What were they thinking?

[spotty_dog]

Ugh. So between one thing and another, we both went running around making assumptions about our budget and never actually paid any attention to the details. So I ran some numbers yesterday and I don't think we can pay so much as rent and bills on DH's salary, let alone extras. I'm kind of freaking out, and REALLY regretting that we rented the house that costs half again as much as our last apartment.

BUT...our rent payment is roughly the same as the mortgage payment on the loan that was offered to almost every new resident through Bank of America. So I guess some bank actuary (or whatever they are) somewhere thinks my budget should work! I don't get it! We have like $100/month of extravagances like cell phones and internet, and we spend way too much on groceries and pet food, but we don't have expensive habits or hobbies like shopping or getting haircuts.

What do the mortgage lenders know that I don't?

I'm betting that they've given a lot of consideration to assets such as car equity, stocks, etc. that you could liquidate (but never anticipated doing so) to make the monthly budget.

I got somewhat of a suprisingly high tuition bill the other week. That puppy arrived right before we headed out on vacation. Thought it was a mistake. Did a little research and found out it was because DW had loaded up on a bunch of rotations in this first semester. Nice.

Hope things get better soon.

[spotty_dog]

I'm betting that they've given a lot of consideration to assets such as car equity, stocks, etc. that you could liquidate (but never anticipated doing so) to make the monthly budget.

Well, yeah, I could buy that if it were just us because we do in fact have some resources squirreled away (that belong to DH and that he apparently doesn't intend to tap just yet). But *every* resident I heard from was offered the same deal! Regardless of housing market or debt load or local cost of living.

Car equity, huh...nah, I'll want the station wagon when the baby comes, better not downgrade.

I got somewhat of a suprisingly high tuition bill the other week. That puppy arrived right before we headed out on vacation. Thought it was a mistake. Did a little research and found out it was because DW had loaded up on a bunch of rotations in this first semester. Nice.

The simplest things can throw a budget all to hell! Hope it gets squared away.

Hmmmn....gosh, I don't know what to think about everyone getting the same deal (other residents). Just another guess but maybe they've crunched numbers somewhere that made them confident that the vast majority of residents could find dough somewhere if necessary (say family assets that wouldn't show up on paper) and that very few residents were high default risks (for that and other reasons)?

Another thought I had was wondering if the numbers they provided were based on the job you had before you relocated plus DH's promised resident salary which would lower your debt-to-income ratio?

Well, I hope things will get better than they appear right now.

[PrincessFiona]

Alison,

We saw the same trend during residency/fellowship and I was sometimes blown away by what some people were able to afford during training. Many of them had family members that helped with down payments, etc...BUT...you would be surprised at what banks are willing to finance.

When we decided to buy, we were approved for $100k MORE than the house we ended up buying and the cheaper house was a stretch for us financially. There are banks that hear 'dawkter' and will hand out loans that are above what you can actually afford.

I hope your money tree starts blooming again soon. :>

kris

[Stella]

I used to work in the mortgage industry and yes, things do get stretched. We were able to fund teachers on 30K salaries on a $275K home. Go figure! I could never afford a house with what I make, but things like utilities, gas, food, cell phones, ANYTHING really that is not a home loan, car loan, or credit cards, do NOT get counted. So seeing as that is where most of my expenses are, it seems like I can afford a lot more. Oh well!

[samssugarmomma]

Alison - I hope you got your budget straightened out. I was hoping that I'd finally get to be a SAHM during residency, but it's not looking likely. I'm headed back to work as soon as I can find a decent job and a good daycare.

[spotty_dog]

That's a bummer.

I think we're going to get it straightened out by hook or by crook. I'm not currently planning to go back to my job after the baby.

[houseelf]

Spotty Dog,

I'm so sorry for you predicament. I have no magic solution but I know that you'll get through this. Somehow we all do.

I know people make it through residency on one resident income, but I don't see how. We maxed out our credit cards and I worked full/part time.

I hear you, Ladybug, I hear you. I honestly wonder how people do this. Maybe because DH abides by the moonlighting rules this hurts us? I don't know.

But back to the topic of hand, this should be a "golden rule" for medical families: THOU SHALT NEVER BUY A HOUSE FOR THE MAXIMUM AMOUNT OF MORTGAGE FOR WHICH YOU ARE APPROVED. This means YOU! No exceptions. Really. Yes, you.

It is soooo tempting, believe me. I'm trolling realtor.com almost every day now. However, I'd rather live in a shanty than have something else to argue about.

Kelly

[DCJenn]

Amen, Kelly!

nor shall one buy a car for the maximum amount one is approved for! Our bank keeps sending us "you've been approved" memos stating that we're currently approved for a 50k car. OK, that'd be great- except we'd be living in it so it better be big.

Jenn

SHALT NEVER BUY A HOUSE FOR THE MAXIMUM AMOUNT OF MORTGAGE FOR WHICH YOU ARE APPROVED.

Amen sister Amen!!Nothing quite as bad as having a house with whole rooms unfurnished or without window treatments because you can't afford it after the mortgage and utility bills.

[MissCrabette]

It's ridiculous what lenders do these days. Just this week I asked one how the physician mortgages work and I'm sorry I asked. Basically he told me that they would put down the salary that a doctor would get out of training and that when the guys who check employment and stuff call your employer, all they do is verify that the doctor actually works there, no salary questions are asked. I personally thought that was illegal and unethical but that's just me.

Basically I think it depends on the broker. I just saw someone from Bank of America and the gent was really great at showing me the real numbers we need to make things meet.

I too am looking to add a little extra cash by babysitting. But honestly we aren't living large in med school. We really won't be living on much more, and since we are hoping for a home we are expecting to live just as tight.

It's hard, really hard. Right now we are adding all the high cost things we need to get done before residency, and just take the extra loans out for, and hope it helps out the first two years at least in residency: glasses for both of us, a butt load for dental work, new tires for cars, new washing machine (sigh... did not see that coming),

We're currently working on our bugget to try to fine tune it - sucks to live to the penny. I work my butt off to make just a little extra $ by selling my clothes, kid/baby clothes, books, on ebay or resale shops - anything we aren't using. Sometimes I think it's more work than it's worth, but just made $40 back on the kids clothes last season. It doesn't sound like much but it's something.

My DH is going into EM as well. At least it's a shorter residency than many. Honestly I feel lucky. Anyway you're not alone, it's quite overwhelming.