| Thinking of buying a House |
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arcticathlon
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| Thinking of buying a House |
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My wife and I are thinking about buying a house. We first wanted to pay off all of our student loan debt first, which we have paid down to $25,000 @ 4%interest, but because of the economy are considering the purchase by August 2011. My Salary is ~$80,000 and my wife is at home with our 5 month old daughter. We are looking at houses that cost ~$150k. We have no other loans or forms of debt and are currently renting an apartment ($770/m). I am now considering the purchase because I don’t want the interest rate and the Dollar deflation to end up costing me more down the road when we finally have the debt paid off. With the US just printing money, and not able to pay off even the interest, I think interest rates will increase and the dollar decline.
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Thu Sep 23, 2010 1:08 am |
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coaster
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That seems like a reasonable goal; and your reasoning seems sound. So, go ahead and take the plunge!! If you don't have an emergency fund, it'd be a good idea to fund that first.
~Tim~
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Thu Sep 23, 2010 3:18 am |
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mukeshkkashyap
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you need a some personal finance help
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Thu Sep 23, 2010 6:58 am |
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MrLinan
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| I like the way you think! |
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Taking advantage of today's low rates is definitely the smart thing to do. It appears that you are very budget minded and your goals seem realistic. Make sure you get a good faith estimage going into the transaction so as to fully realize what you are getting into payment wise.
Mack R. Linan
http://www.realestatemack.com
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Thu Sep 23, 2010 3:37 pm |
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calbeach
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this is a good time to buy a house because the fixed rate is so low. you can buy at house now and lock the interest rates on the house as well as student loans.
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Thu Sep 23, 2010 6:20 pm |
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mukeshkkashyap
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Make sure you get a good faith estimate going into the transaction so as to fully realize what you are getting into payment wise.
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Fri Oct 01, 2010 11:49 am |
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rosetaylor01
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Once you have determined you are ready to buy a house, it is important to carefully consider all loan options. You can get a mortgage rate fixed or variable rates. You can choose the interest-only payments or if you prefer, you can find a way around PMI. It is important that you understand these options before deciding which type of loan is best for you.
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Thu Oct 14, 2010 4:52 am |
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moonraker1
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The housing market is still in trouble. If i were you, i would wait a bit longer because you might be able to buy a house 10% less next year than what it is today. Just read the news and u know what i mean.
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Thu Oct 14, 2010 7:58 am |
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littleroc02us
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quote:
Originally posted by rosetaylor01
Once you have determined you are ready to buy a house, it is important to carefully consider all loan options. You can get a mortgage rate fixed or variable rates. You can choose the interest-only payments or if you prefer, you can find a way around PMI. It is important that you understand these options before deciding which type of loan is best for you.
What???? How does it make sense for a guy looking at low interest rates and the low prices of house to take an interest only loan or variable. Doesn't that defeat the purpose of getting a good deal. If one should have to use either idea to finance a house they cannot afford it or are taking on to much risk. A fixed rate on a 15 year mortgage that is no more that 35%of your income is recommended. Interest only loans are for people who are looking for a way to beat the market and when their house becomes valued less then cry about the decison they made.
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Thu Oct 14, 2010 3:57 pm |
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jenniemercado
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also consider the mortgages that you will need to pay 
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Thu Oct 28, 2010 3:03 am |
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sweetums
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So some time has passed and I was just curious what your outcome was - did you buy a dream home?
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Sun Nov 14, 2010 2:14 am |
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oldguy
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quote:
We first wanted to pay off all of our student loan debt first, which we have paid down to $25,000 @ 4%interest
It doesn't make sense to prepay 4% capital and then borrow that same money back at 5% or 6% for a mortgage - why don't you retain the use of that 4% capital for the full term ?
In general, a young family with a long time horizon of wealth building should focus on putting their income stream to the highest and best use - ie, don't use it to retire low cost debt. The $25,000 invested in long term items (eg, in your 401k, your Roth accounts, a brokerage account) will be $572,000 in 30 yrs at 11% - so don't waste it on a SL. When you're young it's hard to think 30 yrs ahead - but you (and your then-30yr,5mon old daughter) will be glad that you did.
IMO you are right to buy a $150k house soon, use only 30 yr fixed rate loans (no ARMs, no balloons, no 15 yr loans, no designer loans). You will probably get a <4.5% loan - and then keep both the 4% SL and the 4.5% loan for their full terms - and focus your income on increasing your net worth.
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Mon Nov 15, 2010 12:05 am |
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oldguy
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quote:
We first wanted to pay off all of our student loan debt first, which we have paid down to $25,000 @ 4%interest
It doesn't make sense to prepay 4% capital and then borrow that same money back at 5% or 6% for a mortgage - why don't you retain the use of that 4% capital for the full term ?
In general, a young family with a long time horizon of wealth building should focus on putting their income stream to the highest and best use - ie, don't use it to retire low cost debt. The $25,000 invested in long term items (eg, in your 401k, your Roth accounts, a brokerage account) will be $572,000 in 30 yrs at 11% - so don't waste it on a SL. When you're young it's hard to think 30 yrs ahead - but you (and your then-30yr,5mon old daughter) will be glad that you did.
IMO you are right to buy a $150k house soon, use only 30 yr fixed rate loans (no ARMs, no balloons, no 15 yr loans, no designer loans). You will probably get a <4.5% loan - and then keep both the 4% SL and the 4.5% loan for their full terms - and focus your income on increasing your net worth.
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Mon Nov 15, 2010 12:06 am |
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