A Wedding, a wife, a house oh my!!!

[skinsguy]

Originally Posted by firstdown

Well paying of dept is fine but if its not out of line it should not hurt you too much. You cannot buy a home without a down payment so I would think saving for the down payment is also an issue. You may want to rent for the first year or so your married and get all your financies in line then think about buying a home. With that said I would also keep an eye on the market and if you see home values going back up buy before they go up too much.

Another good idea is to go to your banker and have them pull your credit and qualify you fo a loan. They then can make recommendations to help you when your ready to buy.

Not really true...you can buy a home without a down payment, albeit maybe not a $300,000 home, but it's possible as long as you're willing to pay PMI.

[mredskins]

If you have no debit and or never paid down any debit that is going to hurt you as well in getting a mortgage. You need to build a credit history.

[firstdown]

Mredskins thinking is totally different then mine. With all the people loosing homes and loosing jobs the demand for rentals is way up and also increasing the cost to rent. Housing prices are at a low and will probably not dip much if any lower so buying now is a great time. I wish I was not getting ready to build or I would go out and buy several homes as investments.

[mredskins]

Originally Posted by firstdown

Mredskins thinking is totally different then mine. With all the people loosing homes and loosing jobs the demand for rentals is way up and also increasing the cost to rent. Housing prices are at a low and will probably not dip much if any lower so buying now is a great time. I wish I was not getting ready to build or I would go out and buy several homes as investments.

But you are assuming that the housing market will ever get back to what it used to be. Very few homes are appreciating these days. If you are buying the homes as rental income, yes that makes sense but it sounds like this guy is looking for a place to live and most likely be looking at a starter home. He may find several years down the road when he may need a bigger home that house maybe very well be worth less then he paid for it.

Buying homes today is almost like buying a car, it is no longer a investment.

[WaldSkins]

Originally Posted by mredskins

But you are assuming that the housing market will ever get back to what it used to be. Very few homes are appreciating these days. If you are buying the homes as rental income, yes that makes sense but it sounds like this guy is looking for a place to live and most likely be looking at a starter home. He may find several years down the road when he may need a bigger home that house maybe very well be worth less then he paid for it.

Buying homes today is almost like buying a car, it is no longer a investment.

We both have seperate apartments that cost over $2000 combined. I have been renting for about 6 years and see no point to renting anymore. At this point I have excellent credit as does she so that wouldnt be an issue.

I know that the housing market is not the greatest right now but i figure if im gonna put 2000 towards housing fee's i'd like to see something for my money

[mredskins]

Originally Posted by WaldSkins

We both have seperate apartments that cost over $2000 combined. I have been renting for about 6 years and see no point to renting anymore. At this point I have excellent credit as does she so that wouldnt be an issue.

I know that the housing market is not the greatest right now but i figure if im gonna put 2000 towards housing fee's i'd like to see something for my money

That is the point; you won't see anything. Unless you are think of staying in that house for 30 years it will not appreciate fast enough to be worth your wild if you just stay say five years in it.

[firstdown]

Originally Posted by mredskins

That is the point; you won't see anything. Unless you are think of staying in that house for 30 years it will not appreciate fast enough to be worth your wild if you just stay say five years in it.

I purchased a home in the peak of the market in 2006 and we will still make money on our home. Buying now in a down market is the best time to buy because thing can only go up.

[mredskins]

Originally Posted by firstdown

I purchased a home in the peak of the market in 2006 and we will still make money on our home. Buying now in a down market is the best time to buy because thing can only go up.

You hope but nothing in the last 5 years has made me to believe that.

[firstdown]

Originally Posted by mredskins

You hope but nothing in the last 5 years has made me to believe that.

Even if they stayed level for 5 years your better off buying.

[skinsguy]

Originally Posted by WaldSkins

So im quickly approaching my wedding date in May and have been looking into buying a house. With the amount of money that we have been putting into the wedding it has pretty much drained most of our savings accounts. I was just wondering if it was better to pay off my fiancees debt or save the money for the house. What looks better to a bank/lender, having no debt or having no savings?

WaldSkins: Let me address your original question first with some sound advice:

1. PAY OFF THE DEBT FIRST! No questions asked. PAY THE DEBT OFF FIRST! As attractive as it might sound to fall into a no down payment situation with a house, and again, I'm in the same boat as you, don't put buying a home in front of paying off the debt.

2. Before you even think of saving for the house, you need to SAVE UP AN EMERGENCY FUND FIRST! Your goal on that is at least 3 to 6 months worth of living expenses. What if you buy a house and both of you lose your jobs? You gotta have an emergency fund. DON'T RELY ON CREDIT CARDS AS AN EMERGENCY FUND!

3. Once #1 and #2 have been satisfied, decide what your intentions are on a house purchase. Do you plan to live there for at least 10 to 15 years? You need to know this before you buy a house. Whatever the answer is, you definitely want to be saving back money to either purchase the house straight out (yes I know that's probably not realistic for most people) or for a down payment NO LOWER THAN 20%. Don't go into a house purchase without knowing what is you're wanting to do or what it is you're actually purchasing.

4. Once you have found the house you want to purchase, it doesn't matter if it's a starter home or if it's one you plan on being in for the rest of your life, you need to budget out your mortgage payments for a 15 YEAR LOAN! Trust me, you'll be paying nearly double for that house if you get sucked up into a 30 year loan. And also, don't budget it on both salaries, budget it for one salary. Most people go out and grab the 30 year loan thinking they can always double up on the payments, but almost nobody ever pays double on their mortgage.

Now, don't listen to people who say investing in real estate is not worth it. It IS worth it, but you HAVE to be smart about it. You can't go in over your head on a purchase. And for the love of everything that is burgundy and gold, don't purchase property in hopes of turning it into rental property UNLESS IT'S PAID IN FULL! That's a bad, bad move that can seriously get you into a bad financial situation.

Now, are there any decent apartments in a decent area to rent that are cheaper than $1000 a month? If so, move there! Even if the apartments are smaller, maybe not as nice, this is just a way for you to free up some money to get you started. If not, then one or both of ya'll might need to think about a second job - at least until the debt has been satisfied. There's nothing wrong in both contributing to the savings for a house, but like I said earlier, the payment for the house should be based on one salary.

[mredskins]

Originally Posted by skinsguy

WaldSkins: Let me address your original question first with some sound advice:

1. PAY OFF THE DEBT FIRST! No questions asked. PAY THE DEBT OFF FIRST! As attractive as it might sound to fall into a no down payment situation with a house, and again, I'm in the same boat as you, don't put buying a home in front of paying off the debt.

2. Before you even think of saving for the house, you need to SAVE UP AN EMERGENCY FUND FIRST! Your goal on that is at least 3 to 6 months worth of living expenses. What if you buy a house and both of you lose your jobs? You gotta have an emergency fund. DON'T RELY ON CREDIT CARDS AS AN EMERGENCY FUND!

3. Once #1 and #2 have been satisfied, decide what your intentions are on a house purchase. Do you plan to live there for at least 10 to 15 years? You need to know this before you buy a house. Whatever the answer is, you definitely want to be saving back money to either purchase the house straight out (yes I know that's probably not realistic for most people) or for a down payment NO LOWER THAN 20%. Don't go into a house purchase without knowing what is you're wanting to do or what it is you're actually purchasing.

4. Once you have found the house you want to purchase, it doesn't matter if it's a starter home or if it's one you plan on being in for the rest of your life, you need to budget out your mortgage payments for a 15 YEAR LOAN! Trust me, you'll be paying nearly double for that house if you get sucked up into a 30 year loan. And also, don't budget it on both salaries, budget it for one salary. Most people go out and grab the 30 year loan thinking they can always double up on the payments, but almost nobody ever pays double on their mortgage.

Now, don't listen to people who say investing in real estate is not worth it. It IS worth it, but you HAVE to be smart about it. You can't go in over your head on a purchase. And for the love of everything that is burgundy and gold, don't purchase property in hopes of turning it into rental property UNLESS IT'S PAID IN FULL! That's a bad, bad move that can seriously get you into a bad financial situation.

Now, are there any decent apartments in a decent area to rent that are cheaper than $1000 a month? If so, move there! Even if the apartments are smaller, maybe not as nice, this is just a way for you to free up some money to get you started. If not, then one or both of ya'll might need to think about a second job - at least until the debt has been satisfied. There's nothing wrong in both contributing to the savings for a house, but like I said earlier, the payment for the house should be based on one salary.

Not necessarily true all depends on your cash flow. As long as you can float the mortgage when no one is there you can pull it off.

[skinsguy]

Originally Posted by mredskins

Not necessarily true all depends on your cash flow. As long as you can float the mortgage when no one is there you can pull it off.

Repeat, it is a BAD, BAD move.

[mredskins]

Originally Posted by skinsguy

Repeat, it is a BAD, BAD move.

In your mind I have done it now counting the condo I bought in college for over 15 years, made great money on that place, over the entire time. I have two other small investment like that. I have had years where I have lost some money on them due to repairs or low occupancy but in the whole scope of the investment I have made positive dollars.

It is just a risk you personally are not willing to take that doesn't make it a bad idea or bad investment. There are many variables that come into play.

I much rather have those dollars wrapped in them then the current stock market.

I would not recommend it to everyone but I have the cash flow right now to make it a low risk investment.

[firstdown]

Originally Posted by mredskins

In your mind I have done it now counting the condo I bought in college for over 15 years, made great money on that place, over the entire time. I have two other small investment like that. I have had years where I have lost some money on them due to repairs or low occupancy but in the whole scope of the investment I have made positive dollars.

It is just a risk you personally are not willing to take that doesn't make it a bad idea or bad investment. There are many variables that come into play.

I much rather have those dollars wrapped in them then the current stock market.

I would not recommend it to everyone but I have the cash flow right now to make it a low risk investment.

So now its a good idea?LOL

[skinsguy]

Originally Posted by mredskins

In your mind I have done it now counting the condo I bought in college for over 15 years, made great money on that place, over the entire time. I have two other small investment like that. I have had years where I have lost some money on them due to repairs or low occupancy but in the whole scope of the investment I have made positive dollars.

It is just a risk you personally are not willing to take that doesn't make it a bad idea or bad investment. There are many variables that come into play.

I much rather have those dollars wrapped in them then the current stock market.

I would not recommend it to everyone but I have the cash flow right now to make it a low risk investment.

It just happens to work out because you have been LUCKY so far. And you have still lost money on this venture, and could still lose money. Have you ever thought about what would happen if you got sick or injured and couldn't work? Or if you just flat out lost your job? How would you be able to maintain two rental properties and the current place you live in? I bet you're paying on all of that property, aren't you? Like I said before, it's different if the property is bought and paid for, but if it's not, you're taking a very insane chance at losing your butt.

I'm giving WaldSkins the best advice that he needs to hear. Schneed10 has pretty much echoed what I posted earlier. There is absolutely no risk in WaldSkins buying a home if he follows what I've said.