Quote:
Originally Posted by brightyellowhaha
Hi Everyone,
I am having an internal conflict and would like some words of wisdom. I would like to buy a home for myself and my kids spring/summer 2012. After cashing in some company stock, receiving my annual bonus and saving I should have around $15k for downpayment and closing costs (I'm actually hoping I can get the seller to pay for the closing costs so it could be $15k for downpayment). However I am carrying some debt:
$1600 Amex (will be paid off by the end of the year)
$12,700 car loan @ 8.5%
$10,915 student loans @ 2.65%
Part of me would like to use the $15k to pay off my car and pay down some of my student loans however I would like to also make a good decision long-term for my family. Currently I rent a single family home in a fantastic town, with fantastic schools, activities ect. When I will be buying a home I will be buying here. However, my landlord is considering putting this home on the market next year and if sold I would of course have to move. Unfortunately the town I live in offers very few rentals and since it's a desirable place to live finding an open one is almost impossible. I was very lucky to get my current rental. So if this house was to sell I would have to move to a neighboring town with more rentals but also poorer schools. My son has autism so I really need a good, supportive school system.
So what would you do if you were in my situation? I want to do what is best for my family long-term.
Thanks!
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Last time I bought a house, the mortgage lender said that they don't take into account any debt that will be paid off in the next year so I wouldn't worry about your AMEX bill.
I personally would continue to save till you have your 20% DP. Don't rush into a home purchase. I don't believe home prices will recover for at least a few more years, so no pressure to rush and buy "at the bottom". Pay off your debt as fast as you can starting with the car loan since it has the higher interest rate. Once that is paid off, then funnel the money you were paying on the car towards the school loans to pay that one off quicker.
If you're fine living in your current rental, ask your LL to see if you can sign a 1yr lease. This will lock him/you into a contract to rent until you're ready to buy. Even if he sells the house, the new owner will have to honor the lease.