Jump to content

Please consider disabling your adblocker for CreditBoards if you have not already done so.  This site depends on advertising revenue to stay online.


Sign in to follow this  

How to allocate 25k

The last post in this topic was posted 1384 days ago. 

 

We strongly encourage you to start a new post instead of replying to this one.

Recommended Posts

About 8 months ago I was pre-approved for a $100,000 mortgage ($105,000 sale price with $5,000 down). I didn't intend on purchasing at the time, I just did it because I wanted to see what would "come out of the woodwork" as far as collections go. Luckily nothing came out and my reports are squeaky clean, FINALLY!

 

Here is what my income and debts looked like when I was approved for $100,000:

 

$49,000 annual salary

$28,000 student loan debt

$12,000 auto loan

$5,000 available for down payment

 

Currently I am at:

 

$55,000 annual salary

$25,000 student loan debt

$10,000 auto loan

$25,000 available for down payment

 

The homes in my area that I like are around $150,000 - $165,000.

 

What would maximize my chances of purchasing a home in the 150k - 165k range?

 

1) Use the entire 25k as a down payment

2) Use 5k as a down payment and 20k to reduce other debts

3) Divide the 25k up differently between the down payment and debts

 

If option 3, what would be the best way to divide it?

 

I've never bought a house before and don't know if there is some sort of theory that less debt is better than a large down payment, or a large down payment is better than less debt, so I figured I'd ask here and hope someone knows :)

Share this post


Link to post
Share on other sites

Are you on a fixed or IBR on the student loans, and what is the payment?

 

What is the car loan payment?

 

Are you saving money for closing costs and an emergency fund as well?

Share this post


Link to post
Share on other sites

Are you on a fixed or IBR on the student loans, and what is the payment?

 

What is the car loan payment?

 

Are you saving money for closing costs and an emergency fund as well?

 

My students loans are fixed.

 

Here's the breakdown:

 

Loan 1 - $1,750 remaining: $40/month

Loan 2 - $2,150 remaining: $50/month

Loan 3 - $4,600 remaining: $45/month

Loan 4 - $5,000 remaining: $145/month

Loan 5 - $11,350 remaining: $115/month

 

Auto Loan - $10,000 remaining: $250/month

 

Closing costs would have to come out of the 25k, but I would still have about 3 months worth of "Emergency Funds" in savings.

Share this post


Link to post
Share on other sites

So here is the math 55k = $4583 a month

45% of that is 2062 - this is the amount all bills including Mortgage should be below that amount

Currently you have 395 in student loan payments and 250 so $645 total

that leaves you with approximately $1400 a month towards a mortgage

That is easily enough for a loan in the range you are looking (150-165k)

Which means you have options - You do not have to eliminate debt - you can but you dont have to

You can put more than the minimum down - but again you dont have to

 

If it were me I would pay the closing costs and down payment then keep the rest in savings -

Paying down the mortgage more wont save you much monthly and that money would be better as an emergency savings

Share this post


Link to post
Share on other sites

So here is the math 55k = $4583 a month

45% of that is 2062 - this is the amount all bills including Mortgage should be below that amount

Currently you have 395 in student loan payments and 250 so $645 total

that leaves you with approximately $1400 a month towards a mortgage

That is easily enough for a loan in the range you are looking (150-165k)

Which means you have options - You do not have to eliminate debt - you can but you dont have to

You can put more than the minimum down - but again you dont have to

 

If it were me I would pay the closing costs and down payment then keep the rest in savings -

Paying down the mortgage more wont save you much monthly and that money would be better as an emergency savings

Thanks for the insight. This is valuable information that I can and will use going forward!

 

Thanks again!

Share this post


Link to post
Share on other sites

The last post in this topic was posted 1384 days ago. 

 

We strongly encourage you to start a new post instead of replying to this one.

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Sign in to follow this  




  • Member Statistics

    • Total Members
      179,434
    • Most Online
      2,046

    Newest Member
    Zakiyyah
    Joined

About Us

Since 2003, creditboards.com has helped thousands of people repair their credit, force abusive collection agents to follow the law, ensure proper reporting by credit reporting agencies, and provided financial education to help avoid the pitfalls that can lead to negative tradelines.
×
×
  • Create New...

Important Information

Guidelines