Home Buying in 23507>Question Details

Chevelle, Home Buyer in Ghent, Norfolk, VA

I am a physician looking to buy my first house. Small down payment $15,000, but contract salary $250,000/year.

Asked by Chevelle, Ghent, Norfolk, VA Mon Apr 21, 2008

What can I afford? What price range should I be looking at?

Help the community by answering this question:


Chevelle, good morning ...

You've received some good information so far on getting a mortgage ...

Here's some food for thought for the future ...

I deal in large purchases and credit everyday, so I see it everyday..

Along with finding a quality mortgage lender, I might recommend finding a quality money man or a CPA or someone that is highly recommended in your community that can track your business income ... you go from zero to hero in a very short time in your business, and finances get left behind.

The three worst credit ratings are held by ministers, attorneys and physicians... it's common to see a physician 5 years out of residency and getting ready to file a BK .. their job has been saving lives, not doing checkbooks.

Sincerely, good luck...

: ^)
2 votes Thank Flag Link Tue Apr 22, 2008
Simple answer, don't buy yet. At your income, you should wait till you have 20% down. What you can afford has nothing to do with what you need. Our national real estate downturn has a lot to do with people buying the most they can afford vs what they need. Right now is the time to buy with 20% down, and only what you need. If I were you, I'd buy a house in a nice area for about $250,000 with $50,000 down. Pay it off in under 5 years, rise and repeat with a larger home. Get to the point where your money works for you, and you aren't working for your money. Sell the homes later with owner financing and collect close to $250,000 a year cashing checks. Sounds better than working 80 hours a week. If real estate isn't your thing, you can always buy an affordable home and lend out your extra cash for 9-11% returns as a private lender. My company buys and renovates homes, we could always use private lenders. Call me in 3 years when you have money you don't know what to do with!
1 vote Thank Flag Link Wed May 21, 2008

From a financial perspective, it is recommended that you have 6 months of income in reserves in case of emergency. With that in mind, I recommend not overextending yourself. Here are some other things to consider, as well:

#1. how much/what kind of house do you need verses want
#2. after down payment and closing costs, how much am I leaving myself in reserves?
#3. consider taking a loan with "built in closing costs" (slightly higher rate) if you anticipate being in the
home less than 5 years to save the upfront out of pocket
#4. think creatively - you could buy a duplex, rent out the other half and have an investment property for
yourself and plan for the future!

$15K is 5% down on a $300K house. My best recommendation is to buy what you "need" now and upgrade later. In addition, if you have an investors eye when making your first home purchase, you can rent it out when you have the reserves to upgrade down the road.

Closing thought - My husband and I chose to purchase investment property instead of "one large home" and it was the best decision we ever made. 15-20 years down the road our real estate investments will provide cash flow to help pay for our childrens' college educations. Unlike the stock market, you can buy investment real estate with only 10-20% down and let the renters essentially buy your property for you.

Good luck! Rebecca Ivanov, Helen Adams Realty, Charlotte NC
1 vote Thank Flag Link Tue Apr 22, 2008
Hi Chevelle! Sandra Bean over at Bank of America and Naoma Doriguzzi at Wachovia both have great physician mortgage programs and are well versed in dealing with our area physicians. A couple of area banks also have daily drop-offs/pick ups at the hospitals for the convenience of the staff (of course, they want your banking business along with your mortgage!). My recommendation to most of the physicians I work with (who are mostly recent grads) is to look at what you feel you can afford rather than what you qualify for. You don't want to be "house-poor" and you definitely want to make a wise investment in real estate. Some people with your income are comfortable with a $6000/mo. mortgage payment and others don't want to pay much more than their current rent. If you go to my website, you will see a mortgage calculator which can give you an idea of what you qualify for.
Web Reference: http://www.tinamerritt.com
1 vote Thank Flag Link Tue Apr 22, 2008
Chevelle, in order to find out what you can afford you need to speak with a mortgage professional that can review your credit, debt, income & assets. An experienced lender can show you what programs you qualify for and educate you on your options. That way you can make the best decision on your own based on what your short and long term goals are.

The Pre-Approval process is critical in determining your buying ability well before you go out shopping for a home. I go into more detail here: http://www.trulia.com/blog/elliott_r_oliva/2011/07/pre-quali…

For more questions or details please feel free to contact me at your convenience. Thank you and good luck!

Elliott R. Oliva
Mortgage Banker| nmls#353884
202.681.1636 direct
0 votes Thank Flag Link Fri Jul 29, 2011
You're probably better off renting right now or getting into a lease/option. There's such a glut of nice homes that aren't selling whose owners may be very happy to rent to you for a very reasonable price. You could likely rent or L/O much more house than you could buy and keep saving toward your down payment. We're still in a declining market. You can buy more house later.
Web Reference: http://www.877Quiksel.com
0 votes Thank Flag Link Fri Jul 29, 2011
Hello Chevelle -

While I am an experienced Realtor, my immediate advice to you on your question is: talk to a lender. Have you yet spoken to a loan officer? Loan officers are the right place to start with questions such as yours - this is my income, so how much house can I afford/should I be looking at to buy? what are your different loan programs available and which is best for my personal situation - e.g., how much should I put down and why? what works best for me? etc. There are many good loan officers working in our local market. I have a couple with whom I work and to whom I refer happy buyer clients consistently, and would be glad to give their contact information to you for you to begin these critically important, initial dialogues. While there is a good deal of overlap among the different programs offered by different loan officers, they of course do not all offer the same programs so I would recommend that you talk to two or three about your personal situation and find out what they propose as best for you.

Then - once you find out what is available loan-wise and what you can afford, comfortably, to spend - you then should talk with a Realtor and have a look at some properties in that price range and which search critieria [such as size, number of bedrooms, location, etc.] that you desire in/for your home. You very possibly may find out that what you can spend is not what you want to spend; i.e., that what you can afford in fact may provide more house than you need and/or want, and if that is the case we look then at a different/lower price point.

Let me know what I can do. I am a local native and work it extensively. I'd be grateful for the opportunity to work with you.
0 votes Thank Flag Link Sun Oct 4, 2009
There are special programs for Doctors to purchase First Time Homes. The Doctors and Teachers I have represented in the past are asked "How much do you want?" Please call if I can help you more. Donna
0 votes Thank Flag Link Sun Jun 15, 2008
With the guidelines recently changing for Fannie Mae & Freddie Mac, 3% - 5% down and also with the guidelines changing for FHA loans now is the perfect time for a home purchase. Interest rates are at an all time low and we are in a buyers market. Take it from The DONALD if your going to invest in real estate now is the time. We may not see this market again, just like we may not see the market we had a few years ago with home prices rising so quickly.
Web Reference: http://www.DebbieEstes.com
0 votes Thank Flag Link Fri May 23, 2008
Some good answers below. I would encourage you not to become "house poor". Instead, decide what it is you need/want. Proximately to work? Kids? Schools? I'm guessing you are a fairly new doctor? So your hours might be demanding. You have to factor in yard work time. Do you want a large lawn? High or low maintainence? All of these are questions to consider. Then make your purchase. In three to five years, then you can upgrade.
Web Reference: http://www.tchurchwell.com
0 votes Thank Flag Link Fri May 23, 2008

Many local lenders have fantastic loan programs especially for physicians- Suntrust is one I know of directly. These programs make an allowance for high student loan debt, low DP and anticipated future earnings.

Let me know if you would like a name of a good loan officer who specializes in mortages for physicians. I would be glad to help.

0 votes Thank Flag Link Mon Apr 21, 2008
Hi Chevelle,

You really need to speak with a Mortgage Lender to get the amount of house you can afford to buy. Student loans, car payments, credit card payments, etc. ALONG with your salary all go into figuring out how much you can truly afford to pay each month for a home mortgage. Ask a friend or collegue if they can refer you to a good mortgage lender or better yet go to your bank and speck with the loan office there!

Good luck!
0 votes Thank Flag Link Mon Apr 21, 2008
I would very strongly suggest you get with a local mortgage lender. You want someone who you can speak candidly to about your income, current debts, and what mortgage plan would be best for you. What neighborhood are you ideally looking for? Where will you be practicing in?
0 votes Thank Flag Link Mon Apr 21, 2008
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