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A physician’s guide to buying a house (what you need to know first)

16th November 2020 Print

From the outside looking in, it might appear as if doctors have it made. As if every financial decision is easy and breezy. And while, yes, a doctor’s budget might be higher, there are still plenty of challenges in the home buying process.

5 Home Buying Tips for Docs

Buying a house is a stressful, time-consuming, and intensive process - no matter who you are. As a doctor, you face the same circumstances as everyone else. You might be in a higher tax bracket than the average homebuyer, but that doesn’t do anything to ease the friction associated with finding and closing on the right house.

Here are a few helpful tips we recommend following in your search for a home:

1. Consider Your Length of Residency

One of the most prominent debates doctors have is whether or not to buy a house during residency. You’ll find opinionated breakdowns on both sides of the argument.

Some say that you should never buy a house when you’re a resident because you’re already laden with debt, you don’t have much income, and there’s uncertainty about where you’ll be in three to five years. (You could take a job in the same hospital or practice, but it’s also likely to move halfway across the country.)

Others say go ahead and buy a house as soon as you can. It allows you to build equity, secure low interest rates (especially right now), get a tax break, and possibly create a cash flowing asset should you ever move. 

Numbers can be crunched on both sides, but it’s ultimately your call. If you think you have good job security and will be in the area for a while, then you might go ahead and buy a house. Otherwise, keep tackling that debt and saving up cash. 

2. Budget Appropriately

Never go into a home buying situation without a clear idea of how much you want to spend. There should always, always, always be an upper limit to how much you’ll spend. This needs to be a concrete number. 

“If you are a young physician, it is important to keep your budget constraints in mind,” Curbside Real Estate mentions. “You may have student loans already, so you need to find a lending opportunity for your home that will work with your budget. A real estate agent who has worked with other young physicians in the past will know the best tips and tricks for finding the perfect mortgage for your situation.”

3. Use the Right Financing

Speaking of financing, you might need to get creative. This is especially true if you have high student loan debts and/or need a larger than normal loan.

Physician mortgage loans are specialized low-to-no down payment financing options that are available to doctors, physicians, dentists, and other medical professionals. They provide generous loan balances, relaxed debt-to-income ratios, and no private mortgage insurance (PMI). Consider this option if you have circumstances that make a traditional loan difficult to obtain. 

4. Choose a Low-Maintenance House

As a doctor, you might have a sizable income, but you probably don’t have a ton of free time. And you don’t want to spend what free time you do have on house projects and lawn care. That’s why it’s smart to buy a low-maintenance house with a small yard and recent updates. You may even be able to find something in a neighborhood where the HOA takes care of a lot of the maintenance for you. 

5. Consider Resale Value

Though it’s impossible to predict where housing values will go in the future, you do want to consider the potential resale value in the equation. This is especially important if you’re buying something at the very top of your market. It’s always much more difficult to sell something at a premium price point. So if you think you’ll only be in this house for two or three years, factor in the possibility of the property sitting on the market for a few months when you eventually do turn around and sell it. 

Setting Expectations Accordingly

No matter what anyone else has told you, there’s no such thing as a perfect house or “dream home.” It might exist in your head, but you won’t find it in the marketplace. There are simply too many variables in play. But don’t be discouraged. You can still find a house that you love. (You just might need to temper your expectations ever so slightly.)

Armed with these five tips, you’re ready to begin the search process. And with the right amount of patience, you’ll eventually find a house that you can turn into a home. Happy house hunting!