Help buying first home

[jxl200]

Hi all, I'm currently a second year resident. My parents wanted to help me out and buy a home in the area I'm living. We just closed on a new house (410k), and now I am looking at different mortgages. I've been reading through a few different resources, but was hoping to get some help.

About me:

• Not too much debt - I have a 60k interest free loan that I gradually pay off over 10+ years (1% first year, 3% after 3rd year, etc.). Otherwise, I have 5k in college loans that I'm going to pay off soon.
• Parents are going to help with a ~60k down payment on the house.
• Bought a house in a relatively up and coming area - the Triangle (NC).

Questions:

• Should I stick with a physician loan or do a conventional loan with the down payment?
• How do I get the best possible mortgage?
• Any other things I should know / read as a first time house buyer?

Thanks for any tips!

[justlearning]

why the rush to buy a house in residency? Do you know you will be in the same area and have a job lined as an attending once you done?

This is a really good resource about home buying overall;
https://themortgagereports.com/guide/buying-a-home

if you can get a no PMI physician loan then that physician loan is good. Otherwise 20% down conventional would be best in general.

Good Luck!

[CordMcNally]

1.) Buying a house in your second year of residency is not a good decision at all. I bet Mom and Dad will help you when you're ready in the future.

2.) What do you mean you just closed on a new house? You just bought one and you want to buy another one?

[Gamma Knives]

This is quite confusing as I don't understand how you could close on a home without financing.

A parental down payment may not qualify you for a conventional mortgage (I am not certain but sometimes banks are funny about gifted down payments). Are your parents cosigning? I wouldn't think a bank would give you a $410k mortgage on a resident income.

As far as best mortgage you can shop around. You probably are not going to own the place long enough to consider paying points for lower rate.

Having said all that I must throw out the obligatory caution of it is rarely a prudent choice to buy a house during residency. Even more so a $410k home; this sounds like a very bad idea for a resident.

[jxl200]

1.) Buying a house in your second year of residency is not a good decision at all. I bet Mom and Dad will help you when you're ready in the future.

2.) What do you mean you just closed on a new house? You just bought one and you want to buy another one?

I just signed the contract on my first house.

[jxl200]

This is quite confusing as I don't understand how you could close on a home without financing.

A parental down payment may not qualify you for a conventional mortgage (I am not certain but sometimes banks are funny about gifted down payments). Are your parents cosigning? I wouldn't think a bank would give you a $410k mortgage on a resident income.

As far as best mortgage you can shop around. You probably are not going to own the place long enough to consider paying points for lower rate.

Having said all that I must throw out the obligatory caution of it is rarely a prudent choice to buy a house during residency. Even more so a $410k home; this sounds like a very bad idea for a resident.

My parents are not cosigning. I was able to get a loan for 410k with the physician loan route. I basically don't have any debt so I think that's the reason why I was able to get it.

[jxl200]

why the rush to buy a house in residency? Do you know you will be in the same area and have a job lined as an attending once you done?

This is a really good resource about home buying overall;
https://themortgagereports.com/guide/buying-a-home

if you can get a no PMI physician loan then that physician loan is good. Otherwise 20% down conventional would be best in general.

Good Luck!

No, I don't know if I'll stay in the same area yet. I know I'll be around for the next 3.5 years at least, though. I'll be renting out the house during residency (3 bedroom) and probably afterwards if I don't sell.

[StateOfMyHead]

I don’t recommend buying during a seller’s market if that’s happening in your area as it is here or during residency but since you are considering it a rental property the current interest rates are in your favor. You will likely end up ok financially provided you don’t get in a jam and have to sell at an inopportune time. I hope you understand what a time suck having this type of investment will be. Overall I’m definitely in favor of rental properties but it is crucial to make a thoughtful selection. Best wishes!

[CordMcNally]

I just signed the contract on my first house.

You just signed a contract but you don't have your financing all lined up? I'm assuming you have a spouse that has a decent income?

[Gamma Knives]

So the situation is that you have a house under contract and have a pre authorization for a physician mortgage? Closing means the deal is done; you have a mortgage and the seller has their money.

If you have not closed you can check with various banks to see what offers you can get. If you have multiple offers and aren't sure which is best, put up a post.

[jxl200]

So the situation is that you have a house under contract and have a pre authorization for a physician mortgage? Closing means the deal is done; you have a mortgage and the seller has their money.

If you have not closed you can check with various banks to see what offers you can get. If you have multiple offers and aren't sure which is best, put up a post.

Yes, that's the situation. I got a pre-approval document but am working with several different agents currently now that I have the signed contract.

[JBME]

My parents are not cosigning. I was able to get a loan for 410k with the physician loan route. I basically don't have any debt so I think that's the reason why I was able to get it.

you wrote you have $65k in debt. You are poorer than the homeless person on the street. And yet you say "I basically don't have any debt." But you do! The dismissiveness of that debt (the writing tone seems dismissive) really concerns me. How long is your residency? Usually you need to live in a place for at least 3-4 years just to recoup closing costs. The fact that you did this second year instead of first year likely makes it an even worse decision.

How many hours a week do you work? How will you address a broken appliance in your home and the fix-it person says he'll be at your house between 8 and 12 but then shows up at 1 and it's a 3 hour job? Or worse, a broken pipe that floods your home so it's an emergency. serious question.

That said, I'll grant you the Triangle Area is very up and coming and housing prices should continue to rise off of their current high values in that area

[Tim]

You will not like this recommendation. Apologies.
You have not closed on the house. That means you have the potential option of avoiding what may be a mistake.
Buying a house in residency is an unnecessary risk for a resident. Simple point is it is not to late to back out. It may cost you something, but that would be acceptable to cut your potential losses.

Here is a "way out metaphor":
Your parents suggest you get married. Pony up for the wedding. "Together" you pick out the bride. Now you are engaged. You are left with a bride and a contract during residency. Now, who is responsible if it does not work out? I would strongly suggest that this approach is flawed. Call off the wedding and cut your losses. A divorce is much more costly. Thinking of "renting her out" or "selling her" is rationalization. You don't know where you will live or your path. Stop relying on the parent's good intentions from YOU making a mistake. Don't get married and you don't have to deal with a divorce.

Don't finish buying the house and you won't have to sell it. Simple solution to avoiding potential problems. You don't need to take this risk. Your decision, not your parents. They have good intentions. You need to not buy a house that "we" selected.

[Turf Doc]

you wrote you have $65k in debt. You are poorer than the homeless person on the street. And yet you say "I basically don't have any debt." But you do! The dismissiveness of that debt (the writing tone seems dismissive) really concerns me. How long is your residency? Usually you need to live in a place for at least 3-4 years just to recoup closing costs. The fact that you did this second year instead of first year likely makes it an even worse decision.

How many hours a week do you work? How will you address a broken appliance in your home and the fix-it person says he'll be at your house between 8 and 12 but then shows up at 1 and it's a 3 hour job? Or worse, a broken pipe that floods your home so it's an emergency. serious question.

That said, I'll grant you the Triangle Area is very up and coming and housing prices should continue to rise off of their current high values in that area

The homeless person quip is sooooooooo silly. It’s just semantics. 10000000% people would agree you’d rather be the resident with barely any debt than a homeless person. So the quip is pointless

60k debt is a rounding error for a physician. As long as they pay it off a few years after residency it doesn’t matter.

I probably wouldn’t buy a place as a resident but unless this person makes terrible decisions with their money (and buying a house doesn’t count as one) they’ll be very wealthy. Not having 400k in loans is and getting 60k from the parents certainly helps!

[JBME]

The homeless person quip is sooooooooo silly. It’s just semantics. 10000000% people would agree you’d rather be the resident with barely any debt than a homeless person. So the quip is pointless

60k debt is a rounding error for a physician. As long as they pay it off a few years after residency it doesn’t matter.

I probably wouldn’t buy a place as a resident but unless this person makes terrible decisions with their money (and buying a house doesn’t count as one) they’ll be very wealthy. Not having 400k in loans is and getting 60k from the parents certainly helps!

#1, the OP is not an attending physician. $60k debt for a resident is not rounding error. OP suggested stringing one of those out 10 years. mistake. As I said, hard to tell tone on the internet but the OP's words to me suggested a "well having debt is no big deal" attitude. Prioritize getting out of debt over a house during residency. If the OP said he/she was saving for a down payment then that is fine but that's not the situation here.

Buying a house as a resident is a terrible decision. Much better uses for the money to build wealth faster. Not to mention as I also said, if there's a repair that needs to happen and the OP is working normal resident hours, how is fixing an emergency at home going to work when you're 2 hours into your 24 hour shift?