Hello. My fiancee works in finance and makes $40,000 gross per year. I am a 2nd-year medical student. Currently, we live in a bungalow that costs $650/month and have no outstanding credit card debt or car payments. We are planning to move when I begin residency; at that point, I will be making $50,000/year, for a combined income of around $100,000 at that point. My question is, in what price range should we be looking for a house? My income as an M.D. resident will be $50,000/yr, as I stated, but that is for 4 years. After those 4 years, my income will instantly jump to $300,000/yr. Also, the reason we initially purchased such an inexpensive house (our bungalow) is so that we could save money in the meantime for a larger down payment on our next house. Thus, we should be able to put down around $25,000 on whatever house we purchase next. I will have around $200,000 in student loan debt, but I can certainly select a monthly payment plan that will make my payments quite minimal during my residency.

Finally, my medical school offers me $20,000 in loans for living expenses each year (at 8% interest). I always decline all of it, but I was wondering whether I should take some of that out during my last year of medical school in order to produce a higher down payment. However, I've suspected that may not make sense because then, when we go to apply for the loan, the bank will just see that I have a larger amount of loan debt and be less willing to offer us a large home loan - correct? Thank you in advance for any help you can offer.

First if I may talk frankly here Dr. My dad is an MD and my brother is a DDS. You have not stated if you will move after you complete intern? If you will move then only take the money for the down where you intend to live. Now some Docs aree on the rural training program for 3 years as it now states you part of that? If not you thinking of going in with a cliinic or on your own?
Now if you can purchase at this time where you are staying perminatly then you should still have 6 months before student loans become due. If you can take a night course and extend the repayment period you should do that till your income will increase. So at 50,000 x 3 yrs the range you are talking is 125,000 to 200,000 on the house.
If you do not have kids which means none in the oven. My nephew did this and then at the 5 year time sold and built to own. He is a paradonist and I do not know the initials but his wife is a DDS (longhorn and the rest of us aggies) The 5 years gave a little investment back.
Hope this kind of helps but remember for every 10,000 paid that is 100 off the monthly bill roughly. Also if you both are not on the house then the other can do a first time buyer but that is cutting hairs. Talk to your accountant and get one on retainer, you can afford that and incorp yourself. Do those favors for you,.

....I'll get back to this thread to throw in my 2 cents after I stop crying from laughter...

"If you do not have kids which means none in the oven."

__________________
Gary Spicuzza, *SAFE
Copyright 1956.
No Rights Reserved.
*Self Appointed Financial Expert

Okay, where was I?
Oh yeah, financial planning for an M.D?

Well, whether you are a street walkin' workin' girl or THE President of the United States of America the things you do for financial success are the same to wit:

The Truth About Money.

Money is plentiful for those who understand the 7 simple rules of its acquisition.

#1) Start saving.

#2) Control your expenditures.

#3) Guard your money from loss.

#4) Safely earn money on your money.

#5) Make your home a profitable investment.

#6) Insure a future income.

#7) Increase your ability to earn more money.


The Five Laws of Money.

#1) Money comes in increasing quantity to any person who will set aside not less than 10% of their earnings to create an estate for their future and that of their family.

#2) Money grows diligently and contently for the wise owner who finds for it profitable, safe and reliable investments.

#3) Money stays with the cautious owner who invests it under the advice of those wise in its handling.

#4) Money slips away from the person who invests it in businesses or purposes with which he is not familar or which are not appoved by those skilled in its keep.

#5) Money flees from the person who would force it to impossible earnings or who follows the alluring advice of tricksters and schemers or who trusts it to their own inexperience and romantic desires for investments.

Best regards,

__________________
Gary Spicuzza, *SAFE
Copyright 1956.
No Rights Reserved.
*Self Appointed Financial Expert

What's the rush on buying a house? No one can tell you, when you should buy a house. It's all about financial security and feel. Some people buy a million dollar house with 100,000 down. And some only feel comfortable buying a million dollar house with 800,000 down. It's all up to what you and your fiance are comfortable with.

I will say though, you need to be sure that you want to take on a considerable amount of debt while only making 100,000/year for a few years. If you don't want to take on that debt after being debt free for so long...then don't buy a house. Just get a bigger apartment/bungalow.

Bumping to the top of the board because I liked my post!

__________________
Gary Spicuzza, *SAFE
Copyright 1956.
No Rights Reserved.
*Self Appointed Financial Expert

Gary, you crack me up.