Recently our household underwent a big upgrade: no more disposable water bottles! The boyfriend is the late convert (obviously) and these functional and gorgeous S’well bottles are what finally sold him.
Home Mortgage: 4th Time is A Charm!
After purchasing my 1st home as MS4, refinancing it as PGY1, then attempting to refinance it as PGY2, I’m now preparing to purchase my 2nd home.
Honestly, working with so many mortgage officers over a spectrum of mortgage companies in the past, I felt lied to and talked down to 99% of the time, and hence developed a severe aversion to the mortgage industry. Here to share my past woes & my recent pleasant experience with you and hope that you will avoid the negative experiences I had gone through before working with the most awesome mortgage banker, Travis Woods from BOA, ever.
February-May 2014: BBVA Doctor’s Loan
- Mortgage banker was based in Florida while I was in California. This made things difficult. Our time zone difference made a serious lag time in our communication.
- Banker had 30+ year experience in the industry; I had 0 (yrs). Serious asymmetry in knowledge. Banker tried to be sympathetic and stoop down to my level of lack of knowledge (I was learning really hard on the side & running all the numbers by myself in the dark, trying to keep up.) Banker got inpatient at times, understandably so.
- The entire mortgage process was fear ridden. I insisted on getting a 30 year fixed rather than ARM. He did try to get me to see ARM could be better. I didn’t appreciate his wisdom.
- Results: 4.375% 30 year fixed with 11% down Doctor’s Mortgage.
January-March 2015: Multiple Mortgage Companies to Refinance My 1st Home
- First company I came across, Cardinal Financial, had a wonderful mortgage broker, but the numbers were not great.
- Second company I worked with had the best rates/terms I found shopping around, but the loan originator was plain abusive, unkind, and crude.
- I ended up signing with the 2nd because the numbers are the best but developed worsening aversion to the mortgage industry.
- Results: 3.375% 7/1 ARM with 80% LTV, switched out of Doctor’s Loan
February-March 2016: Multiple Mortgage Companies to Re-refinance My 1st Home
- By this point, I am practically a mortgage banker myself. I could run all the numbers on excel first and predict what the loan officer will present to me: LTV, debts, liabilities, debt-to-income ratio, APR, interest rates & terms.
- Abuse has not stopped.
- Some better (i.e. responsive, transparent, efficient) loan originators may not offer the better numbers. But the one offering the best numbers was a jerk. If brilliant doctors can’t be jerks, why can mortgage bankers with good offers be as****?
- Results: Elected Not to refinance to 15 year fixed loan
The promised 4th time is a charm, hopefully.
Yet to be seen as closing date is 6/17/16. (will update this post on progress)
- I’m selling my first home, purchasing a second one.
- A BOA doctor’s loan mortgage officer was a breath of fresh air from the moment we met (on the phone) to the time when my loan application was forwarded to the underwriting department.
- This banker was empathetic, transparent, efficient, somewhat workholic like me, & really good with his numbers. (I respect mortgage bankers who do math better than me, even though to some extent I Expect all of them to do math better than me.)
- The mortgage process was not Fear-Anger-Frustration-Belittlement-Ridden. This banker partners with me to make the most financially sound decision.
- Results: I’m getting a 3% 7/1 ARM Doctor’s Loan with 5% down. (no PMI, as expected of all doctor’s loans.)
I have to quote Amber from the popular American television medical drama, House M.D.,
“All my life I thought I had to choose between love and… respect. And I chose respect. And with Wilson… I know what it’s like to have both.”
Now substitute with “All my life I thought I had to choose between the best mortgage and… the best mortgage banker. And I chose the best mortgage. And with this banker… I know what it’s like to have both.”
My humor at this point is the culmination of lots of tears and rage, I hope you don’t have to go through what I did to get a purchase/refinance mortgage. Set yourself up for success with a good banker. Please see my recommendation page for a good banker.
- What was your experience in purchasing in a home?
- Did you like your mortgage banker? Why or why not?
- Did you respect your banker? Did they demonstrate the same level of professionalism your patients expect from you?
- Would you recommend your mortgage banker or do repeat business with him?
Comment below!
The Cost of Buying 2 Homes in 2 Years.
This post is written a few months ago, prior to the transactions of selling 1st home and buying 2nd home have taken places. Actual figures approximate estimates below & will be updated once all finalized.
Say what? DWM purchased 2 homes and sold one in 2 years? My highly esteemed mentor WCI would have shaken his head at my decision if I had asked him, which is why I didn’t this time*.
Financially, buying a home as MS4, then selling it & immediately buying a 2nd home as PGY2 are
the most financially costly and unwise moves one could take bedsides
attending medical school on 7% student loans.
Yet mentally, emotionally, & spiritually, this is the single best decision I have ever made for Mini & myself since her inception.
Perhaps Dr. Wise Money is not as Money Wise as you thought.
I hope though, for this and other major forks in the path of life, to be Life Wise.
After all, money is a means; life is an end.
Monetary costs:
- Closing costs of 1st home (BBVA doctor’s loans), May 2014: $5,733.74
- Refinancing costs of 1st home (Conventional loans), January 2015: $495
- Costs of living in 1st home, May 2014-May 2016: $25,697
- Mortgage payments: $1,088.69 for 9 months, $975 for 15 months. HOA’s: $480/ Property taxes: $3,700/ Home insurance: $720/ Rural metro: $74
- Grand total, living in 1st home for 2 years: $31,925, $1,330/mo. (Zillow zealously says my 1st home rents for $1,500/mo.)
- Closing costs of 1st home sales, May 2016: nominal**
- Closing costs of 2nd home purchase, June 2016: estimated $6,000
- Costs of living separately, June 2016 and on:
- Child care: estimated $300/mo
- Utilities & household expenditures that used to be shared to various degrees: estimated $200/mo more
- Higher mortgage due to higher LTV & more expensive home. (2nd home will be our home for at least the next 4 years. If I stay in town for my attending job, which I plan to, it will be our home forever as we don’t need to upgrade above it.)
So I basically rented my 1st home for $1,330/mo the last 2 years, then now starting over in regards to home equity and living with Mini on our own as a single parent. The financial damage is not as bad as I thought, though if it were just Mini and me 2 years ago, we would have happily lived in a $500/mo condo to save money ($830/mo à $19,920/mo) for a down payment to buy our dream home today. That is a nice chunk of down payment which I don’t have today.
The past is in the past. Let it go.
In order to come up with the closing costs & 5% down payment, I’m borrowing short term from family members and my Roth IRA. That will get me from my current debt free status to $10,747 on credit card debt (as I plan to pay my family back immediately with Chase Slate Balance Transfer check after closing on my 2nd home). I will also be down in my Roth space by $10,300, irrecoverable Roth space.
While I certainly have no qualms about carrying 10k 0% credit card debt (I used to carry 100k during medical school), I am indeed sad about losing 10k in Roth IRA space.
I can’t put price tag on the collective & individual happiness of Mini & me.
You won’t either, right?
Un-quantifiable benefits:
- Mini always wanted a pool. 2nd home has a pool; 1st doesn’t.
- Both Mini & I love visiting family & friends. 2nd home allows for a permanent guest room.
- We both love meeting new people. 2nd home allows for an Airbnb room.
- We get to sing & dance throughout the house whenever we’d like.
- Mini gets to have lots of playdates and sleepovers.
- No one will say his peace & quite is disturbed by excited & giggling girls.
- I get to throw parties like I used to a decade ago! Potlucks, pool parties, movie/board game nights.
- No one will interrogate me about why I didn’t put things back in the refrigerator as they were found.
- No one will tell me to put up with his mess & wait for him to get organized for a decade (granted the 8 moves in 10 years are not conducive to staying organized.)
- I get to do chores when I want & the way I want. I won’t be told that my efforts were subpar & the chores I completed need redoing.
- I get to live a minimalist existence. Materially, I need nothing beyond some clothes, my 4 year old laptop, my iPhone & a few essential pieces of furniture.
- There will be space, not filled with stuff in my home.
- I no longer have to bear the unbearable hoarding & dumpster diving.
- Mini’s dad gets his peace & quiet. He has sacrificed a lot trying to be supportive to Mini & me. He now gets to have 1,730 square foot to himself & the serenity of our neighborhood (no sounds other than birds chirping and javelinas grunting) as he has always wished for.
What more need I say?
*I have run my major financial decisions by WCI since I met him (@ whitecoatinvestor.com) since I was a finance-naïve MS3. Not consulting WCI on something that costs more than $100 is atypical of DWM. **Mini’s nana is buying my 1st home, we are not using a realtor. I proposed to walk away with zero equity as Mini’s paternal side of family has been extremely generous with helping with the down payment and refinancing of the home.
A Mother’s Love & Pride Collide: DWM’s Letter to MWM
This is a letter I wrote to MWM after watching her long-anticipated Aladdin (a school play performed by Sunrise Drive Elementary students), during which I felt my heart was wrenched.
Dearest sweetie pie,
I love you. I realized that sometimes I seem to have a lot to tell you, but it all comes down to “I love you.”
Last night, I felt sad when I saw that you didn’t seem to be having fun at your show Aladdin.
I noticed that you weren’t singing much or even dancing with the group. I noticed that you were pre-occupied. You had this pensive look on your face instead of dancing and singing like you did when you practiced at home.
This little girl, who you mentioned was totally out of line and disrupting the group’s performance, seemed to be having the time of her life, without a care for anyone around her. (Which is not necessarily the right thing to do, and in fact, it is wrong to be so inconsiderate to others.)
But as your mother, I’m selfish. I wanted to see my daughter have a great time, without a care for what others are doing or what they think of her.
I love you, please remember that.
I’m not telling you that I wish you behaved differently. I’m in fact very proud of you for your awareness of the entire group’s cohesiveness and you know whenever another member of the crew says a word wrong in his/her assigned line(s) because you know all the lines in the play by heart.
The qualities you possess, such as noticing details, knowing not only your part but also all the other member’s roles & lines, courage to step up and tell others when they are doing something wrong, make you an amazing leader.
I can’t be prouder of you! But my love for you conflicts with my pride in you.
On one hand, as your mother, I wish that you were not worried about others: what they did right or wrong. On the other hand, I am so proud that you are even aware of what’s going on around you, and to the degree that you take the entire group’s performance on your own shoulder, especially as one of the youngest performers in the group.
Do you understand what I mean?
While everyone is inspired and proud of Martin Luther King for his accomplishment and sacrifices, I’m not sure how many mothers actually want Their own sons to be MLK…
Again, I’m not asking you to change who you are. I just want to let you know what I meant last night.
I love you, that’s all.
- Do you sometimes feel selfish as a parent?
- Do you sometimes wish that your kid is not as kind, as compassionate, as conscientious as they are?
- Do you wish that they take on less weight on their shoulders and enjoy their lives a little more?
- Do you wish that your kid will never enter medicine like you or your partner?
- What would you say to your kid if you see that their enjoyment is sacrificed by their concerns for others?
Share your parenting insights below; thank you!
Living Richly Today: A More Relatable Dr. Wise Money
When my colleague/collaborator White Coat Money published my guest post: How I Contributed $23.5k to Roth IRA/Roth 403b in 2015 as PGY2, he began the post with this editorial caveat:
The following post describes a task that requires significant financial discipline and willpower to achieve. I don’t expect most WCM readers to follow guest author Dr. Wise Money’s lead.
White Coat Investor also commented on the Dr. Wise Money’s Way, “My general recommendation for attendings is 20% of gross income toward retirement. But anything you do as a resident is great. [Dr. Wise Money] is a crazy super-saving resident who will be very wealthy, very quickly. She saves far more as a resident than I ever did, but she also paid off her student loans as an intern. Interesting story that.”
These comments make Dr. Wise Money a bit radical and un-relatable to many PGY’s.
The truth is, Dr. Wise Money does not differ much from any other resident or fellow. In other words, there’s a Dr. Wise Money in every one of us.
- I chose a career in medicine, knowing well that there’s much easier way to make much more money in other professions.
- I believe the rewards of serving others go far beyond financial gain.
- My medical education was costly, financially and personally; I would have trained for 10 years beyond my college degree to become an attending radiologist.
- I spend money on what I care about, without blinking an eye.
- I skimp on things I don’t care for, without ever feeling that I’m depriving myself.
- I’m a planner. I plan my career; I plan vacations; I also have goals and plans for my personal finances.
- I’m a go-getter. I got into medical school, survived it, matched where I wanted, and now training hard to become a competent radiologist. I apply my proactive approach towards my career to my financial life.
- I’m a collaborator. Just as I would share any radiological feature & sign to make an imaging diagnosis, I’d also share monetary tips to achieve financial success.
- I’m a maximizer. I like getting the most accomplished with the least amount of energy & time. Most of us in medicine are over-achievers. We like getting the job done, well and efficiently.
- Yes it seems extreme that I can retire at age 38, or 3 years after completing fellowship. Fact is anyone can retire way earlier than they expected if they focus on what matters most/brings them the most happiness.
What do you think? Is Dr. Wise Money still a crazy saver who defers gratification 100% till retirement? Do you see DWM in you? What makes you happy? Do you notice yourself spending money on things you later regret? Have you ever sit down and inspect where your money goes? Find out if you are spending on what matters the most to you.