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Old 04-03-2009, 04:22 PM
 
Location: Southwest Nebraska
1,297 posts, read 2,490,240 times
Reputation: 843
Default Good idea or not?

I am getting about 50,000.00 back pay for disability plus 1400/mo income and wife makes 1000/mo. We have no bills, no kids, and don't care for fancy lifestyle.

We were thinking of buying and paying cash for a piece of land with singlewide older, but livable, trailer for 10,000.00. We have found one already. We need to get 2 reliable cars and put about 5 to 7,000 down on each and finance remaining 15,000.00 between two to get credit going in positive direction. Payment would be about 500/mo for 36 mo.

Then put remaining 20,000.00 +/- in a cd and leave it. This way we can live pretty much worry free and travel a couple times a year and our only expenses would be car pmts, ins., utilities for about 1000.00/mo until cars pd off.

Does this seem to make sense or am I not facing reality and missing something?

Thanks.
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Old 04-03-2009, 04:30 PM
 
1,010 posts, read 2,586,820 times
Reputation: 525
Sounds like a plan, but your statement "get credit going in a positive direction" tells me you've got some problems in that area. Here's some advice...

Don't do a conventional car loan if you're credit score is low and you have a CD on deposit at a bank or credit union. Instead, borrow using the CD as collateral for the loan and pay cash for the cars. You may can get a better deal on the cars by paying cash instead of financing - and the rate you'll get on a CD secured loan will almost certainly be lower than what you'll get on a car loan. On a CD secured loan, you'll pay a slightly higher rate than what your CD is earning...and it's reported to the credit bureaus just like any other loan - so it'll help your credit.
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Old 04-03-2009, 04:43 PM
 
Location: Sacramento
2,395 posts, read 3,988,996 times
Reputation: 1660
Quote:
Originally Posted by Bigg Mann View Post
I am getting about 50,000.00 back pay for disability plus 1400/mo income and wife makes 1000/mo. We have no bills, no kids, and don't care for fancy lifestyle.

We were thinking of buying and paying cash for a piece of land with singlewide older, but livable, trailer for 10,000.00. We have found one already. We need to get 2 reliable cars and put about 5 to 7,000 down on each and finance remaining 15,000.00 between two to get credit going in positive direction. Payment would be about 500/mo for 36 mo.

Then put remaining 20,000.00 +/- in a cd and leave it. This way we can live pretty much worry free and travel a couple times a year and our only expenses would be car pmts, ins., utilities for about 1000.00/mo until cars pd off.

Does this seem to make sense or am I not facing reality and missing something?

Thanks.

Do the numbers. What are your expenses? Add them all up. Do you have enough in you emergency fund to cover those expenses for 8-12 months?
Also do you have money saved up for retirement? If you do then you can spend money. If you don't then don't.
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Old 04-03-2009, 06:32 PM
 
Location: Southwest Nebraska
1,297 posts, read 2,490,240 times
Reputation: 843
Quote:
Originally Posted by suzie02 View Post
Do the numbers. What are your expenses? Add them all up. Do you have enough in you emergency fund to cover those expenses for 8-12 months?
Also do you have money saved up for retirement? If you do then you can spend money. If you don't then don't.
Total expenses now and would be about same if we do this is 800/mo including food, ins.,utilities, etc. This is not counting car pmts. We would consider this income to not stop as it will be ongoing. If wife loses her job we can still survive off my 1400/mo.

Saving for retirement, whats that! I have been disabled for 2 yrs with no extra income surviving off of 1000/mo wife income and food stamps and doing without everything else. Lost everything in bankruptcy when business we had shut down because of large company leased to closed.

This is our retirement income and will at least have a paid for roof over our heads with low taxes and basic living exp. Also probably will only live 20 more yrs so don't have a lot of time left for saving.

My mother and stepdad worked their butts off saving for retirement and then retired and my mother who never drank or smoked and exercised daily was blessed with terminal cancer and died 2 wks later. Did not get to enjoy much of her retirement savings but sure did have it. Now stepdad has alzshemers (sp) and his greedy daughters have himdeclared incompetant and are getting their "retirement savings" that was so needed. Would have been better to enjoy their living yrs more and not worry about when the end is around the corner.
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Old 04-03-2009, 11:40 PM
 
388 posts, read 1,011,524 times
Reputation: 259
Why not buy 1 or 2-year old used cars instead and save the money? 29k plus interest is a lot of money for two cars. Your credit won't be moving in a better direction if you have debt. And do you have to have two cars? Having just one will reduce insurance, gas, etc.

If you don't have an emergency fund, I would not put your money in a CD because there are usually fines if you want to take it out: I would put it in a savings account like ING DIRECT and open a second savings account for planned expenses, such as vacation, etc.

And mobile homes deteriorate with time, so I'm not sure it would last the amount of years you wish to stay in, but it's not impossible either.
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Old 04-04-2009, 03:35 AM
 
Location: Southwest Nebraska
1,297 posts, read 2,490,240 times
Reputation: 843
Quote:
Originally Posted by NYSinger View Post
Why not buy 1 or 2-year old used cars instead and save the money? 29k plus interest is a lot of money for two cars. Your credit won't be moving in a better direction if you have debt. And do you have to have two cars? Having just one will reduce insurance, gas, etc.

If you don't have an emergency fund, I would not put your money in a CD because there are usually fines if you want to take it out: I would put it in a savings account like ING DIRECT and open a second savings account for planned expenses, such as vacation, etc.

And mobile homes deteriorate with time, so I'm not sure it would last the amount of years you wish to stay in, but it's not impossible either.
I must not be explaining very well. We will be getting a couple of cars that are 3 to 5 yrs old and finance maybe up to 15,000.00 total between 2 cars. We have a 15 yr old 3rd owner car now we bought for 2500.00 and can't go out of town, (funerals, etc) without renting a large vehicle, very expensive, because of my disability I can't fit in normal car. WE have spent 1500.00 this last 12 months on rentals plus another 1500.00 in repairs so that is 5500.00 in 12 months. That is hard to do on 1000.00/mo income.

So we intend on buying newer, low mileage, dependable cars that we can keep for 5 plus years. We need to get a full size passenger van so I can fit in and haul flea market stuff in and wife will get small fuel efficient work car, which I won't be able to fit in.

I know mobile homes aren't the best way to go but I don't have unlimited funds and don't want payments. I rent a 15 yr old trailer now and it is fine and still worth 10,000.00 and neighbor lives in a 1972 model and is just fine also. I don't care what people say about what we live in.

We will put money in CD's and also some for access. Remember we have an income of 2500/mo net and only 800/mo going out. I think we might be able to save at least 1000.00/mo and still make car pmts. totaling 500.00 between 2 for 36 months and pay off early if we want.

Thanks for reply.
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Old 04-04-2009, 03:47 AM
 
957 posts, read 246,504 times
Reputation: 195
I wouldn't spend more than $7K total for a reliable car these days. People are offloading their possessions for deep discounts nowadays. My car is 8 years old with 140K miles and reliable, KOW. Just buy Toyota (best) or Honda or Nissan. You say you want a full-size van, but I know of no model that is reliable. In that case I'd get a high-mileage Dodge Ram van or something like that, and pay no more than $4K because it'll need major repairs. A friend of mine bought one for $3K and did a 30K-mile US tour with it, needing one major repair (like $1K). He sold it for $2K.

Before buying a mobile home, consider that a guy in South Carolina recently bought a house on 25 acres for $20K, just half an hour from Columbia, a major city. (A house in the news lately because there was the decomposing former owner in it. The house was sold on the courthouse steps because the taxes were delinquent.) If you're not interested in a fancy lifestyle, you can buy a real house.

Last edited by Heiwos; 04-04-2009 at 04:05 AM..
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Old 04-04-2009, 05:10 AM
 
596 posts, read 1,701,225 times
Reputation: 181
Quote:
Originally Posted by Bigg Mann View Post
I am getting about 50,000.00 back pay for disability plus 1400/mo income and wife makes 1000/mo. We have no bills, no kids, and don't care for fancy lifestyle.

We were thinking of buying and paying cash for a piece of land with singlewide older, but livable, trailer for 10,000.00. We have found one already. We need to get 2 reliable cars and put about 5 to 7,000 down on each and finance remaining 15,000.00 between two to get credit going in positive direction. Payment would be about 500/mo for 36 mo.

Then put remaining 20,000.00 +/- in a cd and leave it. This way we can live pretty much worry free and travel a couple times a year and our only expenses would be car pmts, ins., utilities for about 1000.00/mo until cars pd off.

Does this seem to make sense or am I not facing reality and missing something?

Thanks.
My initial reaction is that you can get a reliable car without paying 500/month or paying 5-7,000 down on each of the cars. Then, I thought that getting your credit rating "going in a positive direction" would not require the financing of the remaining 15,000. In my opinion, if you got a secured credit card or a low credit card of some sort, and bought a candy bar on it each month and paid it off you'd do fine. You can still establish positive credit with less money - you may not meet any 'breadth requirements' as far as having variety in credit obligations though (ie credit cards, mortgage, vehicle loans, small bank loans, etc).

I liked your land/trailer idea though. It would be great to own your own land and home. Reliable cars are great, dont get me wrong, but why not buy outright at 7,000 or so, like a newer used car?

The Plymouth Voyagers are great, long-lasting minivans with low maintenance. Just my opinion though. Also, be very realistic on your monthly expenses. Are you accounting for the gas you'll be consuming (once you get out to the land you're considering purchasing) to get to the grocery store or work, etc each day? Add a realistic miscellaneous section to your monthly expenses. Do you drink? Smoke? Go to movies? Buy birthday or anniversary gifts for others?

Overall, your plan sounds good.

Last edited by jctx; 04-04-2009 at 05:43 AM..
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Old 04-04-2009, 03:31 PM
 
Location: Southwest Nebraska
1,297 posts, read 2,490,240 times
Reputation: 843
Quote:
Originally Posted by jctx View Post
My initial reaction is that you can get a reliable car without paying 500/month or paying 5-7,000 down on each of the cars. Then, I thought that getting your credit rating "going in a positive direction" would not require the financing of the remaining 15,000. In my opinion, if you got a secured credit card or a low credit card of some sort, and bought a candy bar on it each month and paid it off you'd do fine. You can still establish positive credit with less money - you may not meet any 'breadth requirements' as far as having variety in credit obligations though (ie credit cards, mortgage, vehicle loans, small bank loans, etc).

I liked your land/trailer idea though. It would be great to own your own land and home. Reliable cars are great, dont get me wrong, but why not buy outright at 7,000 or so, like a newer used car?

The Plymouth Voyagers are great, long-lasting minivans with low maintenance. Just my opinion though. Also, be very realistic on your monthly expenses. Are you accounting for the gas you'll be consuming (once you get out to the land you're considering purchasing) to get to the grocery store or work, etc each day? Add a realistic miscellaneous section to your monthly expenses. Do you drink? Smoke? Go to movies? Buy birthday or anniversary gifts for others?

Overall, your plan sounds good.
Yes we are considering getting a 6 to 8,000.00 car and paying it in full after reading these replys most are leaning that way. I have always had new the last 15 yrs and my 15 yr old car now is killing us on our limited budget so might be thinking alittle out of our budget. Still nice to dream about.

Also we did consider gas and misc. items and this trailer is located in town in Nebraska where I grew up. I don't smoke, wife better quit now after taxes went up and we don't drink, rent movies, or go out. Our food allowance includes for eating out once a month. We buy x-mas gifts for little ones and something small for us but have always paid cash. We don't have credit cards anymore since we were not good with them before and now have not had for 3 yrs. but have thought about getting secured one to start credit. Fico score is 600 so not real bad but would be better if higher for later on if needed loan.

This disability money will not be coming to me for another 3 to 6 mo.

Thanks again for ideas everyone.
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Old 04-04-2009, 06:15 PM
 
41,648 posts, read 44,893,785 times
Reputation: 12798
I would save as much of that disabilty payment as possible because you never know what is going to happen;especailly if you are not saving anyhting npow. Work it out so you are saving money is my advice.If you don't have good credit pay cash for the cars and then start paying into a savings account that $500.00 a month ;but make sure you do every money just like a car payment.Once you have a good buffer tehn satr saving and tranferring for a CD.
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