If you’re in the middle of resident training, your life is busy, to say the least. But you’re working towards something very special so you keep grinding. At the end of the day, you may look forward to returning to a comfortable home to relax, especially if you have a family or have recently started one. If you’re thinking of buying a home as a resident there are some important considerations to make for the short and long-term. Let’s take look.
Keep the Home Under Budget
For most in residency, the home they buy will not be the last one. Chances are you will move or upgrade. At some point, your physician’s income will allow you to build your dream home. But until then, you just need a comfortable home to meet your family’s needs.
Consider buying a home for less than what your maximum budget can handle. Keep it modest. If you use a physician mortgage loan, you can buy with zero down payments.
Build Short-term Equity
Most of your monthly payment in the early years of a home loan goes to paying interest. You’re paying interest on the amount you owe for the loan. Because your principal balance is at its peak in the earliest years of your mortgage, more of your payment goes to interest. Making a monthly payment for five years may only pay down 1 to 2 percent of your original principal.
When you keep it under budget and buy a home for less than you can afford you have the opportunity to build equity faster. You can make extra principal payments on the mortgage.
Who is the Next Buyer?
There’s a good chance you’ll need to relocate after residency. You may need to sell your home quickly. If you’re thinking about buying a home during residency you may want to think about the next buyer. What would the next buyer want that this home doesn’t have?
Ask your real estate agent about the most popular features among buyers in the area and look for a home that checks those boxes. Are fenced yards in demand? Open floor plans, or a certain number of bedrooms and baths?
One of the most important factors to consider is the quality of the local school system. It may not mean much to you if you don’t have children, but to the next buyer, it could be the determining factor. The closer you buy to a school with a good reputation, the easier it will be to maximize your home’s re-sell.
Think About Lifestyle
Although you should keep the next buyer in mind, you also want to remember your lifestyle as a resident. You will not have much time for maintenance and upkeep. Buying a condo or a townhouse is a great way to own without all the time-consuming maintenance responsibilities.
