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Here is the deal...my mortgage including taxes and insurance would be 2,600.
take home salary for me : 4500/month
take home salary for wife : 2300
= 6,800 combined take home
-HOA dues 46
-Electricity 200
-water&garbage 70
-car payments 900
- cable 85
- cell phones 150
- car insurance 200
- life insurance 60
- groceries 400
- internet 65
- credit card debt 300
- gas 400
We are left over with about 1424 a month. Would you buy a home that left you with 1,424 a month when all is said and done. And yes, I have a pension system so I am contributing to my retirement...it is automatically taken from my paycheck. What do you think ? I say yes..lets go for it...she says no.
NO... First pay of your car! $ 900.- would make me sick to pay for a car that is worth less every day! Pay of that credit card debt!
What if the roof starts to leak or something else get's broken...., pay of your debt and start saving a little bit more....and than pay at least 20% down, if you can't you shouldn't buy the house....but this is just my opinion...so I agree with your wife!
If the bank says you can afford it go for it. They will look at your total debt/gross income ratio, and if you have excellent credit, above 700 you might be able to stretch that ratio up 45%. Due to the mortgage meltdowns banks are more stringent. I would also calculate how much in federal taxes/state taxes (not sure if your state has state taxes) you will save by itemizing, that could certainly help in additional monthly revenue. I would use last years tax return and estimate how much your total mortgage interest, RE taxes etc would be. In addtion I would rough it the first couple of years and build some nice reserves (12x1400 = 16,800 year one, 33,600 year two) Good luck.
Well, isn't the whole finacial housing mess, partly because the banks said that people could afford it...you know what they want their commission and don't care after the loan is signed...they get their commission and go do their thing....they are forgotten about you when the ink is dry!
You are the one who has to know what you can afford...IMO, when a bank is agreeing to a loan for $ 250 K...I wouldn't go higher than $ 200 K....so you have something to breath!
I would never pay off a car first.
Cars are a simple interest loans where you will pay the full finance charge whether you pay it upfront or throughout the loan term. You will pay the same either way.
I would start with the revolving accounts that have high interest.
These debts will grow if you dont make more than the minimum payment.
Car loans are fixed, and will not grow like a credit card.
When I paid off my last car early I was given a payoff value that was less than the car price + full interest. I may be misunderstanding, but why would you pay the full finance price if the car were paid off first? I would think whatever has the highest rate should go first.
I've always paid off cars early, gotten a reduced or early pay-off adjustment. Just call the loan company and ask them what the payoff value would be for 30 days and you'll see that it is considerably less than continuing the payments over the next 36/48 or how many months of "coupons" you have left.
Are you comfortable only saving $1000/month in an ideal month? Don't you ever want to go on vacation? Buy a new tv or computer? Not going to happen with this house. $2600/month is way too much based on your income.
I've always paid off cars early, gotten a reduced or early pay-off adjustment. Just call the loan company and ask them what the payoff value would be for 30 days and you'll see that it is considerably less than continuing the payments over the next 36/48 or how many months of "coupons" you have left.
When you payoff early, the interest amount is recalculated for the reduced term of the loan (e.g. 3 yrs instead of 5 yrs), so the total amount will be less, that is how the loan interest is calculated. They are not giving you anything, you are just avoiding the interest over time.
no i would take a mortgage out on the remainder.
you could take out a mortgage but you must remember rates can increase!!!
you need to leave yourself a margin of at least 1%.
my advice would be to see a mortgage broker who would do a budget plan for you which would show what you could borrow and not leave yourself at risk.
you do not want to put yourself to the wire. always make sure you have money left over!!!
1400 leftover will be one big house with alot of empty rooms. A house should never consume more then 30% of your income PERIOD. If it does you will be slave to it.
I notice you've got nothing for savings or retirement which should be happening before you calculate your $1400 leftover. If you can't pay yourself you shouldn't be buying a house.
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