Debating when to buy a house

Discussion in 'Real Estate' started by DreamyCy, Feb 15, 2016.

  1. DreamyCy

    DreamyCy Member

    Nov 13, 2013
    +100 / 24 / -0
    #1 DreamyCy, Feb 15, 2016
    Last edited: Feb 15, 2016
    I'm getting married in 3 months and I'm undecided whether we should buy a house this year or wait because of my future wife's student loans. I personally think we should wait but I'm curious what others think.

    A little background information. Between the two of us we make $135k. Her college debt right now is at 120k with 7% interest. We are paying 4K/month (1,300 is the minimum) and having been doing so for the last 7 months. Neither of us have credit card debt and we both own our cars. We currently have around 30k between savings and checking in the bank.

    I would like to put around 70% to 80% of that 30k into her loans and and try to get them refinanced after we get married. Then continue paying the 4K/month through the end of 2016 and then save up for a down payment on a house in the spring/winter of 2017.

    I know it's a good time to buy real estate so would it be a mistake not trying to get a house in 2016? She lives in a spacious 2 bedroom apartment which we would have no troubles living in and pays $740 a month for rent.
  2. Cyclonepride

    Cyclonepride Thought Police
    Staff Member

    Apr 11, 2006
    Sales and marketing
    A pineapple under the sea
    +20,917 / 909 / -0
    Since the Fed is floating the idea of negative interest rates, I don't see the rates going up significantly any time soon. I also don't think that the housing market will move significantly either.
  3. SCNCY

    SCNCY Well-Known Member

    Sep 11, 2009
    La Fox, IL
    +676 / 33 / -0
    I actually just verbally agreed to buy a house today.

    For your situation, I would ask your self this. 1) what are you comfortable with when paying a monthly mortgage. I am not sure what you are paying in rent, but I would assume that probably around that would be good. 2) what is your credit rating. If the loans are preventing you from getting the rates/mortgage you need, then you should probably wait.
  4. cydline2cydline

    cydline2cydline Active Member

    Sep 17, 2011
    +312 / 6 / -0
    If you don't think you will stay in the home for more than 3-5 years, don't do it (just pay down those loans instead).

    How long do you foresee yourself being in the home, both from a location perspective (if you would want to move) and details (size, quality, plus future expansion like kids). When you sell your home you are probably looking at ~7% going to a realtor (or 21k on a 300k house).

    As usual, don't take advice from CF... :eek:
  5. Angie

    Angie Tugboats and arson.
    Staff Member

    Mar 27, 2006
    +4,466 / 72 / -0
    If you don't have a significant down payment, you will quite possibly end up with PMI, which is a pain in the butt, expensive, and takes a while to make it go away. I'd personally wait until you have a decent down payment before looking to buy.
  6. chadm

    chadm Giving it a go

    Apr 11, 2006
    +1,208 / 97 / -0
    IMO, pay off the loan with the higher interest rate. The college loans are at 7% and a mortgage will be around 3-4%.
    If you are not planning on getting a mansion the first go around, then maybe the mortgage payments would be close enough to rent to look at.
  7. Trice

    Trice Well-Known Member

    Apr 1, 2010
    Ankeny, Iowa
    +195 / 10 / -0
    My only advice is, buy your second home first. In other words, if you think you just want a "starter home" and will likely upgrade in 3-5 years, just wait, say, 2 years and buy that upgraded home then. You'll have that much more time to save up, attack your other debt, etc. And you'll save a small fortune on transaction costs from not having to sell a home and move into a new one.

    Of course, living the apartment life for longer than you'd planned may suck. But 10-years-from-now-you will be very thankful.
  8. cycloneworld

    cycloneworld Facebook Knows All

    Mar 20, 2006
    Civil Engineer
    Urbandale, IA
    +1,532 / 38 / -0
    Personally, I'd wait until the student loans are paid off. If you are paying $4k per won't be long. Then you can roll a portion of that $4k into a mortgage payment and STILL save money.

    I certainly wouldn't want to have a $1,300 student loan payment AND a mortgage. But that's just me.
  9. Gossamer

    Gossamer Well-Known Member

    Apr 10, 2014
    +641 / 31 / -0
    again...$740 a month that you might as well flush.

    PM me if you have specific questions. I'd be happy to help point you in the right direction or simply answer questions.

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