Temptation

[wishywish82]

Anyone get a look at the LOC we're available to get as dental students? These things are huge! 150K with 6% interest. I don't know about the rest of you but it's going to be very very tempting for me to want to put that money into the stock market make interest on it and take it out as I need it. What do you guys think??

[AllSmiles]

Lol...my Dad actually mentioned this to me... he said scrimp, and then invest it...can we do that? Because maybe we could at least cover some of the interest we'll have to pay..

[mkmkhan]

I'm thinking of using that to buy a nice condo

Im not really down with the stock market otherwise, i'd prolly give it a shot

[AllSmiles]

How will you be able to buy a condo? Won't you have to pay for tuition and all the extras?

[mkmkhan]

haven't figured it out yet

but, likely by getting into debt

[AllSmiles]

Ha....I plan on living like a pauper... I want to have the least amount of debt as possible.

[mkmkhan]

Yea, it's personal I suppose

 

Being living at home for the past 6 yrs of university basically has burned me out...Time to reward myself

 

Financially, you'll make it back ...so it's not a huge deal if you're 50,000 or 100,000 in debt.

[Adversary]

If you choose to invest the LOC, you will need to make more than the prime interest rate they charge. I do not know that much about financial investment, but would you be able to ensure a return that is more than prime?

 

There is one good thing about the LOC, it's at prime which is a very cheap line of credit - some colleagues use a portion of it to buy a car, etc.

 

One caution - do not go overboard with spending. Remember you still have to pay it back + interest.

[mkmkhan]

pm'ed u adversary

[dentfloss]

Do you think we would qualify for both a mortgage and a LOC? I will need the LOC for tuition.

[Adversary]

Well, that is something you have to ask the account manager about. Remember, the original intent of the LOC is to help you pay for your education and daily necessities. However, the freedom to use it for whatever you need remains.

 

I do not know whether you can get a mortgage on top of your LOC. I would imagine your credit history and current status would come into play. I do know that you can qualify for a separate loan to buy a car. HOWEVER, even the account manager suggested using the LOC to buy a car as the interest rate is LOWER for the LOC than the additional car loan.

[dr.drill]

Do you think we would qualify for both a mortgage and a LOC? I will need the LOC for tuition.

 

I know lots of people who have gone overboard with their LOC.

 

The classic line is "ahhh ... I'm already $100,000 in debt. Whats $2000 more". This can snowball quickly.

 

As dental students and dentists you will quickly notice that banks will give you anything you want. Why? Because there is a very good odds that you will be able to pay them back (with a lovely chunk of interest).

 

I used my LOC to buy a condo, which, over the 4 years I was in dental school made me $70,000. I got in and out of the market at the right time and bought in the right area.

[wishywish82]

Drill i'm in terested in that too, can you pm me some more info on the condo dealings?

[mkmkhan]

I have been interested in buyin a condo for a while now. But, everyone seems to be antagonizing my idea.

 

Dr. Drill, where'd you buy that??????

 

Let us know more if you could

[dr.drill]

Very close to campus when I was at U of A.

Bought it first year of dental school and sold it when I graduated. Timing worked out to be perfect as the market got hot just as I sold it.

 

Bought it for $110,000. Sold it for just over $200,000 4 years later after putting $10,000 in for renovations.

 

Back then federal/provincial loans maxed out just under $90,000. My loans were cut down to ~ $65,000 by the govt. Paid with my profits from my condo. Left dentistry with no debt.

 

You can't lose getting into the real estate market close to campus if you watch market trends and pick the right place at the right time.

[Tode]

Dr. Drill you have a good point about real estate, but you can't expect the same kind of boom everywhere else in the country as compared to Edmonton (and the rest of Alberta)

[wishywish82]

realistically tho buying is better than renting i've been renting for almost 3 years and there's nothing more frustrating than flushing my money down the toilet monthly

[Tode]

I totally agree: I think buying is much smarter than renting. More so for an older house than a condo, there's so much more risk and responsibility than just renting. You really have to do your research before you buy.

 

Actually there's a good chance that if I get into UWO (crossing my fingers) that I'm going to buy something in London, because like you said it's pretty irritating just flushing your money down the toilet.

[mkmkhan]

Bottom line: Make sure you calculate the numbers the right way. Don't jump into it. I will not be buying a condo based on numbers strict.

 

Conclusion: Rent is an EXPENSE but ....its not as much as buying.