| Which Way to Go? Home or Debt? |
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Atalien
New Member
Cash: $ 1.85
Posts: 9
Joined: 31 Jan 2012
Location: Atlanta
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@fast
No reason to be sorry, I'm asking the question because I myself have reservations about purchasing in this situation and it seems others do as well. While my monthly expenses wouldn't change, I would be now locked in because of the mortgage which could turn ugly if something happened.
@littleroc
Thanks again for answering another question. I understand your point of view, especially since you went through what you did.
Update:
After reviewing our budget it seems we have $1700 to put towards debt or save for a condo that does not include selling the car which we are looking into now. Which would put us at $2100.
We have separate main accounts and one joint account we pay bills from. I wasn't sure how much she had left over after paying bills and taking an amount out for herself so I was just using what I had left over which was $1200. So currently our monthly obligations are $3100, including the car, $2700 without and 5248 coming in after taxes and retirement savings.
Our plan more than likely will be to sell the car, and look for places near the end of this year. Building our emergency funds to 6 months, and using a FHA (3.5%) to purchase the condo.
In the event we don't find anything at that time (anything we like under 175k), we will pay off as many of the school loans with the cash on hand(excluding the emergency fund) and sign a shorter lease and continue looking.
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Thu Feb 02, 2012 7:04 pm |
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littleroc02us
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Cash: $ 384.35
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I think your thinking much clearer then you were before and that's great!
Risk comes from not knowing what you're doing. (Warren Buffet)
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Thu Feb 02, 2012 10:15 pm |
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Atalien
New Member
Cash: $ 1.85
Posts: 9
Joined: 31 Jan 2012
Location: Atlanta
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Just wanted to give you guys an update. Not sure if you guys care or not, but your always giving advice and I rarely see people tell you how things ended up going.
Well we were able to close on a condo last week for 160k. After the HOA and mortgage/taxes/interest we are looking at almost the same amount per month for living expenses.
We sold the car for 2k more than what was owed and have erased that debt since the middle of February. Its amazing how much it was costing us outside of the monthly payment alone. (gas, insurance, taxes, etc.) It easily freed up another $500-$600 a month.
We currently have 6 months of monthly expenses saved and will begin paying off her school loans now. We have about $2000 per month to put towards them, so hopefully they will be paid in full in a couple of years. 
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Wed Jun 13, 2012 2:14 pm |
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littleroc02us
Moderator
Cash: $ 384.35
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Joined: 09 Feb 2009
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It' nice to hear that positive things are happening in your life. Keep rocking those debts..
Risk comes from not knowing what you're doing. (Warren Buffet)
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Wed Jun 13, 2012 2:32 pm |
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oldguy
Senior Member
Cash: $ 751.85
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Location: arizona
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quote:
Just wanted to give you guys an update. Not sure if you guys care or not, but your always giving advice and I rarely see people tell you how things ended up going.
Thank you - it's fun to hear good results. Congratulations on the condo. And it appears that the SL will be gone in about 20 months, great!
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Wed Jun 13, 2012 5:13 pm |
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kellogg9
New Member
Cash: $ 1.50
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Joined: 10 Jul 2012
Location: Toronto
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| Re: Which Way to Go? Home or Debt? |
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quote:
Originally posted by Atalien
I am looking for some advice as to whether to buy a home or to wait and pay off debt.
For an overview of our situation:
Our gross income is about 94 (60k @ my job which is very stable. 34k at hers which is somewhat stable). We also have 3 months emergency funds saved.
Loans:
Car Loan 15k at 4.35%
School Loans 38k @6.5%
For retirement:
I am 23 and my wife is 26. I am contributing 6% of my salary to my 401k which is matched at a maximum of 3.5% of my salary. Also I add another $200 per month to my roth IRA which is invested in target funds with vanguard. My wife is contributing about 3% into her 401k.
Currently we are paying $1405 for a 2 bedroom apartment in the middle of Atlanta. We are flirting with the idea of buying a 2 bedroom condo here instead, since the housing market in ATL is pretty down. We are looking for a max 200k place, but would like to be around 150-175k.
The question is are we stable enough to make this move now? We are able to either pay down debt at a $1200 a month rate or save $1200 a month and pay minimums on the loans for a decent down payment at the leases end.
Based on your situation it seems more logical to pay off your debt. I have had several friends who have been in a similar situation (not a house but buying car vs paying debt, etc) and they ended up being less responsible in keeping up with debt payments and ended up in a bigger hole. Maybe a half-and-half thing? But honestly paying the debt is the better option in your case.
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Tue Jul 10, 2012 10:23 am |
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