terrapen wrote:

- quote -

Chris, explore an FHA loan with your lender.

Rick Wheat
www.LoanSpread.com

Terrapen,

I agree generally with what the others have posted, except that you may
want to hold off on paying off the student debt. If it's truly a "very
low interest" loan, then you ought to save your cash toward a down
payment on a home or perhaps some retirement savings in a Roth IRA.

In my experience lenders don't weigh too heavily student debt in
qualifying you for a loan. That's not to say, of course, that you
yourself shouldn't take it into account when figuring out how large of
mortgage you can afford.

good luck,

Tom B.

I don't necessarily agree with all the advice given. I think you need
to consider your position carefully. As a practical matter, IF your
credit score is good (650s and more), you can get a zero down loan,
WITHOUT PMI, with a loan value depending on your debt/income
ratio. This used to be fairly straight-forward but don't know if it'll
still hold in the rising interest rate climate. Very generally, I do
advocate this over saving for a downpayment (but it is also a function
of the housing market you're in, and the points below).

You need to figure out how much disposable income you need and live
happily. Be generous and budget for treats for yourself. Likewise,
save for retirement if you need to. What is left is what you can
afford on a house payment (including taxes and insurance).

Then think about whether you'd really want a house and the
responsibilities that come with it. This should be your primary
reason for buying a house.

What I am getting at is that if you've enough disposable income, and
if you're saving adequately for retirement, then I think using all the
rest of the money for debt payment is okay, provided the debts are
paid towards secured assets like a house (hopefully in an appreciating
market).

--Ram

terrapen <terrapen[at]gmail.com> wrote:

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- quote -


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======================================= MODERATOR'S COMMENT:
Please trim the post to which you are responding. "Trim" means that except for a few lines to add context, the previous post is deleted.

terrapen wrote:
- quote -

Not necessarily true. When you buy a home, you become the new
landlord. We're getting ready to possibly (unless I can fix it)
replace our water softener and it will run $400 - $500. We are
prepared to absorb the expense with cash. If you buy with considerable
debt, are you prepared to handle the homeowner issues that come up with
cash?

I agree completely with previous advice. Pay off the debt, save up a
big downpayment to avoid PMI, and have a rainy day fund in place for
new water softeners, a furnace, etc., etc.

In article <1111906710.449129.271460[at]l41g2000cwc.googlegroups.com> ,
"terrapen" <terrapen[at]gmail.com> wrote:

- quote -

How do you know that? Have you done an analysis of the cost
of renting versus the cost of buying? In many cases, renting
is a better deal. That goes double right now when most houses
are priced far over their real value. This might very well be
a good time to rent, and wait for the coming real estate crash
to cut house prices down to size for you.

-john-

--
================================================== ====================
John A. Weeks III 952-432-2708 john[at]johnweeks.com
Newave Communications http://www.johnweeks.com
================================================== ====================

"Sandra Loosemore" <sandra[at]frogsonice.com> wrote
snip
- quote -

Particularly given that the original poster's debt likely will result in an
adverse credit score, meaning the original poster will pay a higher
mortgage interest rate.

- quote -

"Sandra Loosemore" <sandra[at]frogsonice.com> wrote in message
news:m3y8c9dtkr.fsf[at]dartfrog.localdomain...

- quote -

Very good. I might add that it is unlikely you will qualify for any loan
when you owe money to the IRS. Paying off that debt should be your priority.
In order to do that as quickly as possible, you'll have to reduce your
spending.

Elizabeth Richardson

If you have no money saved, you're going to find it very hard to buy a
house. Besides needing money for the down payment, there are closing
costs, you'll almost certainly want to have some cash to spend on
furnishings and random things you need for a house that you didn't for
an apartment, and you'll also want an emergency fund to cover
unexpected repairs.

My suggestion is to (1) reduce your spending; (2) pay off your debts;
(3) start saving money for a house. In that order.

-Sandra the cynic

Hi,

I'm a 30 year old guy who is trying to figure out his next financial
move and I need some sound advice. I've been in a full-time job for
the last 10 years and even though I've made over $750,000 in this
period, I have NEXT TO NOTHING to show for it. (Ain't that scary!)

There is a small bright spot: I have very little debt, outside of
student loans. Here is a summary of my debt:

-------------------------------------- A Lowe's no-interest-until-2006 credit card that is almost paid off
($750 remaining; I usually pay $250/mo on this)

$3000 remaining debt to the IRS with $200 monthly payments (I severely
misjudged my withholdings for my last year of gangbuster income, 2001),
5% interest

A $750 very-low-interest student loan with $50 monthly payments

A $20,800 very-low-interest student loan with $200 monthly payments

TOTAL DEBT: $25,300 more or less
--------------------------------------

As for income, I've left the big bucks corporate world and I now make
about $40,000/yr. My take-home is roughly $2600/month.

Here's my dilemma: I'm currently living in a $900/mo 2br apartment. I
know damned well that I am throwing money down the toilet by living
here. On top of that, I'm absolutely fed up with the "apartment
lifestyle". I want to buy a house when my lease runs out in October.
But, I'm not sure what my next move is.

Do I:

a) Focus on paying Lowes and the IRS off by October and try and buy a
house with no (or little) money down?

b) Pay off Lowes and the IRS and then move into a cheap ($500/mo)
apartment in October and proceed to pay down my student loans while
saving for a larger down payment on the house?

c) _______________ (Fill in the blank)


Ideas and suggestions welcomed.

Chris