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Started By
Message
Can I afford a home?
Posted on 1/4/16 at 7:56 pm
Posted on 1/4/16 at 7:56 pm
I am not really looking to buy soon but one day I may. Can I afford a house or condo? If so, how much?
Martial status: single
Children: None
Age: 29
Salary: 65k
Current debt: 0. (Nothing. No student loans, no vehicle, no credit cards carried over every month.)
401k/Roth IRA: 50K
Emergency Fund: 10K
Saving/Other Investments (Mutual Funds, Stocks): 65K
Current rent: 725/month
Don't need a new vehicle now but I will eventually (my car is a 2006 with 130K miles). When needed I'll get something low end like a Civic. Live is South Louisiana so obviously have to consider home owners and flood insurance cost.
Other factors I should consider?
Martial status: single
Children: None
Age: 29
Salary: 65k
Current debt: 0. (Nothing. No student loans, no vehicle, no credit cards carried over every month.)
401k/Roth IRA: 50K
Emergency Fund: 10K
Saving/Other Investments (Mutual Funds, Stocks): 65K
Current rent: 725/month
Don't need a new vehicle now but I will eventually (my car is a 2006 with 130K miles). When needed I'll get something low end like a Civic. Live is South Louisiana so obviously have to consider home owners and flood insurance cost.
Other factors I should consider?
Posted on 1/4/16 at 7:58 pm to danilo
Probably if you can afford another $100/month or so. That car note later could make things tight.
Your main problem is any down payment or closing costs.
My 2br townhouse is $880/month including my homeowners.
Your main problem is any down payment or closing costs.
My 2br townhouse is $880/month including my homeowners.
This post was edited on 1/4/16 at 7:59 pm
Posted on 1/4/16 at 8:11 pm to danilo
quote:
Current debt: 0. (Nothing. No student loans, no vehicle, no credit cards carried over every month.) 401k/Roth IRA: 50K Emergency Fund: 10K
Yeah, guy, you'll be just fine.
Posted on 1/4/16 at 8:24 pm to danilo
If I were in your situation I'd consider looking for a duplex or fourplex. Of course you'd have to be willing to deal with tenants and their issues.
Posted on 1/4/16 at 8:51 pm to danilo
Easily. This is a borderline brag thread because the answer is self evident.
To those saying duplex, let the guy live. Everything in life doesn't have to be an investment.
This board has made me cynical about people advising to pinch pennies every possible way to save a few bucks for people that already save enough.
To those saying duplex, let the guy live. Everything in life doesn't have to be an investment.
![](https://images.tigerdroppings.com/Images/Icons/IconLOL.gif)
This board has made me cynical about people advising to pinch pennies every possible way to save a few bucks for people that already save enough.
Posted on 1/4/16 at 10:04 pm to danilo
I think you are doing great (your subtle brag or not). Keep the price of the new house below $250,000 with 20% down and you will continue to be in great shape. You seem to be able to live below your means. Find a mate with a like mind set and you will continue to be in better and better shape.
Posted on 1/5/16 at 3:01 am to danilo
Assuming you don't make a bonehead purchase, building equity will be better than renting 11 times out of 10. You're stable and have the egg to avoid starting upside down. Do your homework, buy only what you can afford (including anticipated vehicle). If another income isn't near on the horizon, go for it.
Posted on 1/5/16 at 6:44 am to danilo
Talk to a Loan Officer at your preferred lending institution and a mortgage broker. Shop rates like you would houses, cars, etc. my guess is 250k Max. If you have no desire to be landlord, don't be landlord. Use 10k from 401k for house down payment and don't touch cash. Pay your 401k back first.
Good luck!
Good luck!
This post was edited on 1/5/16 at 6:46 am
Posted on 1/5/16 at 7:36 am to danilo
Just curious, what specifics about your current situation makes you think you cannot afford a home?
This is pretty cut and dry.
This is pretty cut and dry.
Posted on 1/5/16 at 8:53 am to danilo
You would probably cut back on that 1500/month you are saving, but if you could find a 200K house, take 40K from that 65K of savings to put down 20 percent, make the seller pay closing costs, and you would have a debt on house of 160K.
My initial PITI when we bought a new house last year, borrowing 170K, is like $1125/month. This was for a 30 year 3.75 percent fixed loan, no mortgage insurance, but paying 400/month for taxes and homeowners insurance.
Not to mention all of the fun costs of homeownership like fixing things. But you have a 10K emergency fund, would still have 25K in savings/other investments, and would still be able to save money.
So then the question is... do you want to do this? 725/month is great for rent and you are saving like crazy. No kids, no spouse, no ties holding you down. If a job offer comes that would make you pick up and move, you could do so easily while renting. Plus if/when you get married and have kids, you will have different ideas about what you want.
Now, you could buy now, and sell later on if the market is great, or turn this house into rental prop. That's not for everyone.
Depending on where you live, I think some areas are becoming overheated and if interest rates tick up some more, values may start to taper off.
My initial PITI when we bought a new house last year, borrowing 170K, is like $1125/month. This was for a 30 year 3.75 percent fixed loan, no mortgage insurance, but paying 400/month for taxes and homeowners insurance.
Not to mention all of the fun costs of homeownership like fixing things. But you have a 10K emergency fund, would still have 25K in savings/other investments, and would still be able to save money.
So then the question is... do you want to do this? 725/month is great for rent and you are saving like crazy. No kids, no spouse, no ties holding you down. If a job offer comes that would make you pick up and move, you could do so easily while renting. Plus if/when you get married and have kids, you will have different ideas about what you want.
Now, you could buy now, and sell later on if the market is great, or turn this house into rental prop. That's not for everyone.
Depending on where you live, I think some areas are becoming overheated and if interest rates tick up some more, values may start to taper off.
Posted on 1/5/16 at 9:05 am to danilo
If you're eventually planning on getting married you might consider buying a nice 1/2 - 2 acre lot in an area where prices are appreciating. That way if you meet the potential Mrs. Danilo you can have that clean slate selected for her to build her dream home and raise little Danilos. At 29 you'd probably be considering that in the next few years if ever.
But in short you can afford a house pretty easily in my opinion. What's the 5 year growth of your income look like?
But in short you can afford a house pretty easily in my opinion. What's the 5 year growth of your income look like?
Posted on 1/5/16 at 9:35 am to danilo
Question, danilo. At what age and salary did you start contributing and investing?
This post was edited on 1/5/16 at 9:36 am
Posted on 1/5/16 at 11:16 am to danilo
quote:
Current rent: 725/month
You can certainly make a house payment around that amount.
Posted on 1/5/16 at 5:57 pm to danilo
You sure this isn't a rhetorical question? You're set baw.
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