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Posted

I have recently accepted to a 3-year MS program, and I'm thinking about buying a house in the area. I know there are several topics on this already, and I have read through each one thoroughly. I am re-posting because I am really looking for grad students who have experience with this, and whether it has worked out well for them or not. Like many others, I don't like the idea of paying rent for 3 years, and walking away with nothing, but I do realize the added costs of owning a home.

It's been about a year since the other similar topics. I'm looking for some fresh opinions, since another year has gone by with the housing market being relatively low, yet it does not seem as though the economy is going to improve in the near future.

The area that I will be living in would allow me to buy a place in the $80,000 - $120,000 range, and I plan on living alone although I may consider renting out rooms if I need to.

Any thoughts?

Posted

I don't have any advice, but was wondering if you could link me to the other threads on this topic. I got into an MA/PhD program, and could potentially be living in the same town for 5 or 6 years. The cost of living is very low there, and we could find a house anywhere from 50k to 80k. If my girlfriend can find a job that pays well enough, we might end up buying (mortgage would likely be much cheaper than the usual rent on a 1 bedroom apartment).

Posted

breakfast, here are two relevant topic links. If you want to see more, just type "buying a house" into the search box at the top right of the page and lots of useful information comes up.

Posted

I bought a house this fall, when I entered a PhD program. The area I am living in has an extremely inflated rental market, but house prices were low. It seemed like a good time to buy, because the mortgage payments would be comparable to rent. I went into it thinking that once I left the area, I could rent the house out.

I don't have very much advice, but I was caught off guard by a few things. The main issue was how much time everything took. The initial process was a ton of work. Going house-hunting, writing up several offers, collecting documents, scanning/faxing/mailing tons of paperwork ate all of my free time and interfered with my work schedule. Dealing with the mortgage paperwork was a nightmare. The time crunch continued well after the purchase, with getting set up with oil delivery, insurance, the deed, etc. Initially I was weighing the pros and cons in terms of cost, but I never thought about the relative cost of my time, and that was a mistake.

I'd be glad to talk more, PM me if you have any specific questions. I definitely don't regret it, though, even as I'm up to my ears in remodeling!

Posted

I have a related question - I was just accepted to a phd program, my husband and I currently own a home, and ideally we would like to sell it and buy something while I'm at grad school (I'm a "mature student" - so I understand the costs and challenges of home ownership, just hate the idea of pouring money into rent for 5 years if we could buy!). But with a student stipend and a husband looking for work initially, I'm not optimistic about getting approved for a mortgage. Anyone know if the stipend can be considered income? My bank didn't seem to think so, but they didn't seem to have much experience with this situation. If not, maybe we would be better off renting for the first year while my husband figures out his job situation?

Any wisdom most appreciated!

Posted

Just be aware that owning a house can be an expensive proposition. It's certainly worth it, but you have to pay taxes, you're responsible for your own repairs, you'll likely pay more for utilities, etc. And I'd say forget those that say the interest deduction is worth it. It's not if you truly understand the math at the prices you're looking at (I haven't been able to deduct my mortgage interest in 5 years because the standard deduction is higher every year). As for renting, I'm willing to bet you'll piss off everyone of your tenants since you'll be there to see every time they don't take care of your house. "What???? You put a 1/4" hole in my wall to hang a picture?!?!?!?!" Finally, you're not going to be able to get out if finances take a dive. You can literally walk away from an apartment and not suffer much beyond a lost deposit. A house that falls through ruins your credit for a VERY long time (more than 7 years, because the bank will pursue you for a year or two after you fall).

I say all that just so you know some of the dangers going in. That being said, owning a house is awesome. If you have the finances to do it and don't foresee the need to move in the next 5 years, go for it! :)

Posted

While I do not own a house, but I do own a condo.

In terms or property taxes: these are usually paid out of the escrow account and you pay them along with the mortgage payments. Only thing to keep track of is whether you should itemize deductions or not.

My condo, including the association fees, runs about the same as some students I know are paying for a room in a house. The utilities also cost about the same. Altogether, I'm happy with it :)

Posted

We bought a condo this last summer, and are over the top happy about it. I just started my English PhD, and my husband works at Ikea. First home for both of us.

How it looks money-wise:

We bought a place for $180,000, with a loan of $121,500. We have a 35 year mortgage, which is idiotic and should be illegal, but it's what the mortgage broker had to do to make some formula work. What they think you should spend on housing and what normal people actually spend on housing are completely different things. So with our ridiculous mortgage, our payments are $550 a month. Our condo fees are another $550. Add on about $100/month in property tax, and our housing costs are $1200, which is exactly what we were paying to rent less than half the space in our old city. We're being really aggressive and doubling our payment each month, though, to pay it down while the interest rates are still low. Extra money (tax returns, etc) can also be thrown on our mortgage without penalty up to 15% of the initial loan. Running some spreadsheets that are easily googleable, I've made an extra-payment plan that cuts our total interest paid down to a THIRD of what it would be otherwise and turns our 35 year mortgage into a 15 year mortgage.

By the end of my PhD, we should have built up about $35-40,000 in equity. We bought the place in the worst housing market imaginable from a very motivated seller, so our odds of selling for more than we bought for are very good.

How it looks time-wise:

We were lucky and got the first place we put an offer in for. Still, it took SO. MUCH. TIME. It was insane. I had no idea. I was unemployed that summer, and it was like having a part time job.

Stipends and mortgage approval:

TD Bank in Canada accepted my offer letter as proof of income, but I know other people who were turned down in the same situation. I think mortgage lending is way less of a science than we tend to think. In my case, my husband had a record of very steady employment, but not enough income to qualify for the loan. My income pushed us over that barrier, but wouldn't have been enough on its own. I think.

Why we love it:

Stability, quiet, the dorky joy of figuring out how much money is potentially going into your own pocket instead of to a landlord, the ability to paint the walls bright green if we want, and tear out ugly lighting fixtures and curtains, not having to worry about landlords objecting to our cats (and hypothetical future kids)..... it's a nice life.

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