First Home/First Mortgage/First Year Resident/First Baby

Hi everyone,

I'm a new member and have just read previous posts regarding homes/mortgages/finances, and WOW...my husband and I have a LONG road ahead. :| :|

First off, we're expecting our first baby in June 2006 :@ ; he's starting residency in Wilmington, NC the same month; AND we're relocating from Florida to North Carolina to look for a house (if possible), so this is the year we have a bunch of "firsts."

Since he's so busy with being a medical student, I'm responsible for all the "life" stuff, so I've been researching homes and mortgages, costs of living in a different city, etc., in hopes we could buy our first home. Currently, we rent in FL ($925 for a studio in Fort Lauderdale) and we're tired of throwing money away to rent.

Here's our predicament. He will be doing PGY1 IM in North Carolina, and the rest of the residency (neurology - 3yrs), will be in San Diego, CA. We would like to purchase a home in NC, but we will only be there for 1 year. A friend of mine who is a realtor says we should try to look for a condo in a good area with good appreciation, and yet others say we should just rent because it would be a nightmare to try to sell something in a short amount of time. We've never bought a home before, so we don't know what to do!!!!

In the meantime, I've been shopping for different mortgage loans, primarily Doctor's Loans. I called Wachovia, and they were suggesting a 3/1 arm at 6.5%, with 3% down. We were pre-qualified for $150K based on my husband's good credit score, no credit card debt, student loan debt of $170K, and his contract with NC to start at $43K a year. We really don't want to put anything down - if that's even possible so we can use that money for the new baby and the relocation costs. Although I'm currently working, I have pretty high debt, so we don't want to use me in the whole mortgage application. I'm still in the process of shopping for more lenders such as Bank of America and Tower Mortgage for Physicians.

Now that you have a background on our situation, I have a few questions...

1) Should we rent or buy in North Carolina? If we buy, we hope to sell the home with a good appreciation value. If we rent, we hope to save as much as possible so we could put a down payment on a house in San Diego, which I hear is almost impossible to buy a home, so this may all be just a dream for us. Is it even possible to "save" money when only 1 person in the household is working?

2) Regarding mortgage lenders, are there any others out there besides BoA or Tower Mortgage that offer doctors loans?

3) Have any of you had experiences similar to ours? If so, what did you do, and do you have any regrets?

Thank you so much in advance. I really appreciate any advice / past experiences that you may have.

[spotty_dog]

Eek, I look forward to the responses because we're in a similar situation, except that we will be in the same place for three (maybe four) years. :\ Also, since my hubby's a happily unengaged fourth year (currently has one week left of actual schoolwork, which is radiology so he hardly counts it anyway), it looks like he's starting to re-take the reins of making these decisions and such. We'll see what happens after the match.

Good luck, and congrats on the new baby to be!

[mommax3]

I am not an expert on this by any means, but if I were you, I would plan on renting for the next four years. I know, not what you wanted to hear.....but I don't think any home you would purchase in NC would appreciate very much in just a year, and from what I have heard about CA real estate...... I think you would have a hard time finding something to buy that you would be happy with. We have some members who have lived in CA, so hopefully they will weigh in on this.

Welcome, and congratulations on all of the exciting things you have coming up!

Sally

[PrincessFiona]

Welcome...and all I can say is "RENT". As enticing as it might be to buy for a year, you will end up being subject to Capital Gains tax and more importantly, you will have the headache of basically moving in and then putting the place back on the market. There is no guarantee of appreciation and if you don't sell before you move, you may be stuck not buying in San Diego and with a mortgage on a house in N. Carolina that you can't get rid of.

Too risky for my tastes!!!

kris

Welcome to the boards!

I just read an article about the real estate market and the changes from last year to this year. It actually listed Wilmington NC and over the last year the avg home price on the market fell by about 10%, from about $230K to about $210K.
You can never "expect" to have your home appreciate, we(as a country) have been in a market lately that has allowed many people to make money on real estate. It is changing, some areas very quickly, others more slowly...and not all are declining or leveling off.
As un-fun as it is, renting would be the best choice for living somewhere for one year...

[Cumberland]

We got a SunTrust doctor loan. Our mortgage lender has been very very helpful-I would be happy to refer him if anyone wants to use SunTrust. I had looked into BoA-it was pretty much the same terms.

We also got advice from a financial planner who told it was not smart to buy unless we were planning to be there for at least three years.

Good luck with your decision!

You are taking a big financial risk if you plan on buying for only a year. Were I in your position, I would rent.

[Vishenka69]

I agree with those who say RENT, at least in NC. I doubt you'll gain anything but a headache by buying for just one year. CA real estate market might change by the time you're ready to move there or it might not. We've been renting all through residency because it's cheaper than buying. If we bought an apt, it would be smaller than the one we have right now and we'd be house-poor. Buying real estate doesn't always make financial sense.

[SuzySunshine]

Yikes is right - welcome to the boards. I have to agree with the renting for one year IMO buying is a huge risk.

As for San Diego, my BIL lives there and bought a tiny 1,000 sf "condo" which is really just an apartment for a lot of money. I'm talking three times what we paid for our 1,800 sf house with a yard (in MN).

Sorry to be a downer on your first question to us.

Just one year? Oh, yeah rent!

You'd be spending your whole year unpacking, then staging and packing. No time to enjoy the house.

Rent, rent, rent, rent, rent!

We're in our first year OUT of training, have moved to KC, and STILL own our house in Cleveland Heights. No guarantees on selling, or appreciation, LET ALONE the total headache of having a house on the market with a new baby.

Good luck with the baby and all of your exciting / crazy changes!

[DCJenn]

For one year- rent.

for years 2-4- depends entirely on how much you think you'll be able to handle mortage wise. It's people like us (transient- who the interest only loans are designed for- that's what we have here in DC because we knew we'd be leaving. If you think you can afford to buy something in CA then do it. Wlimington, NC is nothing like the hot market of the of rest of the East Coast, or the rest of NC for that matter.

There are plenty of lenders willing to work with physicians, too.

Jenn

I agree what everyone else said...rent for the first year. We moved to NC from Southern California a year and a half ago. I have no idea what the market is like in Wilmington, but where we are (an hour south of Raleigh) house appreciation rates are around 6-7% a year. We are in a little touristy town, so I am not sure if those rates are reflective of what is going on in the rest of the state or if they are higher/lower. When you figure in all of the fees you would have to pay when buying and selling your home, you would have to be in the house for at least 3 years to come out ahead (assuming appreciation rates are the same in Wilmington.)

As far as San Diego, I hate to be a downer but unless the market takes a serious dive (which is very unlikely), you probably will not be able to afford to buy anything during residency. Heck, we have friends in San Diego who are in their 2nd & 3rd years out of training and they cannot even afford to buy there. I heard recently that the average house in San Diego is going for about $300 sq/ft. That said, if you can find a way to afford a home in San Diego, then go for it.

If you do decide to buy in NC.....we went through Wachovia for our home loan. We went with a doctor's loan....no down payment, no PMI, most of the closing costs were waived. When we were searching for a lender, I spoke with a mortgage broker in Charlotte who specialized in doctor loans and she was very informative. I think she was going to get us a doctor's loan through Wells Fargo. We ended up going with Wachovia because they offered a lower interest rate. If you are interested in speaking with this broker, I can dig through my files to see if I still have her contact information.

Hello again.

I just read all the replies. Thank you so much for your advice. Deep down, my heart told me that it would be better to rent, but its so hard to think about because we want to start our lives with new home, new baby, new location, etc. I know our lives really won't start until we're financially "ok." So, I think we will look to renting.

Thanks again for all your help everyone!!!

I couldn't agree MORE with what you wrote, Tara!