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Hi guys, I am thinking of buying a home in the next 1-2 years and am looking for advice on what you think I can realistically afford.
A little about me:
24 years old
$60K income (Financial Analyst) - First job out of college
Car payment $425 with 24 months remaining
Student loan payment $440 on standard 10 year repayment plan ($38K total)
Fico scores were between 750-770 last time I checked back in November across all three boards
House savings - $15K
I am currently paying about $1k in rent and still am able to put away about $800 each month after all expenses (groceries, insurance, gas, etc). I am really tired of paying rent every month and it pains me to think I could have a mortgage for roughly the same amount.
Realistically, if I continue to save for another year I could have around $25K in savings for the house. Given my circumstances, what would be a reasonable house price to go for? In my area, $200K would get you a pretty average 2-3 bedroom in okay neighborhoods.
In all honesty, I would love to buy a house now but I know I can't afford it yet and need to continue to save.
Thanks, that's helpful!
Just make sure it's a house you really like, and you're not getting one so you stop paying rent. Renting has lots of advantages (instant landlord maintenance, flexibiility, etc.).
Fire has great advice - really think about what else you would like - dont get so wrapped up in owning a home that you let other things you want/enjoy get lost in the shuffle. Dont over extend yourself.
@Anonymous wrote:Fire has great advice - really think about what else you would like - dont get so wrapped up in owning a home that you let other things you want/enjoy get lost in the shuffle. Dont over extend yourself.
Agreed! I can 'afford' a home up to 600k, but I know my life and my own personal number is half of that. Do your budget for monthly spending and bills and figure out where you'd like your payment to be to maintain that. That'll give you the right answer.
All, thank you for the replies. At this point, I think I need to continue to rent until I have a bigger savings and some more debt paid off. Realistically, I'd like to have my car paid off and I think I should be able to get that paid off this year. That will eliminate one big monthly bill that I can allocate towards a house.
Thanks again!
@CleanCredit wrote:All, thank you for the replies. At this point, I think I need to continue to rent until I have a bigger savings and some more debt paid off. Realistically, I'd like to have my car paid off and I think I should be able to get that paid off this year. That will eliminate one big monthly bill that I can allocate towards a house.
Thanks again!
Be aware that when you pay off your auto loan, you will get a significant score drop if it is the only open installment loan you have when you apply.
I mention that because I lost a huge number of points (32 on one CRB, 17 on another and 7 on the 3rd). That can make a difference in your qualifications. I would concentrate on paying down revolving debt to get it to your optimum level and apply before you pay off your auto loan. JMO based on my personal experience (and others on this board).