Mortgage Loan approval hell

[bearishgurl]

I think a lot of this discussion heretofore hinges on choices we make as young adults. College students could CHOOSE to major in an area where they will graduate in 4-5 years and then graduate and go to work (even if they had to relocate to do so). They can CHOOSE to attend community college the first two years and save a bundle of $$. They can CHOOSE to attend a public institution instead of a private institution and save another bundle of $$. They can CHOOSE to live in their parent’s home for the entire 4-5 years and attend LOCAL public institutions and save more $$ than all of the above combined. If they made all these choices, they would likely graduate debt-free.

Unless they have deep-pocketed parents or other relatives, the young students’ financial problems begin early in life when they:

-decide to attend a private school over a public school.

-decide to attend a 4-year college instead of a 2-year college and then transfer to a 4-year college

-decide to attend a public (or private) college away from home in high-cost area

-decide to attend an out-of-state college instead of an in-state college

-end up changing their majors midstream

-see how students with deeper-pocketed parents/relatives live at college and so take out loans to keep up with them

-have parents who never talked about financial issues with them so do not understand the ramifications of signing for a student loan

Students can still recover from most of the above without loans if they WORK. If they feel that have to attend college in a high-cost area far from home, it’s very possible they won’t be able to graduate on time as they’ll likely need to work 30 hrs week in addition to taking classes.

In the case of sdr’s doctor friend (or any student considering graduate school), they would be well-served to do a cost-benefit analysis first, INCLUDING considering the years of FT employment salary AND experience they will LOSE if they continue on with school. Getting a graduate degree costs 2-8 times as much as getting an undergraduate degree. There is no guarantee of graduation OR success after graduation. There is no guarantee they will be able to obtain suitable specialized employment they have trained for in cities and/or states they would be willing to live in. By virtue of getting a graduate degree, they have rendered themselves “overqualified” for regular bread-and-butter jobs that pay the bills (unless they lie on their resumes). Their student-loan payments begin coming due six months after graduation. If they take a deferral, they really screw their financial futures, IMHO. Every step of the way, the graduate student makes a conscious financial decision to mortgage their future more by their choices on WHERE to attend graduate school, WHAT KIND of graduate school to attend, HOW LONG to go for (i.e. Masters/Doctorate), WHERE they will live while going to school, whether or not they will WORK, etc. They do this in hopes of achieving their goal which would be to work as a professional in a career they feel passionate about.

sdr brought up milestones which young adults think they deserve things in life such as age 30 – get married and start a family, early 30’s to early 40’s – buy a house. All this is well and good (even early 20’s) if you have secure full-time jobs and NO STUDENT LOANS. When you take out student loans, especially loans in excess of $100K, you have effectively mortgaged your future which has the effect of delaying all these milestones further out into the future. You will be coming into a marriage and possibly having a child with your new partner with this cloud of huge DEBT hanging over your head which never goes away. The longer it is consolidated and deferred, the longer it takes to pay off. Maybe this is okay for men, because as a 45+ year-old bachelor, they can just find a 25-35 year old spouse after retiring their student loan debt and start life afresh. Bur for a woman, the time to have a family will run out on them while they try to manage, consolidate and pay down their crushing student debt. I’ve seen many take time off work or just after passing the bar for babies, getting a deferral. Then, at age 40, their debt was even larger and they STILL had no experience or had been out of the workforce for X number of years. I’ve seen many “professional” new moms so entrapped by student debt that they return to work ASAP after each child and also teach evening classes for extra $$. I’ve seen the spouse WITHOUT the student debt have to buy the family home in their name only.

I’m not saying graduate school is a bad idea. But there has to be a cost-benefit analysis as to the actual return on investment and the likelihood of landing a secure position in a city/state you want to live in. The potential graduate student should also think beforehand about the total cost of setting themselves up as a professional, i.e. health insurance, leasing office space, malpractice insurance, etc. before signing up for these student loans. And most importantly, they have to REALLY TAKE A HARD LOOK at how this debt they are taking on will affect their future lifestyle.

Who really has the better life here? The bachelor degree holder who begins working FT at 22-24 years old and has no student debt or the graduate school professional who begins working at 25-30 years old with a load of student debt?

The younger bachelor degree counterpart may have already begun their family with the employed mom taking SDI and possibly FML to spend time with their newborn. Their kid(s) may already be in school and they may have already purchased their family home, as well, by the time their still single and childless graduate degree counterpart is even free to accept a FT job.

The unfunded bachelor-degreed student (who majored in an employable field and got work experience while in school) left college debt-free and is often able to live the life they “deserve” on schedule. The unfunded graduate student who has to service their huge debt-load into oblivion cannot live the life they “deserve” until often many years “out of the gate” because they consciously and repeatedly entrapped themselves while a perpetual “student.”

In this day of economic uncertainty and no guarantees of steady employment anywhere, I believe a young college graduate can still find a position they like, even if not “passionate” about, if they are willing to relocate if needed. Realism and pragmatism are smarter in the long run than loading yourself up with non-dischargeable debt at higher interest rates while betting on a nebulous, at best, future, IMO.

In a nutshell, the situation that sdr’s doctor friend and all other similarly-situated potential RE buyers find themselves in today is self-created from the choices they made all along the way. They now have to live with those choices. The rest of us don’t have the debt OR the lofty “professional designation.” Everything has a cost. As sdr stated somewhere last week, there is no “free lunch.”

-end of slightly OT rant-

[Scarlett]

The cost of graduate studies in science is really MINIMAL. Many PhD graduate students have a fellowship: their tuition paid by the university and some even given a small stipend and subsidized housing – so they can squeak by without paying a penny. Others had to take a research or teaching assistanthip in the univeristy to cover the tuition and stipend, something very doable. That’s what I and my friends who got PhDs in physics, engineering, biology did. BTW, my husband and I, both PhDs, didn’t have any student debt.

Of course, there are costs of missed opportunities of investment, like savings for retirement, etc.

[Scarlett]

The cost of graduate studies in science is really MINIMAL. Many PhD graduate students have a fellowship: their tuition paid by the university and some even given a small stipend and subsidized housing – so they can squeak by without paying a penny. Others had to take a research or teaching assistanthip in the univeristy to cover the tuition and stipend, something very doable. That’s what I and my friends who got PhDs in physics, engineering, biology did. BTW, my husband and I, both PhDs, didn’t have any student debt.

Of course, there are costs of missed opportunities of investment, like savings for retirement, etc.

[Scarlett]

The cost of graduate studies in science is really MINIMAL. Many PhD graduate students have a fellowship: their tuition paid by the university and some even given a small stipend and subsidized housing – so they can squeak by without paying a penny. Others had to take a research or teaching assistanthip in the univeristy to cover the tuition and stipend, something very doable. That’s what I and my friends who got PhDs in physics, engineering, biology did. BTW, my husband and I, both PhDs, didn’t have any student debt.

Of course, there are costs of missed opportunities of investment, like savings for retirement, etc.

[Scarlett]

The cost of graduate studies in science is really MINIMAL. Many PhD graduate students have a fellowship: their tuition paid by the university and some even given a small stipend and subsidized housing – so they can squeak by without paying a penny. Others had to take a research or teaching assistanthip in the univeristy to cover the tuition and stipend, something very doable. That’s what I and my friends who got PhDs in physics, engineering, biology did. BTW, my husband and I, both PhDs, didn’t have any student debt.

Of course, there are costs of missed opportunities of investment, like savings for retirement, etc.

[Scarlett]

The cost of graduate studies in science is really MINIMAL. Many PhD graduate students have a fellowship: their tuition paid by the university and some even given a small stipend and subsidized housing – so they can squeak by without paying a penny. Others had to take a research or teaching assistanthip in the univeristy to cover the tuition and stipend, something very doable. That’s what I and my friends who got PhDs in physics, engineering, biology did. BTW, my husband and I, both PhDs, didn’t have any student debt.

Of course, there are costs of missed opportunities of investment, like savings for retirement, etc.

[bearishgurl]

[quote=Scarlett]The cost of graduate studies in science is really MINIMAL. Many PhD graduate students have a fellowship: their tuition paid by the university and some even given a small stipend and subsidized housing – so they can squeak by without paying a penny. Others had to take a research or teaching assistanthip in the univeristy to cover the tuition and stipend, something very doable. That’s what I and my friends who got PhDs in physics, engineering, biology did. BTW, my husband and I, both PhDs, didn’t have any student debt.

Of course, there are costs of missed opportunities of investment, like savings for retirement, etc.[/quote]

Good for YOU and Rhett, Scarlett!!

[bearishgurl]

[quote=Scarlett]The cost of graduate studies in science is really MINIMAL. Many PhD graduate students have a fellowship: their tuition paid by the university and some even given a small stipend and subsidized housing – so they can squeak by without paying a penny. Others had to take a research or teaching assistanthip in the univeristy to cover the tuition and stipend, something very doable. That’s what I and my friends who got PhDs in physics, engineering, biology did. BTW, my husband and I, both PhDs, didn’t have any student debt.

Of course, there are costs of missed opportunities of investment, like savings for retirement, etc.[/quote]

Good for YOU and Rhett, Scarlett!!

[bearishgurl]

[quote=Scarlett]The cost of graduate studies in science is really MINIMAL. Many PhD graduate students have a fellowship: their tuition paid by the university and some even given a small stipend and subsidized housing – so they can squeak by without paying a penny. Others had to take a research or teaching assistanthip in the univeristy to cover the tuition and stipend, something very doable. That’s what I and my friends who got PhDs in physics, engineering, biology did. BTW, my husband and I, both PhDs, didn’t have any student debt.

Of course, there are costs of missed opportunities of investment, like savings for retirement, etc.[/quote]

Good for YOU and Rhett, Scarlett!!

[bearishgurl]

[quote=Scarlett]The cost of graduate studies in science is really MINIMAL. Many PhD graduate students have a fellowship: their tuition paid by the university and some even given a small stipend and subsidized housing – so they can squeak by without paying a penny. Others had to take a research or teaching assistanthip in the univeristy to cover the tuition and stipend, something very doable. That’s what I and my friends who got PhDs in physics, engineering, biology did. BTW, my husband and I, both PhDs, didn’t have any student debt.

Of course, there are costs of missed opportunities of investment, like savings for retirement, etc.[/quote]

Good for YOU and Rhett, Scarlett!!

[bearishgurl]

[quote=Scarlett]The cost of graduate studies in science is really MINIMAL. Many PhD graduate students have a fellowship: their tuition paid by the university and some even given a small stipend and subsidized housing – so they can squeak by without paying a penny. Others had to take a research or teaching assistanthip in the univeristy to cover the tuition and stipend, something very doable. That’s what I and my friends who got PhDs in physics, engineering, biology did. BTW, my husband and I, both PhDs, didn’t have any student debt.

Of course, there are costs of missed opportunities of investment, like savings for retirement, etc.[/quote]

Good for YOU and Rhett, Scarlett!!

[Coronita]

[quote=Scarlett]I am with UCGal about this one – mainly…

I am going to take the middle ground in this match. I have close friends that are almost in the same situation as sdr’s friend. Those people can rent a nice pretty big house, pay debt and save for downpayment. They can still have a very good lifestyle. But for such high income and good debt to loan ratios I think it would be a reasonable exception for the downpayment to be 10% and not 20% if they don’t have any student loans debt. Very low risk – for the current conditions.

(begin rant) Since sdr talked about advanced degrees, I have a PhD and for people like us there wouldn’t be any exceptions made… PhDs won’t ever have the income the MDs have, not even half of that. If we get into six figures that’s very fortunate and happens after 6 years of grad studies, 3-6 years of postdocs with salaries in the 20s and 30s (usually when they start having kids in their 30s) and a few more years in industry or as an assistant professor. So it’s around age 40 – when one finally is able to START saving for downpayment (from previous salaries, barely enough to save some for retirement). True, they won’t have much student debt (usually PhD students are payed a very modest stipend or they help with research and teaching). Same type of sacrifices. How long do you think it takes a pair of PhDs to save 100K for a house that’s going to be much less than the one that your doctor friend would buy (guaranteed!). yeah, quite a few years. What quality of life is that, sdr? Are you saying MDs more deserving that PhDs? (end rant)[/quote]

Doctors have to deal with things most phd’s or enginerds (inclusive) for that matter don’t have to ….And it’s simple…

Liability.

As much as you and I would like to think enginerds are really that important. In reality if one of us screws up, no one is really going to die from it. Same cannot be said for doctors. And since it takes years of intense training/specialization (of which most people can’t do), simple risk/reward/supply and demand.

And unfortunately, there is no correlation between how much one studies, degrees,etc and how much one is paid.

A stripper probably makes more than me, as do drug dealers. And I’m sure some administrators that work at the Municipal Water District probably make a hell of lot more than some phd biologist. Fair? Nope….Oh well.

[Coronita]

[quote=Scarlett]I am with UCGal about this one – mainly…

I am going to take the middle ground in this match. I have close friends that are almost in the same situation as sdr’s friend. Those people can rent a nice pretty big house, pay debt and save for downpayment. They can still have a very good lifestyle. But for such high income and good debt to loan ratios I think it would be a reasonable exception for the downpayment to be 10% and not 20% if they don’t have any student loans debt. Very low risk – for the current conditions.

(begin rant) Since sdr talked about advanced degrees, I have a PhD and for people like us there wouldn’t be any exceptions made… PhDs won’t ever have the income the MDs have, not even half of that. If we get into six figures that’s very fortunate and happens after 6 years of grad studies, 3-6 years of postdocs with salaries in the 20s and 30s (usually when they start having kids in their 30s) and a few more years in industry or as an assistant professor. So it’s around age 40 – when one finally is able to START saving for downpayment (from previous salaries, barely enough to save some for retirement). True, they won’t have much student debt (usually PhD students are payed a very modest stipend or they help with research and teaching). Same type of sacrifices. How long do you think it takes a pair of PhDs to save 100K for a house that’s going to be much less than the one that your doctor friend would buy (guaranteed!). yeah, quite a few years. What quality of life is that, sdr? Are you saying MDs more deserving that PhDs? (end rant)[/quote]

Doctors have to deal with things most phd’s or enginerds (inclusive) for that matter don’t have to ….And it’s simple…

Liability.

As much as you and I would like to think enginerds are really that important. In reality if one of us screws up, no one is really going to die from it. Same cannot be said for doctors. And since it takes years of intense training/specialization (of which most people can’t do), simple risk/reward/supply and demand.

And unfortunately, there is no correlation between how much one studies, degrees,etc and how much one is paid.

A stripper probably makes more than me, as do drug dealers. And I’m sure some administrators that work at the Municipal Water District probably make a hell of lot more than some phd biologist. Fair? Nope….Oh well.

[Coronita]

[quote=Scarlett]I am with UCGal about this one – mainly…

I am going to take the middle ground in this match. I have close friends that are almost in the same situation as sdr’s friend. Those people can rent a nice pretty big house, pay debt and save for downpayment. They can still have a very good lifestyle. But for such high income and good debt to loan ratios I think it would be a reasonable exception for the downpayment to be 10% and not 20% if they don’t have any student loans debt. Very low risk – for the current conditions.

(begin rant) Since sdr talked about advanced degrees, I have a PhD and for people like us there wouldn’t be any exceptions made… PhDs won’t ever have the income the MDs have, not even half of that. If we get into six figures that’s very fortunate and happens after 6 years of grad studies, 3-6 years of postdocs with salaries in the 20s and 30s (usually when they start having kids in their 30s) and a few more years in industry or as an assistant professor. So it’s around age 40 – when one finally is able to START saving for downpayment (from previous salaries, barely enough to save some for retirement). True, they won’t have much student debt (usually PhD students are payed a very modest stipend or they help with research and teaching). Same type of sacrifices. How long do you think it takes a pair of PhDs to save 100K for a house that’s going to be much less than the one that your doctor friend would buy (guaranteed!). yeah, quite a few years. What quality of life is that, sdr? Are you saying MDs more deserving that PhDs? (end rant)[/quote]

Doctors have to deal with things most phd’s or enginerds (inclusive) for that matter don’t have to ….And it’s simple…

Liability.

As much as you and I would like to think enginerds are really that important. In reality if one of us screws up, no one is really going to die from it. Same cannot be said for doctors. And since it takes years of intense training/specialization (of which most people can’t do), simple risk/reward/supply and demand.

And unfortunately, there is no correlation between how much one studies, degrees,etc and how much one is paid.

A stripper probably makes more than me, as do drug dealers. And I’m sure some administrators that work at the Municipal Water District probably make a hell of lot more than some phd biologist. Fair? Nope….Oh well.

[Coronita]

[quote=Scarlett]I am with UCGal about this one – mainly…

I am going to take the middle ground in this match. I have close friends that are almost in the same situation as sdr’s friend. Those people can rent a nice pretty big house, pay debt and save for downpayment. They can still have a very good lifestyle. But for such high income and good debt to loan ratios I think it would be a reasonable exception for the downpayment to be 10% and not 20% if they don’t have any student loans debt. Very low risk – for the current conditions.

(begin rant) Since sdr talked about advanced degrees, I have a PhD and for people like us there wouldn’t be any exceptions made… PhDs won’t ever have the income the MDs have, not even half of that. If we get into six figures that’s very fortunate and happens after 6 years of grad studies, 3-6 years of postdocs with salaries in the 20s and 30s (usually when they start having kids in their 30s) and a few more years in industry or as an assistant professor. So it’s around age 40 – when one finally is able to START saving for downpayment (from previous salaries, barely enough to save some for retirement). True, they won’t have much student debt (usually PhD students are payed a very modest stipend or they help with research and teaching). Same type of sacrifices. How long do you think it takes a pair of PhDs to save 100K for a house that’s going to be much less than the one that your doctor friend would buy (guaranteed!). yeah, quite a few years. What quality of life is that, sdr? Are you saying MDs more deserving that PhDs? (end rant)[/quote]

Doctors have to deal with things most phd’s or enginerds (inclusive) for that matter don’t have to ….And it’s simple…

Liability.

As much as you and I would like to think enginerds are really that important. In reality if one of us screws up, no one is really going to die from it. Same cannot be said for doctors. And since it takes years of intense training/specialization (of which most people can’t do), simple risk/reward/supply and demand.

And unfortunately, there is no correlation between how much one studies, degrees,etc and how much one is paid.

A stripper probably makes more than me, as do drug dealers. And I’m sure some administrators that work at the Municipal Water District probably make a hell of lot more than some phd biologist. Fair? Nope….Oh well.

[Author]

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