Good or bad idea to buy a home? (loan, credit, financial)
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My sister has been persuading me to get a home since she thinks that I'm paying too much for rent with my girlfriend ($1200/month for 2b2b) and houses in state where I live is relatively cheap (AZ) and for tax deduction purpose. Problem is I have tremendous amount of student loan (health care field) so I'm debating hard whether I should get a house now or not. Any advise/opinion welcome. Following is my situation:
Personal Details
Single, but will be married soon this year
Good Credit: 790-800
Doctoral Degree
33 years old
Financials
Income: Worked as independent contractor/self employed last year. The gross income on my 1099 is $170k
Cash/Liquid Investments: 60k
No other equity...
Debts
Student Loans: $2000/month [~$270k outstanding]; Just recently refi it; It was 4k/month with 7+% fixed interest
The house pricing range I'm looking at is between $300k - 350k. I was thinking to continue live like a student and knock down my student loan first but that would like me at least another 5 years... Any input appreciated
You are generating enough income, that you really need a good financial planner, CFP, and/or CPA or tax attorney to advise you.
Seriously. You are on a path to very very good wealth accumulation, and a home purchase is a small matter in the greater scheme of things.
It may be quite reasonable to buy a house. Your sister may be right, but there is a LOT more to consider besides cash flow and tax advantages.
My sister has been persuading me to get a home since she thinks that I'm paying too much for rent with my girlfriend ($1200/month for 2b2b) and houses in state where I live is relatively cheap (AZ) and for tax deduction purpose. Problem is I have tremendous amount of student loan (health care field) so I'm debating hard whether I should get a house now or not. Any advise/opinion welcome. Following is my situation:
Personal Details
Single, but will be married soon this year
Good Credit: 790-800
Doctoral Degree
33 years old
Financials
Income: Worked as independent contractor/self employed last year. The gross income on my 1099 is $170k
Cash/Liquid Investments: 60k
No other equity...
Debts
Student Loans: $2000/month [~$270k outstanding]; Just recently refi it; It was 4k/month with 7+% fixed interest
The house pricing range I'm looking at is between $300k - 350k. I was thinking to continue live like a student and knock down my student loan first but that would like me at least another 5 years... Any input appreciated
Only 1 year S/E = must go Freddie Mac but also must use NET business income, either as seen on Line 31 of your Schedule C (with possible enhancements), or via examination of Business Returns if you filed those.
Bottom line: Nobody claims zero expenses, and the $170k number is not your actual income as calculated for mortgage qualification.
My sister has been persuading me to get a home since she thinks that I'm paying too much for rent with my girlfriend ($1200/month for 2b2b) and houses in state where I live is relatively cheap (AZ) and for tax deduction purpose. Problem is I have tremendous amount of student loan (health care field) so I'm debating hard whether I should get a house now or not. Any advise/opinion welcome. Following is my situation:
Personal Details
Single, but will be married soon this year
Good Credit: 790-800
Doctoral Degree
33 years old
Financials
Income: Worked as independent contractor/self employed last year. The gross income on my 1099 is $170k
Cash/Liquid Investments: 60k
No other equity...
Debts
Student Loans: $2000/month [~$270k outstanding]; Just recently refi it; It was 4k/month with 7+% fixed interest
The house pricing range I'm looking at is between $300k - 350k. I was thinking to continue live like a student and knock down my student loan first but that would like me at least another 5 years... Any input appreciated
You should buy a starter home for less money. If homes are cheap where you are $300K is a very nice home. You should find a home that gets your mortgage to be about the same as you are paying for rent.
Since you are planning on getting married soon I would include the GF on the decision.
I also agree that you should buy a home. You need the tax write off! You can get a really nice home for $350k in AZ. I would go even lower at no more than $300K. don't over extend yourself. You can definitely afford it! Might as well start to build some equity and get into a home before rates go up! Home ownership is a good financial decision IMO!
Since you are planning on getting married soon I would include the GF on the decision.
I also agree that you should buy a home. You need the tax write off! You can get a really nice home for $350k in AZ. I would go even lower at no more than $300K. don't over extend yourself. You can definitely afford it! Might as well start to build some equity and get into a home before rates go up! Home ownership is a good financial decision IMO!
No guarantee that this tax write off will continue to exist -- nor will the student loan write off exist as a guaranteed deduction.
All of that said - in your field and income range, get a CPA or Financial Planner who has your *fiduciary interest* (these exact words should be on any contracts you sign) in mind. They'll give MUCH better options than we can without knowing specifics.
CGab is correct - def include the GF! I also agree, a home is probably a good choice. Do a 15 year mortgage if you can afford it - then in your 40s you can save tons of cash for retirement and college for kids.
No guarantee that this tax write off will continue to exist -- nor will the student loan write off exist as a guaranteed deduction.
All of that said - in your field and income range, get a CPA or Financial Planner who has your *fiduciary interest* (these exact words should be on any contracts you sign) in mind. They'll give MUCH better options than we can without knowing specifics.
CGab is correct - def include the GF! I also agree, a home is probably a good choice. Do a 15 year mortgage if you can afford it - then in your 40s you can save tons of cash for retirement and college for kids.
YUP!
Ignore all other advice in the thread, until you have done this.
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