I think it is possible for you to get in a house in about two years if you lay the ground work. The main obstacle is your student loans because of the new rules they have in place about IBR plans. Adding 1% or $1.6K to your DTI will make it hard to afford anything decent. I have $114K in student loans so I feel your pain. I don't have to pay anything on an IBR plan so it's really frustrating. The standard payment on my loans to pay off the loan over 25/30 years is only $563. I'm thinking the standard payment on your loan over 30 years would be quite a bit less than $1.6K. It sounds like you have chosen the payment option to pay it off in 10 years.
You also might want to research lenders who are willing to use the IBR payment instead of the 1% or $1.6K. These lenders are rumored to exist though I personally do not know of any. Also, you never know. Maybe someday the rule will be changed back to the way it was.
The next big expense is the car. I live in the Atlanta metro area as well and communte about 35 miles each way, so I can understand the need for a reliable car. However, it is possible to do that for well under $600 a month and not be driving a hooptie. You will have to be more vigilant about getting it serviced, but that is true with any car. I had a high car payment on a minivan--$640. I traded it in on a used minivan and got that payment cut by over half. Once we get into a house, I will trade it in on a newer vehicle. Temporary pain for permanent gain I say.
It is best if you lower the car payment sooner rather than later so you can save the money, but if you absolutely do not want a used car, then at the very least I think you're going to have to give up the car right before you apply for the mortgage. Your DTI is already going to take a hit with the student loan payment. Even if you didn't have that, the car payment would have eaten up a huge chunk of your buying power. Just not worth it for something that is quickly going to be old anyway. Parking a mercedes in the driveway of a very modest home is not a good look!
Anyway, good luck in your home buying journey.
Thanks for sharing your story about your journey, and Congrats on your closing Reese! I'll admit, It's never easy to hear certain truths, but I didn't come here for fairy tales, just motivation for how to start going in the right direction. I appreciate your encouragement and I will keep plugging along!
Firemediii, my thoughts for refinancing was not to extend the term, but to reduce the interest rate with the same term. Due to a quirk with CapOne and the dealership I went to, I got stuck with a 9% rate. My credit union is flexible will let me match the number of months left on the current loan, it's just at preset, I either won't be approved, or will get a rate similar to where i'm at, which defeats the purpose. As far as making extra payments, It's something i hadn't really thought about, but makes sense. It wouldn't be hard for me to allocate a litte extra in my monthly budget to pay more on it.
Thanks Catinthehat, I really like that Idea! My timeline of 3 years, was based in the fact that I would be out of the seasoning period for a conventional loan, seeing that the FHAs are a bit tricky for my student loan situation, but as I mentioned before, if time can help, i'm in . If I continued to save $300mo, that would still give me 10k to have towards the DP at the end of the 5years, plus the car loan off my DTI.
Thanks Calidreaming. Yes, I'm definitely going to try to research some IBR friendly lenders. I'm sure they're out there, but maybe, just maybe they'll change their requirements in the future. When I saw the rules were changing with the IBR and FHAs, I just smh. Its getting punished for taking advantage of the very thing that's supposed to help you. and yes, the estimated payment of 1,700 was the 10year standard repayment. I never really researched into the other payments since they were always so much higher. Plus, I have a combo of undergrad and grad loans, so it makes the repayment plans work out a bit funny.
For reference amber, I financed a 2014 Kia Rio w/ 36,000 miles for $9000 ( 1000 down ) @ 9% interest with a credit score of 581 ( much lower than yours ) last year.
Have owned 3 kias in the last 15 years, they're very reliable and my cost of ownership for a vehicle over that 15 years has been close to 120$/month. My other 2 cars I bought cash for $4,000-6,000 and those had closer to 50k miles on them but they ran flawlessly for years and I re-sold them without having any major repairs.
Insurance is 90$, full coverage. The lower the replacement value of your vehicle, the cheaper your insurance is going to be.
So yeah, my loan is **bleep**ty, but they're giving away subprime auto loans like candy.
I understand getting rid of the current car scot-free is probably as much an issue as anything else. I don't know if I'll ever buy a new car since they lose so much value so quickly the second you drive them off the lot.
I am also going to say that I disagree with refinancing the car. I have yet to find a situation where it helps me because in exchange for the 50.00 less a month car payment they will tack on at least 12 more months to your loan. So 12 x 550 plus whatever you have left of your loan or save 50 x 36 for instance. Your right that the student loan is just going to have to sit and do its thing but you could throw a extra 50.00 month at this car loan and pay it a few days earlier than scheduled and it will go more toward principal and less toward interest.
It all depends on the person. My wife and I bought a 2008 Civic bacn in 2011. We refnanced it in 2012, didn't extend the term and lowered the payment $100/mo. Then saved and paid it off 2 yrs early.