying for a loan. You can get them to give you an idea about how much they will loan you and how much your total monthly out of pocket will be.

Good Luck!!

Trey wood