Author Topic: When is the right time to buy our first home?  (Read 1964 times)

allspiritseve

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When is the right time to buy our first home?
« on: July 31, 2013, 06:26:13 PM »
My wife and I are starting to think about whether we should buy a house. We had our local bank check out our financials just to see if it was even possible to buy now, and they said we were in really good shape (we both have good credit scores). However, I'm worried about getting a mortgage with no down payment. We could wait and save up, but I hate the idea of that money just sitting there when we could be paying down debt. However, with that mindset we couldn't even think about buying a home until after we have paid off the loans, which is a bit depressing.

Some numbers:

Our rent is $1,150/month. Might go up 3% next year, according to our landlord.
We have $100K in student loans. Highest interest rate 7.9%, average about 6%.
We have $12K on a credit card at 0% until February, then 11.24%.
$1K emergency fund
Combined salary of around $90K (variable, I'm a self employed web developer).

Two questions:

1. What should we be focusing on putting our money towards now?
2. At what point should we be seriously considering buying a home?

Another Reader

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Re: When is the right time to buy our first home?
« Reply #1 on: July 31, 2013, 06:48:41 PM »
In your shoes, I would pay off those high interest rate loans before I bought a house.  What would you do if you bought a house and then one of you lost your income?  I would throw everything at that credit card and those alligator student loans.  Once those are paid off or at least to the point you could support a house payment and the loan payments on a much reduced income, then I would go house shopping.  Student loan debt and credit card debt and then buying a house with no down?  That's just plain foolish.

ToeInTheWater

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Re: When is the right time to buy our first home?
« Reply #2 on: July 31, 2013, 06:52:24 PM »
i was going to say exactly the same thing as Another Reader did

b

savingtofreedom

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Re: When is the right time to buy our first home?
« Reply #3 on: July 31, 2013, 09:54:44 PM »
Agreed - especially if your income is variable.  I would hate the added stress of a mortgage hanging over you especially if for some reason your income went down for some time frame.

Not sure what your rental market is like but is it feasible to look for a cheaper rental in the future so you can pump more money into your existing debt?  Can you work overtime?

Good luck.   Don't feel like you need to rush into purchasing a house.