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Need Help With Making a Decision


sabwafare2001
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The last post in this topic was posted 5584 days ago. 

 

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I make about 5K/mon. and looking (hoping) to purchase a house summer 2007 or sooner. I work as an Electrical Engineer in AZ for less than a year(10mon.) and married with no kids at this time (maybe in 1 or 2 years) and 23yrs old. Wife doesn’t work and didn’t come with any debt. Currently I live in an apartment paying $810 for 7 months now. Right now I am very hesitate to buy a house because of how high of a payment a house can be. Also, I think one of my savings accounts may have to go away or be depleted after buying a house. My credit score now is 737 and should rise as my balances decrease. The house I’m looking to buy is 220K which is perfect for the size for us and one that we can stay in until we leave AZ. The monthly payment I received for this price for different types of loans ranges from $1200 to $1600 with average property taxes and insurance included. I was told that I quality for more than this amount because of my credit score. After buying a house I only would have to buy about two bedrooms of furniture, so it’s really not much. I also get raises from 4% to 10% each year regularly not including promotions. As far as my history goes, I have paid off a car and a few credit cards over the last 5 years. Also, I have a few credit cards open with no charges or balances. The questions are as follows:

 

1.For income tax time, should I use the money to help decrease my monthly payment on my car or should I use it to put towards paying points off of the interest rate?

 

2.In a normal situation, will I have enough money left over to live comfortably? Well, would you feel comfortable?

 

3.Should I concentrate on buying off my debt instead?

 

4.Should I wait longer until buying?

 

5.What other advice do you have?

 

Monthly Debt:

Chase CC - $26(8.9% rate starts May 07) - $1200 balance – 10K limit

Car - $540($270 biweekly) – 32K@7% 6 years left

Student Loans - $75(will rise to $147 in 2yrs.) – 16K

 

Monthly Savings:

HSBC Direct: $150(biweekly) – 8K(5.05%)

401k: $94(biweekly) – 3800

CU: $100(biweekly) - $300

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I make about 5K/mon. and looking (hoping) to purchase a house summer 2007 or sooner. I work as an Electrical Engineer in AZ for less than a year(10mon.) and married with no kids at this time (maybe in 1 or 2 years) and 23yrs old. Wife doesn’t work and didn’t come with any debt. Currently I live in an apartment paying $810 for 7 months now. Right now I am very hesitate to buy a house because of how high of a payment a house can be. Also, I think one of my savings accounts may have to go away or be depleted after buying a house. My credit score now is 737 and should rise as my balances decrease. The house I’m looking to buy is 220K which is perfect for the size for us and one that we can stay in until we leave AZ. The monthly payment I received for this price for different types of loans ranges from $1200 to $1600 with average property taxes and insurance included. This is highly unrealistic for that loan amount. A normal principle interest payment on 220k at 5% is $1181 alone. I would question the terms as they may be suggesting a high risk option arm. I was told that I quality for more than this amount because of my credit score. After buying a house I only would have to buy about two bedrooms of furniture, so it’s really not much. I also get raises from 4% to 10% each year regularly not including promotions. As far as my history goes, I have paid off a car and a few credit cards over the last 5 years. Also, I have a few credit cards open with no charges or balances. The questions are as follows:

 

1.For income tax time, should I use the money to help decrease my monthly payment on my car or should I use it to put towards paying points off of the interest rate? You'd have to do the math here. How much would you cut your car payment vs how much you would cut your mortgage payment. When paying points, you have to have an idea of how long you will be in the home. For instance if you pay $2000 extra and save $30 per month, it would take 66 months to break even. If you aren't going to live there or think you will refinance within that 66 months, it's not a good idea to pay the points.

 

2.In a normal situation, will I have enough money left over to live comfortably? Well, would you feel comfortable? Only you can answer this. A budget is the best way to go. You may want to consider finding out how much you can afford monthly and base the loan amount off of that.

 

3.Should I concentrate on buying off my debt instead?

 

4.Should I wait longer until buying?

 

5.What other advice do you have?

 

Monthly Debt:

Chase CC - $26(8.9% rate starts May 07) - $1200 balance – 10K limit

Car - $540($270 biweekly) – 32K@7% 6 years left

Student Loans - $75(will rise to $147 in 2yrs.) – 16K

 

Monthly Savings:

HSBC Direct: $150(biweekly) – 8K(5.05%)

401k: $94(biweekly) – 3800

CU: $100(biweekly) - $300

 

Your other questions are too general to answer. Only you can figure out those answers.

 

I would suggest speaking with a broker and going over your goals. Once you are presented with all your options, then you would be much better prepared to make a decision.

 

BTW, I wish I would've bought a home at your age. One of my few regrets.

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