Debating when to buy a house

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DreamyCy

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Nov 13, 2013
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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.
 
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SCNCY

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Sep 11, 2009
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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.
 

cydline2cydline

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Sep 17, 2011
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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:
 

Angie

Tugboats and arson.
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Mar 27, 2006
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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.
 

chadm

Giving it a go
Apr 11, 2006
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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.
 

Trice

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Apr 1, 2010
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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.
 

cycloneworld

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Personally, I'd wait until the student loans are paid off. If you are paying $4k per month...it 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.
 

Gossamer

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Apr 10, 2014
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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. I'd buy a house...build some equity and stop paying 100% interest by renting.

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. You're clearly financially intelligent so I have no concerns about you making terrible decisions with your money.

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.You don't need more than 5% into a conventional conforming mortgage transaction. You can split your loans into two...and 80% 1st and a 15% 2nd. This avoids PMI and gives you the flexibility to pay off the second at your convenience. Keep cash rather than put money down if you can...you can always use your cash to pay it off it you want but you can't always get cash back. Buying a home will mean you'll get the additional tax deduction for the extra interest you'll be paying.

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.

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.