Purchasing a home may be the most financially sound housing decision for a student at this stage of the game.  Interest rates have hovered at around 7.0% for a 30-year mortgage throughout the past year, providing a good incentive to buy.  The problem is, most people think they cannot get approved for a housing loan because of their current financial situation.  If you can show proof of income and can get a co-signer, if you have a spouse that works and minimal debt, or if you have a parent or family member who is willing to invest in some real estate, you might want to think about buying a home.  Even if your only income is student loans, you may still qualify for a loan if you have good credit and some savings or investments.  If you are having trouble with FRA or conventional loans, you should look for a "non-qualifying assumable loan," but be prepared to take an interest rate higher than 7.0%. Assumable loans in general require less initial investment than conventional loans.  You will be in San Antonio for at least four years, and throwing money away on renting another apartment for that amount of time may not be too appealing.

Several new subdivisions have opened up near the Medical Center within the past few years, providing many students with opportunities to purchase homes close to school.  One area has just opened up that is less than two miles away from school.  You can build a new home in four months for about $700 a month, depending on how much you put down and how large a home you want.  An older home many be around $600 a month for a 65-70K home, which includes your mortgage, taxes and insurance.  Many students have bought homes or condominiums near the Medical Center and are pleased to find that they are paying LESS in their mortgage payment than they had been paying in RENT. A good real estate agent is invaluable, and can help in locating a home or condo.  YOU, AS THE BUYER, DO NOT PAY FOR THEIR SERVICES.  THE SELLER PAYS THE AGENT.  Buying a home takes time, so plan ahead.

Advice for Homebuyers

ADVANTAGES TO BUYING A HOME: You do not throw your money away every month on rent.  Instead, you are investing in property.  Theoretically, you should recover your investment (at the very least) when you sell the house.  Plus, your payments are set; you do not have to worry about rent increases.  Nor do you have to deal with a landlord or worry whether your home may be sold during your time in San Antonio.  In addition, you can give your home your own personality.  This is especially important if you have a spouse and/or children who will probably spend more time at home than you.  If you have an income, for example, from a home business or from a spouse that works, monthly interest and taxes on the home in addition to any that you pay at closing are tax-deductible.  If you have a family member that invests in a home for you, they may receive a tax break.  There tend to be many more homes for sale than for rent in the neighborhoods near the Medical Center.  As a result, you have more control over where you live than you do if you rent.

DISADVANTAGES TO BUYING A HOME:  You are responsible for maintenance of the house and the lawn.  This is in some ways an advantage, because you have control over what is done and when.  You pay property taxes and homeowners insurance, but these costs are added into your monthly payment to the mortgage company and still may be cheaper than rent.  You eventually have to sell, which could drag, but most nice houses go quickly because of the growing market in San Antonio.  Generally an initial investment is required.  If you go FHA and get approved either on your own or with a cosigner, you only have to put down 3.0%, and with closing costs, that is not so bad.  However, if you get a conventional loan, you have to put down 10%.  Also, if your parent or family member invests, they will have to come up with 20% because it would then be treated as an investment property.  Look into home buying.  It may or may not be ideal for you.