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Othello
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Personal Savings - Home Down Payment vs. Partial MBA Tuition 03 May 2007, 08:04
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Folks,

I would like to hear advices from the forum members. In a situation that I opt for a part time MBA program, I would like to move into a home (buy a home that is). Both me and my spouse will be working during my MBA. How should I go about using my personal savings (which stands at approx. 30-40% of the MBA tuition, and would probably be 15-20% for a home down payment):

1) Should I use the personal savings towards the home down payment, and take out a loan for full MBA tuition? or

2) Should I use the personal savings towards the MBA tuition, and then pay zero down/minimal down for a home down payment.

Thanks for your insights!
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squali83
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Personal Savings - Home Down Payment vs. Partial MBA Tuition 03 May 2007, 08:10
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Othello
Folks,

I would like to hear advices from the forum members. In a situation that I opt for a part time MBA program, I would like to move into a home (buy a home that is). Both me and my spouse will be working during my MBA. How should I go about using my personal savings (which stands at approx. 30-40% of the MBA tuition, and would probably be 15-20% for a home down payment):

1) Should I use the personal savings towards the home down payment, and take out a loan for full MBA tuition? or

2) Should I use the personal savings towards the MBA tuition, and then pay zero down/minimal down for a home down payment.

Thanks for your insights!
Show more


I think a lot of that is preference. However, I am almost positive that lenders do not do 0 down mortgages anymore, so I am not so sure that would be an option. Also, decide if the area where your school is, is where you want to remain post-MBA. If it is not I would think hard before purchasing. Also, look at the real estate market and assess how much values are increasing per year 5/6/10%. If they are increasing substantially more than the interest rate you will be paying for loans I would purchase the home. Just my opinion.
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Personal Savings - Home Down Payment vs. Partial MBA Tuition 03 May 2007, 08:59
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Othello
Folks,

I would like to hear advices from the forum members. In a situation that I opt for a part time MBA program, I would like to move into a home (buy a home that is). Both me and my spouse will be working during my MBA. How should I go about using my personal savings (which stands at approx. 30-40% of the MBA tuition, and would probably be 15-20% for a home down payment):

1) Should I use the personal savings towards the home down payment, and take out a loan for full MBA tuition? or

2) Should I use the personal savings towards the MBA tuition, and then pay zero down/minimal down for a home down payment.

Thanks for your insights!
Show more


Given the current state of the U.S. housing market, I question why you even want to purchase a house right now. If you are going to school in the same geographical area as which you plan on working after graduation, I can maybe understand it. However, if you are going to live and work someplace else, I certainly would not buy a house. After you account for closing costs, real estate agent fees, and other misc. expenses, is it really a good investment to make now?
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Personal Savings - Home Down Payment vs. Partial MBA Tuition 03 May 2007, 09:57
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flapjack
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Folks,

I would like to hear advices from the forum members. In a situation that I opt for a part time MBA program, I would like to move into a home (buy a home that is). Both me and my spouse will be working during my MBA. How should I go about using my personal savings (which stands at approx. 30-40% of the MBA tuition, and would probably be 15-20% for a home down payment):

1) Should I use the personal savings towards the home down payment, and take out a loan for full MBA tuition? or

2) Should I use the personal savings towards the MBA tuition, and then pay zero down/minimal down for a home down payment.

Thanks for your insights!

Given the current state of the U.S. housing market, I question why you even want to purchase a house right now. If you are going to school in the same geographical area as which you plan on working after graduation, I can maybe understand it. However, if you are going to live and work someplace else, I certainly would not buy a house. After you account for closing costs, real estate agent fees, and other misc. expenses, is it really a good investment to make now?
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Well, its a question I've asked myself as well. I've decided to buy primarily based on need more than investment. Renting is substantially more $$ than buying would be at this point.
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Personal Savings - Home Down Payment vs. Partial MBA Tuition 03 May 2007, 10:46
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As someone pointed out finding financing for a house without putting money down is getting a whole lot harder these days. Most places want at least 10% down. Depending on the interest rate it may make sense to put 10% on the house and then put the rest towards school.

Take it from a home owner, make sure you don't come close to draining your savings on your down payment. Its amazing how fast things add up when you buy your first house. We put down 10% on ours, and then within a year probably had spent another 50K into it...and I have done all the work myself with some help from family. If I had to pay people would be double that since there was a lot of it was restoring existing features that were here. You could down 20% then get a HELOC and use that as your safety net...but cash is always a safer bet than any line of credit or loan.
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Personal Savings - Home Down Payment vs. Partial MBA Tuition 03 May 2007, 11:06
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I would use your personal savings for the down payment and get the Stafford loans for the mba program, which you won't have to pay back until you graduate.

I'm in a similar boat in that I'll be going MBA part time and purchasing a home (planning to stay in the area). I will only be taking out Stafford subsidized loans such that my loans will not accrue interest while in school. It is going to be financially stressful, but doable.

Although the RE market is down, it's projected that end 07/early08 will bounce back to normal appreciation (not the insane % increases over past few years), especially in CA where housing hasn't dropped much anyways
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Personal Savings - Home Down Payment vs. Partial MBA Tuition 03 May 2007, 16:59
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I wouldn't be buying any real estate at this time. I just sold my house and I'm really glad I don't have that to worry about for the next few years. I think there's still some fallout to come in the real estate market as the secondary market absorbs losses (ratings agencies just downgraded a bunch of mortgage backed securities) and lending tightens. More stringent lending rules will effectively decrease the pool potential buyers, which will provide downward pressure on property values, at least until the lending market stabilizes. The worst is probably yet to come.
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Personal Savings - Home Down Payment vs. Partial MBA Tuition 04 May 2007, 05:39
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pelihu
I wouldn't be buying any real estate at this time. I just sold my house and I'm really glad I don't have that to worry about for the next few years. I think there's still some fallout to come in the real estate market as the secondary market absorbs losses (ratings agencies just downgraded a bunch of mortgage backed securities) and lending tightens. More stringent lending rules will effectively decrease the pool potential buyers, which will provide downward pressure on property values, at least until the lending market stabilizes. The worst is probably yet to come.
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What is good for current homeowners about this state of the market is that the market for rentals is going to increase greatly. I have wanted to rent instead of buy but was afraid of the overhead. However, now I am really thinking about it, because I imagine that there will always be someone wanting to rent and the house will not sit vacant for months. I would love to sit on my house for a few years and allow others to pay for my mortgage. As of buying another house, definitely will not do it, because of the hard time I have had trying to sell my house. I am definitely renting while in school.
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Personal Savings - Home Down Payment vs. Partial MBA Tuition 04 May 2007, 08:05
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squali83
Othello
Folks,

I would like to hear advices from the forum members. In a situation that I opt for a part time MBA program, I would like to move into a home (buy a home that is). Both me and my spouse will be working during my MBA. How should I go about using my personal savings (which stands at approx. 30-40% of the MBA tuition, and would probably be 15-20% for a home down payment):

1) Should I use the personal savings towards the home down payment, and take out a loan for full MBA tuition? or

2) Should I use the personal savings towards the MBA tuition, and then pay zero down/minimal down for a home down payment.

Thanks for your insights!

I think a lot of that is preference. However, I am almost positive that lenders do not do 0 down mortgages anymore, so I am not so sure that would be an option. Also, decide if the area where your school is, is where you want to remain post-MBA. If it is not I would think hard before purchasing. Also, look at the real estate market and assess how much values are increasing per year 5/6/10%. If they are increasing substantially more than the interest rate you will be paying for loans I would purchase the home. Just my opinion.
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Thanks for the advice, Squali. I have not checked but I am pretty sure that you are correct about 0 down mortgages. I would want to stay in the same are post-MBA as well, therefore the house hunt.
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Othello
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Personal Savings - Home Down Payment vs. Partial MBA Tuition 04 May 2007, 08:07
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flapjack
Othello
Folks,

I would like to hear advices from the forum members. In a situation that I opt for a part time MBA program, I would like to move into a home (buy a home that is). Both me and my spouse will be working during my MBA. How should I go about using my personal savings (which stands at approx. 30-40% of the MBA tuition, and would probably be 15-20% for a home down payment):

1) Should I use the personal savings towards the home down payment, and take out a loan for full MBA tuition? or

2) Should I use the personal savings towards the MBA tuition, and then pay zero down/minimal down for a home down payment.

Thanks for your insights!

Given the current state of the U.S. housing market, I question why you even want to purchase a house right now. If you are going to school in the same geographical area as which you plan on working after graduation, I can maybe understand it. However, if you are going to live and work someplace else, I certainly would not buy a house. After you account for closing costs, real estate agent fees, and other misc. expenses, is it really a good investment to make now?
Show more


Yes, I am planning on sticking around the same area. If the housing market is slow, isn't is a good time for the buyers to buy (if they plan on hanging on to the house for a while)?
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Othello
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Personal Savings - Home Down Payment vs. Partial MBA Tuition 04 May 2007, 08:08
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flapjack
Othello
Folks,

I would like to hear advices from the forum members. In a situation that I opt for a part time MBA program, I would like to move into a home (buy a home that is). Both me and my spouse will be working during my MBA. How should I go about using my personal savings (which stands at approx. 30-40% of the MBA tuition, and would probably be 15-20% for a home down payment):

1) Should I use the personal savings towards the home down payment, and take out a loan for full MBA tuition? or

2) Should I use the personal savings towards the MBA tuition, and then pay zero down/minimal down for a home down payment.

Thanks for your insights!

Given the current state of the U.S. housing market, I question why you even want to purchase a house right now. If you are going to school in the same geographical area as which you plan on working after graduation, I can maybe understand it. However, if you are going to live and work someplace else, I certainly would not buy a house. After you account for closing costs, real estate agent fees, and other misc. expenses, is it really a good investment to make now?

Well, its a question I've asked myself as well. I've decided to buy primarily based on need more than investment. Renting is substantially more $$ than buying would be at this point.
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Exactly. I am looking at buying with a "need" perspective as well. Thanks for the advice.
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Othello
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Personal Savings - Home Down Payment vs. Partial MBA Tuition 04 May 2007, 08:10
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riverripper
As someone pointed out finding financing for a house without putting money down is getting a whole lot harder these days. Most places want at least 10% down. Depending on the interest rate it may make sense to put 10% on the house and then put the rest towards school.

Take it from a home owner, make sure you don't come close to draining your savings on your down payment. Its amazing how fast things add up when you buy your first house. We put down 10% on ours, and then within a year probably had spent another 50K into it...and I have done all the work myself with some help from family. If I had to pay people would be double that since there was a lot of it was restoring existing features that were here. You could down 20% then get a HELOC and use that as your safety net...but cash is always a safer bet than any line of credit or loan.
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Good advice from a home owner! Thanks.
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Othello
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Personal Savings - Home Down Payment vs. Partial MBA Tuition 04 May 2007, 08:11
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jayy178
I would use your personal savings for the down payment and get the Stafford loans for the mba program, which you won't have to pay back until you graduate.

I'm in a similar boat in that I'll be going MBA part time and purchasing a home (planning to stay in the area). I will only be taking out Stafford subsidized loans such that my loans will not accrue interest while in school. It is going to be financially stressful, but doable.

Although the RE market is down, it's projected that end 07/early08 will bounce back to normal appreciation (not the insane % increases over past few years), especially in CA where housing hasn't dropped much anyways
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Thanks for the advice Jayy178. I am not a US permanent resident so dont think I qualify for the Stafford loans?
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Othello
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Personal Savings - Home Down Payment vs. Partial MBA Tuition 04 May 2007, 08:12
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pelihu
I wouldn't be buying any real estate at this time. I just sold my house and I'm really glad I don't have that to worry about for the next few years. I think there's still some fallout to come in the real estate market as the secondary market absorbs losses (ratings agencies just downgraded a bunch of mortgage backed securities) and lending tightens. More stringent lending rules will effectively decrease the pool potential buyers, which will provide downward pressure on property values, at least until the lending market stabilizes. The worst is probably yet to come.
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So, it's not a buyers market?
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Personal Savings - Home Down Payment vs. Partial MBA Tuition 04 May 2007, 10:19
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pelihu
I wouldn't be buying any real estate at this time. I just sold my house and I'm really glad I don't have that to worry about for the next few years. I think there's still some fallout to come in the real estate market as the secondary market absorbs losses (ratings agencies just downgraded a bunch of mortgage backed securities) and lending tightens. More stringent lending rules will effectively decrease the pool potential buyers, which will provide downward pressure on property values, at least until the lending market stabilizes. The worst is probably yet to come.

So, it's not a buyers market?
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Not if it keeps dropping. There was an article that came out in the last day or two talking about how record numbers of people are trying to back out of contracts that they signed to purchase new homes. Builders are so desperate that they are even suing buyers that are willing to walk away from their deposits - trying to make them close on the home. Buyers are suing based on being misled about the housing market.
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Personal Savings - Home Down Payment vs. Partial MBA Tuition 04 May 2007, 10:22
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Thats strange. Where I live (los angeles), these new construction or condo conversions are selling out relatively quick still. This one complex with 80 units sold out in 3 months. There definitely is still some demand for housing, just not as much as it used to be 2 years ago. Houses are on the market for maybe 2-3 months instead 2 weeks.


pelihu
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pelihu
I wouldn't be buying any real estate at this time. I just sold my house and I'm really glad I don't have that to worry about for the next few years. I think there's still some fallout to come in the real estate market as the secondary market absorbs losses (ratings agencies just downgraded a bunch of mortgage backed securities) and lending tightens. More stringent lending rules will effectively decrease the pool potential buyers, which will provide downward pressure on property values, at least until the lending market stabilizes. The worst is probably yet to come.

So, it's not a buyers market?

Not if it keeps dropping. There was an article that came out in the last day or two talking about how record numbers of people are trying to back out of contracts that they signed to purchase new homes. Builders are so desperate that they are even suing buyers that are willing to walk away from their deposits - trying to make them close on the home. Buyers are suing based on being misled about the housing market.
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rhyme
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Personal Savings - Home Down Payment vs. Partial MBA Tuition 04 May 2007, 10:27
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pelihu
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pelihu
I wouldn't be buying any real estate at this time. I just sold my house and I'm really glad I don't have that to worry about for the next few years. I think there's still some fallout to come in the real estate market as the secondary market absorbs losses (ratings agencies just downgraded a bunch of mortgage backed securities) and lending tightens. More stringent lending rules will effectively decrease the pool potential buyers, which will provide downward pressure on property values, at least until the lending market stabilizes. The worst is probably yet to come.

So, it's not a buyers market?

Not if it keeps dropping. There was an article that came out in the last day or two talking about how record numbers of people are trying to back out of contracts that they signed to purchase new homes. Builders are so desperate that they are even suing buyers that are willing to walk away from their deposits - trying to make them close on the home. Buyers are suing based on being misled about the housing market.
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I think it depends on location as well. You couldn't catch me buying in California if you paid me. Chicago seems quite stable. We've seen a slowdown in appreciation, but nothing dramatic such as a true reversal. I think there are pockets in Chicago that have been overvalued - downtown seems to have grown to have a significant surplus (part of hte reason I sold) - the construction here never stops.