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Who would like to continue living with debt owed? I doubt anyone will agree. When all debts are paid, money is available to devote toward paying down the mortgage, savings, investing, and retirement.
If you would like to buy a house, save at least the 10% down, if not the 20% down. Private mortgage insurance isn't so bad. But you'll then own a good portion of the house going in. If the market slumps, you'll be at least above what you owe. If you do go the route of FHA, plan to buy a house you know you'll be in for at least 20 years.
We bought our house with 10% down and immediately made two mistakes. 1) we started paying as much as we could to the principal, but also updated/upgraded the house on debt. The good thing is we are now owning 53% of the house in two years, and have just 3 years left on the debt. Don't fall into our trap doing too much to quickly. We should have done one or the other. We are now paying for both, but will at the 5 year mark have the house paid for, and the additional house debt paid off all.
Pick a house you can live with as is for at least 10 years, and can pay for on only his income, in case you don't GET another job or that you have kids and decide to be a stay at home mom. You are young it's a possibility.
And if you have the 10% for down payment, can pay it on his salary and still pay your debt and save, then go for a house! Why not?
Do keep your mortgsge payment aroundc20% of take home also. Our finance company made sure of that for us. And go for a 30 yr mortgage, you can ALWAYS pay off early like we are.
Also, if you do go back to work ( and ivsee no reason not to) you can then save all your income totally if his will cover the mortgage, the debt, living expenses, then you'll do fine with saving 100% of your income for the possibility of kids and/or for full retirement.
Good luck with your decision, and goid luck finding a house you can live with!
I say go for it, unless you plan to move for your job.
I won't agree with paying off debt asap. It depends on what they are. If it's consumer debt, sure. If it's student loans, there's no rush to get rid of it asap (though you wouldn't want to drag it out for the entire term). But above all else, you'd rather save for retirement first to take advantage of the company match, then work on consumer debt, then on student loans.
I also don't agree with getting a 15 year mortgage. While the idea of paying off the mortgage will seem appealing, getting a 15 year mortgage is a terrible idea for cashflow in case something pops up and in 15 years, you will be guaranteed something will happen that will require money to solve. If anything, get a 30 year, and apply extra payments to the principal as desired. There's less risk involved in getting a 30 year vs. 15 simply because of the cash flow.
One thing no one has mentioned, is that if you can swing it, there's nothing wrong with getting a mortgage based on your husband's salary alone. Maxing out what a lender will give you isn't often the best financial way to go. Sounds like your dad knows that in spades! So at least you have a great role model financially.
My husband and I moved to a new city 5 years ago. He transferred, I had to look for a job. We got a mortgage based on his income, and so when I began working it was like gravy. We're debt free other than the mortgage, and have zero worries about being house poor.
Once you get a job, I say go for it, & continue to put your pay into savings. I think it is Ok, that part of your husbands wages is OT, because they will be looking at his W2 & tax return, more than pay stubs.
If you have debt, I would pay it off as soon as possible. You should not be burdened with debts and a mortgage concurrently.
If you do get a mortgage, consider a 15-year (or less) fixed-rate mortgage. Your initial down payment on a mortgage should be at least ten percent of that. Monthly payments should be twenty-five percent or less of your monthly take-home pay.
While I don't disagree that less is sometimes more, these are very conservative parameters and will not be workable for many people.
One thing no one has mentioned, is that if you can swing it, there's nothing wrong with getting a mortgage based on your husband's salary alone. Maxing out what a lender will give you isn't often the best financial way to go. Sounds like your dad knows that in spades! So at least you have a great role model financially.
My husband and I moved to a new city 5 years ago. He transferred, I had to look for a job. We got a mortgage based on his income, and so when I began working it was like gravy. We're debt free other than the mortgage, and have zero worries about being house poor.
We can definitely swing it on his salary. His base pay is around 3800 a month, but closer to 7k a month with all of his overtime!!! We plan on paying off the rest of our debt before applying for a mortgage
1. Wait until you have enough to avoid FHA
2. Don’t buy anything over $100,000
.
what about USDA??? We have friends who have gone with USDA and have been very pleased with it. And yes we plan on moving to an area that actually would qualify for it
If you would like to buy a house, save at least the 10% down, if not the 20% down. Private mortgage insurance isn't so bad. But you'll then own a good portion of the house going in. If the market slumps, you'll be at least above what you owe. If you do go the route of FHA, plan to buy a house you know you'll be in for at least 20 years.
We bought our house with 10% down and immediately made two mistakes. 1) we started paying as much as we could to the principal, but also updated/upgraded the house on debt. The good thing is we are now owning 53% of the house in two years, and have just 3 years left on the debt. Don't fall into our trap doing too much to quickly. We should have done one or the other. We are now paying for both, but will at the 5 year mark have the house paid for, and the additional house debt paid off all.
Pick a house you can live with as is for at least 10 years, and can pay for on only his income, in case you don't GET another job or that you have kids and decide to be a stay at home mom. You are young it's a possibility.
And if you have the 10% for down payment, can pay it on his salary and still pay your debt and save, then go for a house! Why not?
Do keep your mortgsge payment aroundc20% of take home also. Our finance company made sure of that for us. And go for a 30 yr mortgage, you can ALWAYS pay off early like we are.
Also, if you do go back to work ( and ivsee no reason not to) you can then save all your income totally if his will cover the mortgage, the debt, living expenses, then you'll do fine with saving 100% of your income for the possibility of kids and/or for full retirement.
Good luck with your decision, and goid luck finding a house you can live with!
I say go for it, unless you plan to move for your job.
Thank you so much for all of your advice!!! I really appreciate it.
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