Not a bad dilemma

brianwelsch

Well, I'm starting to get tired of living in my 1 bedroom apartment, and want to start putting my money into a house rather than continue to make my landlord wealthy. Smart move chap, you say. And I'd say thankee-sai. I've got about 5K in CC debt, and still owe about 2.5 years on my car. Now, I've been looking around at new and used houses for the past few weeks without a real-estate agent, and haven't had much luck finding houses I'd be happy to own in my current price range. Either the location, neighborhood, or the house does meet my needs wants. So my question is this: Is it worth taking an extra 12-18 mths. to get out of debt and save more downpayment to be able to comfortably afford the house I'd be happier with, or suck it up and get some equity building ASAP in a nice place that isn't quite what I want? BW CP Member Homepages

"And then one day you find ten years have got behind you
No one told you when to run, you missed the starting gun"

Frederick S Jones

I'd put every spare dime toward paying off the debt ASAP, and save more for a bigger down payment toward the house I really wanted (instant equity is always a good thing, I think). But that's just me. It would suck to be stuck with a house you don't really want, or anything else, for that matter. Who's to say you'd even be able to make a profit when the time comes to sell it?
"Get that finger out of your ear! You don't know where that finger's been!"

Jason Henderson

brianwelsch wrote: Is it worth taking an extra 12-18 mths. to get out of debt and save more downpayment to be able to comfortably afford the house I'd be happier with, or suck it up and get some equity building ASAP in a nice place that isn't quite what I want? It's worth it enough just to be out of debt.

"We have done so much in the last 2 years, and it doesn't happen by standing around with your finger in your ear, hoping everyone thinks that that's nice." - Donald Rumsfeld

Jason Henderson
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Lost User

Payoff the credit cards and never, EVER carry a balance again. Credit cards are the scourge of humanity. "Looking at cleavage is like looking at the sun. You don't stare at it. It's too risky. You get a sense of it and then you look away." Jerry Seinfeld

Lost User

Get the place you want unless where you are now really sucks. Also, look in some places you might nor try ordinairily. I found a nice detached bungalow when I was checking out the area around a property I was interested in. It was above my original price range but I managed to get the price down enough. Elaine :rose: The tigress is here :-D

Navin

Since your debt is "bad" debt - credit cards and cars - I say get out of debt as best you can, and then consider a house. When I got my first property, the only debt I had was low-interest student loans. It makes it much easer to get the mortgage in the first place if you have little or no debt. If your debt is too high, you either won't be able to get a mortgage or won't be able to get as much money as you might like/need. The exception might be if you can find something small, or a condo or townhouse, where the total monthly payment (mortage, interest, utilities, taxes) is less than what you're paying in rent. Sometimes I feel like I'm a USB printer in a parallel universe.

Chris Maunder

Do the sums.

How much interest will you pay on your car?
How much rent will you pay over that time?
Will putting a larger downpayment make a mortgage affordable or can you go with a lower downpayment?
Do you need the ultimate house now, or will buying a smaller one, paying off a chunk of the principle, and then moving to a larger one in 2 years make more sense?
Do you expect some capital gains on the house? Will those capital gains over 18 months outweight any interest incurred on a higher mortgage repayment and car loan?
Do you think interest rates will increase? Over 5 years what will give you more equity in a house: higher downpayment, paying rent and a higher mortgage, or getting in now and placing a lower downpayment, no rent and a lower interest rate?

Not all debt is bad. Using the bank's money to increase your net worth is a Good Thing. You can always hand the money back to them and go back to renting if it all goes belly up. Get in the market, but don't try and have something amazing first time. Just make sure you buy a house that's easy to sell. Location, location, location... cheers, Chris Maunder

Gary Wheeler

Mike Mullikin wrote: Credit cards are the scourge of humanity Yes indeed. In my case, a certain scene from The Passion of the Christ comes to mind. :sigh:

Software Zen: delete this;

Terry ONolley

Find a fixer-upper in a neighborhood that is bad now but will become part of a renewal zone. Yes - there are many out there. Just do your research. Buy the house NOW, live in it. Make repairs. get a reappraisal in a year. Get an equity loan to pay off all of your debt. Sell the house in 2 years. Buy the house you really want.

Glano perictu com sahni delorin!