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  • Home purchase

    i have a question about buying a home. I recently finished residency and am in a partnership tract in a small group in the same area that I did residency and medical school in Tennessee. I'm currently living in the same house we bought in medical school about 8 years ago. My wife is now a stay at home mom but has the potential to go back to work whenever she wants to as a pharmacist. I take at home call about 6 times a month and my house is a little too far away. In the middle of the night I can barely make it there in 25 minutes which is a long time for a stat c section. I currently make 244k plus benefits but that will increase to around 400k plus benefits when I become partner in 18 months. I also have about 180000 in student loans that I refinanced( wish I would have started reading sooner, although I'm still driving the same car I got in high school ha) To get a good safe house in good school district will cost about 550k. I can get a doctors loan but am not sure if I would be stretching myself too thin. I have about 50k in equity in my current home.

  • #2
    What is your question?
    Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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    • #3
      How confident are you in getting partner?

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      • #4
        Question is basically do you think I'll be ok making that big of a purchase? I'm really confident in making partner. This group has a great reputation. Probably the best in town.

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        • #5
           


          Question is basically do you think I’ll be ok making that big of a purchase? I’m really confident in making partner.
          Click to expand...


           

          Got it, thx - what I thought but wanted to be sure. Sounds like you are talking about Williamson County, but that's just where I have most experience. What will the partner buy-in cost you and are they financing? Will it come out of the $400k?

          Without knowing more (monthly budget, size of emergency fund, whether you have appropriate disability/life/umbrella insurance, for example), I'd probably recommend staying put until you make partner, only 18 more months. If something changed, you'd be stuck with an awful lot of debt and your wife could be forced to go back to work, not the best scenario. Or you could end up with an accidental rental - a lot can happen in a year and a half. Possible for you to save enough to get to $125k (20% down + closing, etc.)?
          Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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          • #6
            If the partnership is very likely, then I think you're okay. $244Kx2= $488. A $72K down payment gets you to a $550K house. Alternatively, in 18 months you'll be at $400K. $400K*2= $800K, well within my 2X guideline. Your student loans aren't terrible (about average). If I were you, I'd take my time. For now I'd live like a resident, make big payments on the student loans and/or retirement accounts, and carefully shop the housing market like a shark- you're not desperate to buy and the houses you look at are just stacks of bricks. There's another one down the street just like it. By October, you'll know more about your housing market than the realtors do and you'll probably get that $550K house for $475K, you'll have a bit of a downpayment, and you'll have paid the loans down significantly. In 2-3 more years you'll be living the good life. The house will be appreciating, the loans will be gone, and the nest egg will be rapidly growing.

            So yes, I think you're okay but take your time anyway. There's no rush here.
            Helping those who wear the white coat get a fair shake on Wall Street since 2011

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            • #7
              Thanks for the advice. I really do appreciate it. The only reason I'm contemplating making to move now is because I take at home call. My current home is about 30 minutes from the hospital which is the maximum time my group wants me to be. However 30 minutes is a long time for a stat c section. I thought about a short term rental house closer however most of those are running 2000 or more a month for a decent sized house 1800 a- 2000 sq feet. So I was thinking that it might be ok to go ahead and move. Right now I'm just staying at the hospital until late at night. So that's getting old ha. Thanks again.

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              • #8
                As a neonatologist I recommend request you move closer!   

                Minutes really do count.  I'm about 10 minutes away from my Tennessee hospital depending on traffic lights and that feels like an eternity when they call saying they are coding a baby!

                Financially: it seems you would probably be okay now if you are fairly sure to make partner.  And you would almost certainly be much better off waiting as much as you can, getting downpayment etc...

                But IMHO there are more variables than 'just' money in this decision... how much better will you sleep when you are on call if you are closer?? how much will you wonder - 'what if I lived closer?' after a stat c-section from your current home?  Will your wife be happier if you are no longer staying really late at the hospital because??I think the answers to those questions are very personal... my (more experienced) colleagues for instance seem much less worried about these questions than I do!!!

                Just my $0.02!

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                • #9
                  I am an OB/GYN.  When I first started practicing I lived 11 miles from the hospital which I judged was entirely too far to take call from home. I slept in house for 4 years until I bought my current house which is 1 mile from the hospital.  30 minutes will get you sued.  If you live close you can sleep in your own bed and go in when delivery is soon.  I would not buy a house until I made partner.  I would assume that the hospital has a call room.  Your family can visit you at the hospital or you could go to a nearby restaurant for dinner.  You can use the time in house for reading and CME.  The hassle of sleeping in the hospital is much less than the hassle of being sued over a prolapsed cord or some other emergency. If your hospital has a laborist program then you get by with sleeping at home but I personally would not be comfortable with it.  The reason that I say wait to buy the house is that the group may be very nice to you now but changes are occuring rapidly in medicine and the money that you make as a partner is not the same as a salary.  You might make more or less.  If the group starts to make less money between now and when you become a partner you might not be making 400k in 18 months or they may decide they cant afford another partner.  I say this because I have seen it happen to people.

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