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It all depends on your debt payments to income (all debt including the mortgage). There are tons of up to date loan guidelines and calculators online. Whether you should buy a house sometime soon after graduation is another question entirely. I don't think it's a great idea unless you know you'll be there for a while including having room to start a family if that's in your cards in the future. Renting gives you a lot of flexibility.

Usually, banks treat fixed debt as coming right off your net income. Therefore, if you’re netting $8k a month, plus $2k in student loans, they’ll evaluate you similarly to how someone would be netting $6k a month. There are a lot of nuances, but the debt-to-income ratio is pretty standard across the board.

Live cheaply and crush that debt. And buy a small starter home.

My classmates who went to work in Atlanta/Cleveland/Chicago/Charlotte etc after bschool bought houses almost immediately after graduating. Those of us who went off to SF/NY/HK/etc are still getting crushed by cost of living, so it seems like most ppl are just renting (progressively nicer pads) and paying down loans. It's annoying because a couple bonuses in you still don't really feel like you have much of a downpayment... but I guess in the long run I'll be glad to have shed the student loans.

Buying a coffin, I mean house, is overrated. Just pay your debt down and be free. Houses are only liquid given a long enough time line to unload them. If you're early in your career the last thing you need is inflexibility.

Wait a few years. Pay down the debt and accumulate some reserves (i.e., cash/investments). Lenders will definitely consider the latter when evaluating your credit and can (and will) make exceptions. Plus, your income will be higher at that point. Don't force yourself into a house with your current financial constraints. Chances are you will regret the decision a few years down the road and feel compelled to move/buy again.

All of the advice to wait makes sense, but man it sucks to burn $25k+ a year when you could be building equity.

Disclosure: I am also a licensed realtor.

Here's my honest opinion.

Regardless of whether you decide to buy now, or buy later:

1. Figure out what your max budget is for your first home. Your actual budget should be 2/3rds to half that max number.

2. The main purpose of your first home is to build equity. Your first home isn't your forever home. It's there to build equity that you can (hopefully) roll over to a larger home as your life changes (family).

3. Buy a home for your current needs. Again, it's a starter home. Don't buy a 5-bedroom for your future kids in 5-10 years that you don't have yet. There is not a one-size-fits-all home for your entire life.

A good litmus test for the kind of home you should buy is this: it shouldn't be much of an upgrade (if at all, and possibly a downgrade in high cost cities) from what you're currently renting. If you're looking to buy a substantially nicer place in the same neighborhood that you're currently renting, you're probably stretching your budget a bit too much.

Oftentimes, the buying process for many of you won't be done solo, but will be a joint process with your spouse or partner. And that can be more complicated, as your other half may be less realistic, or may need more convincing when it comes to compromising.

Also for many of you, what I suggest is to save like hell right after b-school. Pay down that student loan debt. Live as frugally as you can. The more you can save now, the more grateful your future self (in your 40s) will be. With the above in mind, if you're living/working in NYC, SF, Boston, London, etc chances are buying a home right away is a non-starter (and even if you have family that will help you put down a humongous down payment, say 40-50% down, it still may not be worth it). Furthermore, as many have said here, in your first few years post-MBA, there will be a lot of horse trading going on in terms of jobs - there's a very high chance you won't be in your first post-MBA job for long (probably 1-2 years). You will be changing jobs, moving from one city to the next, and so forth for probably the first 3-5 years post-MBA, before you start to settle in on one city. And this kind of movement can be random: maybe you're at a job for 2 years, then another for just 6 months (because you end up hating it quick), and then another gig for 18 months. Eventually that settling in usually happens because of a combination of work (you find a work/lifestyle that suits you) as well as personal (you get married, have kids, etc).

Of course there's not a one-size-fits-all for every MBA grad, but for most of you, the first 5 years post-MBA from a financial standpoint should be dedicated towards paying down as much of that student loan debt as you can, saving your money and putting yourself in a position 5-10 years out to settle in (and it's then when it's the ideal time to think about buying your first home - when you aren't moving around as much, and when you likely have enough saved up for a sizeable downpayment).

I'm completely with @"IlliniProgrammer" here that the financial benefits of owning vs. renting are not necessarily as great or obvious as they're often made out to be. Here's the back of the envelope math I've done for the SF area:

Option 1: Rent place for $4,000/month ($48k a year).
Option 2: Buy a comparable place, roughly $1.2mm

The costs associated with option 1 are fairly straightforward; $4k a month. You're not on the hook for any maintenance, property tax, HOA fees etc.

Costs for Option 2: This assumes a 10% downpayment ($120k). Not sure if you can actually buy anything with 10% down out here, but for argument's sake... Mortgage payment using 5/1 ARM plus PMI insurance (3.71% effective rate): $5,023 Property Tax: $1,100 HOA Fees: $200 Maintenance/Repairs: $167 (assumes $2k a year) Less: Mortgage Interest Deduction: ($758) All-In Monthly Cost of Ownership: $5,732

So, on it's face, owning tends to be about $1,700 more a month than renting, which translates to about $21k a year. However, offsetting that, you are going to be building equity in your home. I get $20,208 in equity built over the first year, $21k over the second, $21.7k over the third, etc. So you can see, the equity you're building in those first few years is almost exactly equal to the savings you would generate by renting. So as far as I'm concerned, it really comes down to personal preference. Do you want to be able to do remods and change some walls around to your liking? Do you like the idea of a forced savings program where you are steadily building equity over time? Do you hate the idea of paying 6% in a few years if it turns out you need to move? Would you rather have liquid savings, or would you prefer to be 9x levered to the local housing market? Will you stay up at night wondering if/when the "Big One" is gonna to hit and destroy your home and life savings? Where is your conviction level on the path of real estate prices?

Obviously the math will vary in different metros, but for SF I just don't see much of a FINANCIAL reason to own vs. renting. Again, if you have a fat downpayment (e.g. $400k+ out here) than the story becomes completely different...

Not to mention a tax shelter. Net net buying a home you will live in and paying cash is equivalent to investing in a Roth IRA. The rent you avoid paying never gets taxed as income.

Check out SoFi.com. It was premised on the idea that well educated younger professionals with high income should be superior credit risks on their student loans than the general population in the government-dominated student loan market. They're now taking it a step further by offering mortgages (on a limited basis to date) to that same customer base which is not well served by typical underwriting criteria in the traditional banking system, i.e. younger folks with high income (and also quite employable in any economy) who don't have 2 year working histories at current job, high amount of student loans, no significant wealth/collateral/down-payment, who live in high COL MSAs. The result is a 10% down payment jumbo mortgage with NO PMI at credit limits far higher than traditional lenders at reasonable mortgage rates. It may or may not alter your decision, but I think it's a great idea and product.

There is insurance. The probability of a loss on a house in FL from a hurricane is multiples that from a quake in CA. Just because you can see it coming a few days before doesn't mean you can mitigate the loss much anyway.

No factors in intangibles. Like you get more than 4 walls with an apt. Most come with gyms, door man, maintenance, etc. No upkeep whatsoever. No redoing a kitchen or bathroom. You can choose the space you need perfectly. You have ultimate flexibility for jobs and life events.

Buying a house is fine, but renting has its benefits also. It isn't black and white.

This has been very helpful! Especially, the SOFI thing (I use commonbond for mba loans, so very interested in this)

Anybody have specific information about LA buying a house versus renting for post-MBA consulting level salary?