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Replies (6)
- Jay McGovern, "jaymcgovern"
- Contributions:90
You are not going to be able to take out a mortgage loan to buy a house or condo and roll your student tution into it.
- Robert Benham, "FHA down to 620 OK!"
- Contributions:776
Your colleague is a funny guy and obviously a Renter....lol. You can't get cash back to pay off bills my friend.
If you are a home owners already,...you can refinance to pay down bills.
But if you can qualify and the mortgage payment does not strap you,..it may be a great time to buy. Low rates and good prices.
Then again living at home with Mom for $200 is pretty sweeet too!
If you are a home owners already,...you can refinance to pay down bills.
But if you can qualify and the mortgage payment does not strap you,..it may be a great time to buy. Low rates and good prices.
Then again living at home with Mom for $200 is pretty sweeet too!
- sunnyview
- Contributions:25127
I think that you have a good plan started. Living at home has it's drawbacks and benefits, but the biggest benefit is being able to pay down your debt before you buy. You can run a calculator to see how much you might qualify for here, but only you can really know how much would be comfortable for you to pay every month.
You also need to take time to work on your credit and get it as good as possible. Pay down balances, raise your credit limits so your % of used credit is less and pull a copy of your credit report to correct any errors and clean up any mistakes on their part.
Take the step of starting to save for a down payment. For FHA you will need 3.5% down, so on a 130K condo you will need about $4500 saved up. It would be great to pay off your student loan, but it may be more important to save for a down first since your loan balance is relatively small and your payments should be fairly low.
As far as the roommate thing, they can help you pay your mortgage, but you need to be able to afford the place on your own just in case the roommate moves out or has a meltdown or fails to pay. The house you buy need to be comfortable financially so that things will only get more stable for you over time. You may be able to get an equity line for your student loan, but if you get something you can afford, you can use part of the roommates rent to pay off your loan faster too.
You sounds like you have give things a lot of thought so that's great. If you make your plan, you'll be able to buy whenever you want.
You also need to take time to work on your credit and get it as good as possible. Pay down balances, raise your credit limits so your % of used credit is less and pull a copy of your credit report to correct any errors and clean up any mistakes on their part.
Take the step of starting to save for a down payment. For FHA you will need 3.5% down, so on a 130K condo you will need about $4500 saved up. It would be great to pay off your student loan, but it may be more important to save for a down first since your loan balance is relatively small and your payments should be fairly low.
As far as the roommate thing, they can help you pay your mortgage, but you need to be able to afford the place on your own just in case the roommate moves out or has a meltdown or fails to pay. The house you buy need to be comfortable financially so that things will only get more stable for you over time. You may be able to get an equity line for your student loan, but if you get something you can afford, you can use part of the roommates rent to pay off your loan faster too.
You sounds like you have give things a lot of thought so that's great. If you make your plan, you'll be able to buy whenever you want.
- Dale Doughty, "ddoughty1"
- Contributions:11
FHA will only allow you to finance 96.5% of the purchase price. There are no longer purchas e programs available that allow you to consolidate other debt. In these situations I usually review a clients debts and compare it to their income to determine a comfortable amount of money that you can afford to spend on a new home. Then you will have some idea what to look for.
There are other programs available also that may allow you to finance the full purchase price but these programs are only available in certain neighborhoods.
Now is an excellent time to buy and you have a real opportunity to buy real estate at the bottom of a correction, using very inexpensive money and putting yourself in an excellent financial position in the future.
Let me know if I can help. Good Luck!
There are other programs available also that may allow you to finance the full purchase price but these programs are only available in certain neighborhoods.
Now is an excellent time to buy and you have a real opportunity to buy real estate at the bottom of a correction, using very inexpensive money and putting yourself in an excellent financial position in the future.
Let me know if I can help. Good Luck!
- Debra (Debbie) Rose, "Livingston NJ"
- Contributions:2729
Enjoyed reading your question and the information you shared. At 26, I say hurray and kudos to you for even trying to come up with a plan! I like your analytical approach!
That being said, and to try to be short and to the point - I suggest you stay where you are for now!
Forget the idea of rolling your student loan into a mortage (no way) - and hoping to find a paying roommate to lower your costs (what if you can't find a paying rommate?).
You said you are making $40,000 a year and paying (only) $200 as rent to your parents.
So - with minimal expenses - What do you have in savings??????
You should have something in the bank, and if you don't, then that should be your priority. Pay off those loans and start saving!
Now, if you want independence from living under your parent's roof, and I understand that, then............. come up with a budget which includes getting rid of debt and putting money aside for savings, and see what you have left to put towards rent - find a roommate to share a rental with for now, if that is feasible based on your "budget". Maybe find 2 rommates to cut costs down, but....for now....you're not ready to take on the added debt of home owenrship (in my opinion).
You're young - plan ahead, and then you can make it happen.
Best wishes!!
That being said, and to try to be short and to the point - I suggest you stay where you are for now!
Forget the idea of rolling your student loan into a mortage (no way) - and hoping to find a paying roommate to lower your costs (what if you can't find a paying rommate?).
You said you are making $40,000 a year and paying (only) $200 as rent to your parents.
So - with minimal expenses - What do you have in savings??????
You should have something in the bank, and if you don't, then that should be your priority. Pay off those loans and start saving!
Now, if you want independence from living under your parent's roof, and I understand that, then............. come up with a budget which includes getting rid of debt and putting money aside for savings, and see what you have left to put towards rent - find a roommate to share a rental with for now, if that is feasible based on your "budget". Maybe find 2 rommates to cut costs down, but....for now....you're not ready to take on the added debt of home owenrship (in my opinion).
You're young - plan ahead, and then you can make it happen.
Best wishes!!
- Dan, "the_country_hick"
- Contributions:4694
Normally I would point you to these blogs
"Does it make more sense to buy, or to rent? Here is the way to find out for sure."
"Why rent if you could buy for less money? Valid reasons inside."
However, I think what you are really looking to find out is if buying now makes sense for you. Do you think you might move within 7 years for a new job elsewhere? Buying now could make that not happen.
Also, expect lower prices to be here for awhile. There is no great hurry to buy to lock in low prices. In fact prices are more likely to fall even further. When interest rates increase from 5% to 7% buying power will drop by 23.7%. We all know that interest rates must rise in the next few years. If incomes do not go up much and inflation does house prices will drop a lot.
Peter Schiff: Here's Why Home Prices Have To Decline At Least 20% And Probably More
"Does it make more sense to buy, or to rent? Here is the way to find out for sure."
"Why rent if you could buy for less money? Valid reasons inside."
However, I think what you are really looking to find out is if buying now makes sense for you. Do you think you might move within 7 years for a new job elsewhere? Buying now could make that not happen.
Also, expect lower prices to be here for awhile. There is no great hurry to buy to lock in low prices. In fact prices are more likely to fall even further. When interest rates increase from 5% to 7% buying power will drop by 23.7%. We all know that interest rates must rise in the next few years. If incomes do not go up much and inflation does house prices will drop a lot.
Peter Schiff: Here's Why Home Prices Have To Decline At Least 20% And Probably More
First time home buyer, would like some thoughts on my current situation
A colleague of mine suggested getting into my first home with a low interest rate and taking out enough to cover the remaining tuition I owe which is about $11,000 does anyone have any thoughts about this?
I made a more detailed post on the home buyer forum on about.com that can be seen here if you want more details-
http://forums.about.com/n/pfx/forum.aspx?tsn=1&nav=messages&webtag=ab-homebuying&tid=3761
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