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  • Interested in buying a home

    I will be starting fellowship in 7/2018 in a relatively expensive area of the country in the midatlantic. The fellowship is expected to run 3-4 years and is research intensive. There is a possibility, depending on how things go, that I would potentially be able to/ stay at this institution after fellowship. I really hope to buy a house but I'm not sure whether this is wise or affordable. I hate the thought of sinking income into rent which doesn't build equity but my instincts are telling me that I just may not have the income to afford a home and wanted to get some input from more experienced people.

    My circumstances are as follows. I am single and the anticipated income of the future fellowship is ~$4.1K net/month in the first year. I have no medical school debt and my college debt is <20K and low interest. I have no credit card debt and my car is paid off. I have no property except for my car. I have $3K in a Roth IRA and no other investments. My credit history is excellent. I can't count on definite assistance from family but my parents may be able to chip in some "gift money" (?~10K) to help with closing costs if that were to become necessary. The desirable houses I am seeing on the market in the area I'll be working in are all in the 400-500K range. To be clear, these are not mansions. Assuming a doctor's loan mortgage with 0% down, I've been looking at some houses on the market and the expected monthly payment for the mortgage + insurance + tax (no PMI) would be ~$2600-2700. Clearly, this payment would be ~2/3 of my net monthly income and I'm not sure a bank would even offer it? Rent for an apartment or small house looks like it would be ~$1900. That said, I am very frugal and have paid off $40K+ of various debts (credit cards, car loan, student loans) in the past 3.5 years of residency on resident pay with some additional income from moonlighting.

  • #2
    Rent. Lots can change in 3-4 years, including that single status, and the location of the job you're offered. Plus, that's an insane amount of your income to be paying for living expenses.

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    • #3
      My rule of thumb for owning is staying put for at least 5 years. Don’t buy now. Even if you stay in the area you will want a nicer place once your fellowship is completed. It’s much better to save on the amount you are spending every month, and be building up your bank account, then building equity in a house.

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      • #4
        Lots of buzzwords in your post that scream rent.  You're not guaranteed to be there for 5 years, which is roughly the breakeven point.  While you have done a good job paying down loans, you seem to be cash-poor.  That house price point is way too high for your salary.  You're single.  What if you meet someone and they have a house too?  There are a lot more costs to owning a home than just the monthly payment.

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        • #5


          I hate the thought of sinking income into rent which doesn’t build equity
          Click to expand...


          Agree with renting based on your timeframe of 3-4 years and income. Renting isn't sinking income--it's providing you shelter, which is very much necessary. Do you feel like every time you eat food, you are sinking income without building any equity?

          It is also super flexible and won't tie you down, which is a big plus when you're busy with fellowship and then coming out of fellowship when you'll be able to look for jobs anywhere.

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          • #6
            i say go for it. buy a 500K house. then post back here and let us know how it went.

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            • #7
              Your future is too uncertain for me to buy if I were in your shoes.

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              • #8
                There are lots of threads about this topic.  The general rule is to buy after you have completed fellowship and worked a job for 2 years.  You need a down payment saved up as well.  So no don’t buy before you even finish residency.  RENT!!!

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                • #9
                  https://www.whitecoatinvestor.com/forums/topic/new-attending-pre-tax-versus-post-tax-contributions-for-first-year/page/2/

                   

                  It worked for this guy....

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