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Wise friends of the MB: Am I anywhere close to buying a home? UPDATED pg. 3
Posted on 4/7/15 at 7:50 pm
Posted on 4/7/15 at 7:50 pm
What would you do in my scenario? I'm off for spring break and my wandering mind is getting the best of me.
The specs:
Not married
Income- minimum gross is $3,232 but I usually make around $3,400
Can make an extra 2-3k this summer.
Can get reimbursed up to 4k for teaching certification this summer
Debt
Car- $9600 ($257/month)
Credit Card- $1,799 (will be gone in four months) 0% apr
Student loan-$7,000 (I pay $250/month) 0% apr
That's it.
I have $1,000 emergency fund and a few grand in investments.
I'm currently paying ONE HUNDRED dollars per month in rent. I do not live with my parents, and I am fairly happy, but I'm getting the fever.
I pay about $1200/month toward my debt to knock it out.
I don't save much at all. I contribute to my Roth and buy $100 worth of Ford instead (god I'm an idiot)...
I would love to buy a house that is more convenient to the center of the greatest city on earth, Baton Rouge. I currently live in Central which is always 25-30 minutes from nice things.
When would you buy? Where would you buy? I'd prefer not to lose money from this hypothetical purchase.
Long commute to work is not an issue. I work a fair distance west of Baton Rouge.
The specs:
Not married
Income- minimum gross is $3,232 but I usually make around $3,400
Can make an extra 2-3k this summer.
Can get reimbursed up to 4k for teaching certification this summer
Debt
Car- $9600 ($257/month)
Credit Card- $1,799 (will be gone in four months) 0% apr
Student loan-$7,000 (I pay $250/month) 0% apr
That's it.
I have $1,000 emergency fund and a few grand in investments.
I'm currently paying ONE HUNDRED dollars per month in rent. I do not live with my parents, and I am fairly happy, but I'm getting the fever.
I pay about $1200/month toward my debt to knock it out.
I don't save much at all. I contribute to my Roth and buy $100 worth of Ford instead (god I'm an idiot)...
I would love to buy a house that is more convenient to the center of the greatest city on earth, Baton Rouge. I currently live in Central which is always 25-30 minutes from nice things.
When would you buy? Where would you buy? I'd prefer not to lose money from this hypothetical purchase.
Long commute to work is not an issue. I work a fair distance west of Baton Rouge.
This post was edited on 7/19/15 at 3:15 pm
14
Posted on 4/7/15 at 8:06 pm to bayoubengals88
At first glance it looks like you should try to build up your emergency fund before investing in a house. If you were to buy a house today and lose your job tomorrow, you would have to support the new mortgage plus your current debt payments on $1,000 savings. You should also consider if you will be required to put money down or pay closing costs.
Posted on 4/7/15 at 8:06 pm to bayoubengals88
quote:. Pay this as long as possible
ONE HUNDRED
Posted on 4/7/15 at 8:07 pm to bayoubengals88
I would save up more money for a down payment on a home. Plus if it's your first home you'll have to furnish, buy a lawn mower. All that stuff adds up real fast.
Will oil prices being down in BR soften up the real estate market there?
Will oil prices being down in BR soften up the real estate market there?
This post was edited on 4/7/15 at 8:09 pm
Posted on 4/7/15 at 8:38 pm to bayoubengals88
How old are you? Any chance of moving out of state? If I was in your shoes, single with no kids, I wouldn't want to tie myself down with a house. $100 a month in rent is basically free. Is the situation hurting you in the woman department? If not, I would ride it out as long as possible. Save your money up as long as possible. If you plan to stay here long term, put together a plan so that you can put a nice down payment down as well as have plenty money for furnishing the new house and then look at houses
Posted on 4/7/15 at 8:53 pm to bayoubengals88
Owning (having a mortgage) is overrated IMO.
I would not buy.
Consider:
1. Payoff your debts.
2. Max retirement savings
3. Travel.
I would not buy.
Consider:
1. Payoff your debts.
2. Max retirement savings
3. Travel.
Posted on 4/7/15 at 9:36 pm to bayoubengals88
I think just have a case of the grass is greener... Just be happy you aren't having to pay for the upkeep of that grass, pay a mortgage, fix the ac...
You are very lucky To have a decent place for $100, take advantage of that as long as you can.
You are very lucky To have a decent place for $100, take advantage of that as long as you can.
Posted on 4/7/15 at 9:49 pm to bayoubengals88
$100/mo is ridiculous. Do that for as long as possible and invest your money in other arenas.
Posted on 4/7/15 at 10:12 pm to bayoubengals88
Seems like you really love Baton Rouge and willing to set roots here. Nothing wrong with that.
I was similar to your situation near your age. What I would do is:
1 pay off all your debt.
2 save a good amount for a down payment
3 since you are single and don't need too much space, instead of buying a house, I would buy a duplex in a good neighborhood(garden district, mid city). You can get a good one for 190K. Finance it for 15 years. With the rental income, you're mortgage payment won't be that bad. And you'll increase your equity faster over time.
4. You can always buy a house later
I was similar to your situation near your age. What I would do is:
1 pay off all your debt.
2 save a good amount for a down payment
3 since you are single and don't need too much space, instead of buying a house, I would buy a duplex in a good neighborhood(garden district, mid city). You can get a good one for 190K. Finance it for 15 years. With the rental income, you're mortgage payment won't be that bad. And you'll increase your equity faster over time.
4. You can always buy a house later
Posted on 4/7/15 at 11:03 pm to bayoubengals88
quote:
Car- $9600 ($257/month)
Credit Card- $1,799 (will be gone in four months) 0% apr
Student loan-$7,000 (I pay $250/month) 0% apr
That's it.
Work this down to nothing.
quote:
I have $1,000 emergency fund and a few grand in investments.
Get this to about $10k
quote:
I contribute to my Roth and buy $100 worth of Ford instead (god I'm an idiot)...
Get this to 15% of your gross.
Then lets talk about a house. If you're motivated, this can happen in 2 years. Get to it.
Posted on 4/8/15 at 9:00 am to bayoubengals88
Cash on hand seems low. Last i looked, FHA required 3.5% down, plus you will need closing costs as well.
If you go traditional loan you will need a min of 5% down.
Only loan i can think of that is still 100% financing is a Rural Development loan, and since you want center of city, you will not find that available in the city.
On a $200k house, 3.5% down + closing will be in the $10k out of pocket range, unless u can get the seller to pay some or all of the closing costs.
If you go traditional loan you will need a min of 5% down.
Only loan i can think of that is still 100% financing is a Rural Development loan, and since you want center of city, you will not find that available in the city.
On a $200k house, 3.5% down + closing will be in the $10k out of pocket range, unless u can get the seller to pay some or all of the closing costs.
Posted on 4/8/15 at 10:10 am to bayoubengals88
Given the numbers, you can be debt free within two years easy. 1 year if you buckle down and eat beans.
Posted on 4/8/15 at 10:21 am to bayoubengals88
Back in the day -I was married with a combined income of 75k or so and still managed apartment complexes so I could get the free rent. That built a pretty sizeable nest-egg. The thing is-you should always sacrifice where you can when younger, as it gets exponentially more difficult as you get older. I'd stay put as long as I could if I were you, pay down your debt and build a nest egg.
Posted on 4/8/15 at 11:01 am to bayoubengals88
quote:Unless it's a crack house stay here as long as possible. Be patient.
I'm currently paying ONE HUNDRED dollars per month in rent. I do not live with my parents, and I am fairly happy, but I'm getting the fever.
Posted on 4/8/15 at 1:37 pm to bayoubengals88
You can buy a house responsibly anytime as long as you have the 6+month emergency fund saved up, 20% to put down on the house and are putting at least 15% back into your retirement portfolio.
Can you buy before that? Sure. But you'll save yourself a ton of money in the long run if you wait for those conditions to be met.
Can you buy before that? Sure. But you'll save yourself a ton of money in the long run if you wait for those conditions to be met.
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