Hi All,
I would like some opinions on a situation I am finding myself in. I really want to buy a house here in FL. But I became self employed in January 2013 and it is looking like I will have to wait until 2015 to get a mortgage. 
I think I will be in a position to buy a starter house here in FL cash (arnd $75K) in September/October of this year. I live at home right now so am able to save all my money, and I am working a lot!
Would this be a good idea? I would make sure I would still have about $10,000 in an emergency account but would basically use the rest of my money to buy my own house outright. Is this a good idea or a bad idea?
I have no credit card debt, no auto loans but I do have sizeable student loans, think 6 figures.
Are there other things I should be thinking about if I decide to pay cash?
Thanks!
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A lot of people will argue that they can make a bigger return on that money through investments.
But I think you really have to decide for yourself is a $75,000 starter home where you would like to live. Is the home located in a good area? Keep in mind that even if it is now if it is a fairly new house, that over time, home owners may move out and the house will rent for dirt cheap, which may bring obnoxious folks into the neighborhood. That happened to my Dad and the increased crime and minimal upkeep of the neighborhood forced my Dad to move out after being there for almost 20 years. He had the home built from the ground up for $127K. It was a cheap, quaint little starter home but as the homes aged and lost value, homeowners moved out and brought riff raff renters into the neighborhood further pushing the value down. Just something to think about. Honestly, it is a decision that you will ultimately have to make. If you were to get a mortgage loan, how much home would you consider purchasing?
But I think you really have to decide for yourself is a $75,000 starter home where you would like to live. Is the home located in a good area? Keep in mind that even if it is now if it is a fairly new house, that over time, home owners may move out and the house will rent for dirt cheap, which may bring obnoxious folks into the neighborhood. That happened to my Dad and the increased crime and minimal upkeep of the neighborhood forced my Dad to move out after being there for almost 20 years. He had the home built from the ground up for $127K. It was a cheap, quaint little starter home but as the homes aged and lost value, homeowners moved out and brought riff raff renters into the neighborhood further pushing the value down. Just something to think about. Honestly, it is a decision that you will ultimately have to make. If you were to get a mortgage loan, how much home would you consider purchasing?
Well, I can't get a mortgage until I have 2 years worth of tax forms as being just self-employed.
I have been working and freelancing on the side for the last 4 years but the mortgage brokers want to see tax returns as just self-employed.
In 2 years I will qualify for a mortgage of about $450,000 based on my monthly student loan payments. Meaning I would qualify for about $500,000 but after I deduct the monthly payments that is what it says I will get based on my income.
I would buy a house that costs around $150,000 and put about $100,000 down.
But that means I am stuck living at home for 2 years or spending $1500 a month on rent.
Or I can buy a house, possibly up to $100,000 in September/October. It would be in a niceish area, mainly senior citizens. I'm not worried about building up my nest egg again. I make a good monthly income with student loans being my only real bill asides from a cell phone.
I don't trust the stock market, I am pretty risk averse. I have people who have lost everything due to stocks.
I guess I'm just not sure what the right move would be to make at this point.
Based on that new info, does anything change?
Also, one of the reasons I want to pay cash for a house is because I am self employed. I don't know what's going to happen in a few years. I would rather have a house that is paid off so if my income dries up considerably, I'm not scared of losing it!
I may have missed it but how much do you owe in student loans?
Average Total Monthly Income is $14,500 (Before 40% taxes that I have to pay being self-employed)
Student Loan payments per month is $1500.
Total student loans is $200,000. This is from college and grad school programs and licenses.
This is just my opinion... but student loans can not be discharged in BK, if anything ever happens to you and you had to file for BK, you are still stuck with those loans which are A LOT, I would put the money towards the loans, live at home and pay off the rest, then buy the house I want. If you are young, and you make this kind of money, whats a few years at home?
Good point cclee.
If I could afford to pay cash for a house, I would. (I try to do the next best thing and pay it off as quickly as possible!)
There's something really nice about not having a mortgage and having the house paid for.
As for student loans, if you feel you can afford to have a house, have a maintenance fund for the house, and still pay your loans, go for it. 
If you would rather stay at home and pay off your student loans faster, go for it.
Both situations are a win-win.