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  • First-time home buyer - my situation, your thoughts

    Long-time WCI fan. Also a long-time renter between med school, residency, and afterward.

    Younger EM attending. Working with an SDG. Not yet a partner. Have about $125k in student loans (started >$200k when refinanced less than a year ago). No other debt other than amounts on credit cards paid in full monthly. Car paid off. No children. Annual salary anywhere from $270k to $360k as is with arrangements as are / productivity bonuses / etc, obviously not including partnership bonuses.

    As one issue, there is some consideration as to whether I'd stay long-term -- but have discussed this with group, can see this happening.

    Have been renting forever. Current rental has been great for its purposes, but I'm increasingly unhappy here. Paying about $1250/mo. Need more indoor space for interests, things I want to do. Has been a "delayed gratification" thing for years in med school, years through residency, and now beyond even my first year out.

    Rental market where I am is not great. Would be fine renting a really nice condo but cannot find any viable options.

    Houses I've found are $400-$450k neighborhood and big for not having kids, anywhere from 2k-4k finished sqft. But would be something I'd enjoy more.

    That said, would it be that foolhardy a proposition to take out a doctor's loan for a house in that price range given this situation? Any other words of wisdom from anyone who may have been in a similar situation?

    Thanks in advance.

  • #2
    Houses are generally money pits.  If I were in your shoes I would look to rent a larger place.  If you are fairly certain you will stay in the area and have a family, the houses you are mentioning may make sense, but even then you will be paying a lot for maintenance, repair, taxes, utilities, interest for a place larger than you need in the near future.

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    • #3
      I don't think delayed gratification really includes med school and residency since you really don't have much to spend anyway.  I think of delayed gratification as "living like a resident" (to quote WCI) for at least 3 years after you graduate and probably more like 5.

      Regarding buying a house, you will likely be around $2.5-3k per month including taxes and insurance, which is a large step up from your current rent.  If you are single with no kids, I doubt you need 2k sq ft, let alone 4k.  I have 3 kids and a dog and live in a 1,700 sq ft house.  If you are not sure you are going to be in this house for more than 5 years and have no plans to expand your family, just rent a bigger place for $2k/month and pay down your student loans with the difference.

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      • #4
        I went through this same scenario recently.  Ultimately, my wife and I decided that we would rather start living comfortably and we bought a nice house.  Delaying these types of things in life definitely have positive financial repercussions, but at the same time, none of us know how long we have left to live on this planet.  Don't wait too long.

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        • #5


          I went through this same scenario recently.  Ultimately, my wife and I decided that we would rather start living comfortably and we bought a nice house.  Delaying these types of things in life definitely have positive financial repercussions, but at the same time, none of us know how long we have left to live on this planet.  Don’t wait too long.
          Click to expand...


          Getting married was your first mistake.  Immediate hit to net worth  :P

          In all seriousness, you don't have to buy to live comfortably, and you really shouldn't buy if you aren't very sure you are going to live somewhere for 5+ years.

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          • #6
            Not when wife makes 350k/yr

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            • #7
              Definitely 5 years is cutoff, though, for whether it makes sense to buy.  At least that's how we thought about it.

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              • #8




                Definitely 5 years is cutoff, though, for whether it makes sense to buy.  At least that’s how we thought about it.
                Click to expand...


                Agree. Transaction costs really eat into short term sales. It would likely make more financial sense to rent at this stage in your life, but I think there is no question that you CAN afford it. It'll likely lead to increased spending in several other areas of your life and can start that hedonic treadmill rolling...but if it makes you happy and you keep watch on your other life expenses it doesn't sound like a terrible idea.

                On the other hand, I'm in a similar position as yourself, but will likely rent for a few years as our housing market has had a huge run up driven mainly by retirees coming to town with their enlarged investment portfolios. A downturn could really soften things up a bit and one of the best things about being a doctor with a steady job is that credit should be easier to come by in a down market compared to many other people. If you can buy a house that you find to be 20% undervalued or so now then I think you can absorb a modest correction without breaking a sweat and might as well just go for it.

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                • #9
                  Take it from someone that did not delay gratification when it comes to homeownership, owning a home is not all that great. And it's definitely expensive. I'm 6 years out from residency and still paying off student loans. If I were in your shoes, I'd keep renting and saving/getting rid of debt. When u end up actually needing more space, you'll be in a much better position to buy.

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                  • #10
                    we too have the house bug but are not quite ready financially to buy.  it helps me to re-read the negatives outlined in the article below every time I start thinking well we could just get a doctor loan...

                     

                    https://www.whitecoatinvestor.com/personal-finance/the-doctor-mortgage-loan/

                     

                    apart from that, if I was a single person, I would not buy a house.  you are so much more free without a house and the burdens that come with it.  rent and be happy to call a landlord and to be able to free to move wherever you want when you want.  buying a house really ties you down to one location without flexibility.  Have you talked to realtors in your area for rentals?  I was shocked at our last move that to find the good places to rent you had to have a realtor as in past cities craigslist etc worked just fine.

                    hope you find a place you love!

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                    • #11
                      If I was single I would not buy a house, especially not a 2k-4k square foot one. We have 3 kids (and pregnant), an au pair (so 3 adults total in the house), and a dog and our house is <3k square feet. It feels huge most of the time, especially when it needs to be cleaned (and yes, we have hired someone in the past but the bigger the house, the more expensive.... just like everything else)

                      What if you do get married and start having kids in the next couple of years? Your house likely will not be the house your future wife envisions as the perfect house!

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                      • #12
                        Lots of threads about this topic.  I know you want a house but if you are not certain you will be staying in your job the answer is clear.  DO NOT BUY A HOUSE! Pay off your loans and work on becoming a partner or joining another group with a partnership track.  When your job situation is settled then buy the house.  I think it is ok to own a house as a single person.  I always did.  I wanted 2 things when I bought my house. Firstly a location close enough to the hospital to take OB call from home and enough yard for a dog. The house I bought was 3200 square feet but it is one mile from the hospital.  When I got married my husband owned a lake house so now the problem is two houses.  So before buying you need to set your goals for the house to minimize the number of houses you  buy/sell.  I have lived in the same house now for 25 years because I figured out what I needed and did not base it on square footage alone.

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                        • #13
                          That'd be a big lonely/empty house with just you in it.

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                          • #14
                            I'd also recommend using a realtor to find a nicer rental for another 1-2 years. That should give you enough time to get a good down payment together, decide if you're going to stay 5 years, and pay down/pay off your loans. And I'm a huge fan of home ownership. I just think that it will feel much better and much less stressful if you go into it from a stronger financial position.

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                            • #15
                              Thank you for the replies thus far. In response to a few points:

                              - I'm working on finding, and have asked my realtor to find, the best rental properties available in this area. The problem I'm expecting to have is that there won't be good options for me -- I'd be willing to share a wall only, but not live in a complex on account of needing the space, etc. I'm looking nonetheless because...

                              - ... any house in the size I've described sure would be big and, at times, lonely. Am with someone but not at the stage of moving in together, and not planning on marriage. There will never be kids in the equation.

                              - My suspicion is that I would be able to begin my buy-in process when eligible next year per talks with group leadership. I will contractually be in the area for a year at least. After that, is there a chance I'll want to leave? Yes, but more likely that I'll stay.

                              The thing to which I keep coming back is the happiness factor. Where I am, we work hard. Very hard. I need more outside of work to be happy -- more of a "work to live" mentality. So I'm trying to find the line beyond just the numbers on the NYT rent/buy calculator where I can internally justify paying for a house and taking on the pain in the neck that is maintenance and repair costs (and having to deal with it in the first place) in exchange for being happier, hopefully, most other times. If I can find the perfect rental place, great, but so far I've not had much luck. Still looking on both sides.

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