Re: Mortgage payment.

You get the idea from everyone above. We did the same things - paid off our credit cards, only 1 car, saved up money for closing costs & downpayment, bought about 50k less than we could 'afford', and bought a small starter home with ridiculously low taxes.

We changed our ideas about things along the way too. We started out with an entirely different budget. We will also have our car and his school loan paid off within 2 years which will free up thousands of dollars a month. So we have a goal and a game plan, and had all of this in mind with every house we saw.

Good luck to you. You can do it, you just need to plan ahead, be patient with the solutions you employ, and possibly make some compromises for the bigger picture.

Re: Mortgage payment.

our mortgage is 4K. We have two car payments but one will be finished in a couple of months. We do not have any credit card bills. We still are able to enjoy our lives but we know our limits. My DH makes awesome money and gets bonuses. With the bonuses we do the extra things like take vacations. If he doesn't get a bonus we don't go. I am a NYC teacher so I make maybe 1/3 of what he does. Sometimes it is scary expecially with a baby coming to know how much everything costs but we figured out a buget BEFORE we bought the house and made sure we would be able to afford it.

Re: Mortgage payment.

I guess my answer may skew a few things because we are older (35) and bought our house back in 2000 and paid half of what we could sell it for now. Our mortgage is reasonable. My DH works for a family business that gives us very nice perks and we don't have some expenses that most do. I'm a SAHM and we make it work. We do go on vacation, but its to a little family resort for a week in CT or PA and we save to do house work without getting into debt.

Re: Mortgage payment.

Also, I wanted to add that if you don't own anything right now, you might want to start out with a co-op or condo. We had a co-op when we bought our house, and that helped us out with the final costs considerably.

So like everyone is saying, if a house is your goal, pay things off, reduce your expenses, move high interest loans into lower interest plans, and think about buying something smaller to start. You can stay there a few years, then sell and buy a house. There are a lot of them on the market now too, so if you have any money saved, it's not a bad time to start out.

You also need to think about what's important to you. If owning great cars and taking trips is a priority, then maybe a house just isn't in the cards. You could still get a nice co-op or condo and have those things with less moderation than a house. I don't think everyone can or should buy a house necessarily. It depends what you want.

Good luck!

Re: Mortgage payment.

I just wanted to add that coming up with your budget is an extremely personal thing and one that only you and you FH will know is right for you. You will be the ones living with it. There is a lot of really great advice in this thread and at the end of the day it has to be something you guys can handle long term.

When we started our financial planning I was much too aggressive with the putting money away to the point where DH felt really restricted and was miserable. Our goals were long term and he felt like we were making too much every day sacrifice. He wanted to be able to buy lunch if needed, or get a starbucks if he felt like it without me getting all bent out of shape about it. So you guys can expect some trial and error in the early stages. Since you are getting married though, it will be so good to have a plan already in place since there is still adjustment after being married even if you already live together. Just try to set your goals and timeline together, one that you both are totally cool with, and then you can back into the numbers, evaluate what the schedule means for you and FH now, and then adjust accordingly.

Re: Mortgage payment.

I also want to add- there is no law that says you need to get married and buy a house right away

we are going to be married 2 years in December and waiting to buy our first house was the best decesion

not only have prices dropped (what we were waiting for), but we know more of what we want and what we don't want

this has given us time to pay down debt- it will be gone by the time we buy

we also have 2 $$ car payments (more then yours to be honest- not by much but more) and we enjoy our lives - there is no way my DH will give up his car- he would rather live in it- and if that motivates him to get up and work his a$$ off- then so be it

we work hard and we play hard- and so it takes us 3 year to buy a house- last time I checked- it wasn't a race

and I know a few people that a regretting there decesion to buy so soon -they settled for a house they don't love and a location that doesn't work the best for them- and now they can't sell it with out taking a loss

Re: Mortgage payment.

Message edited 11/16/2007 12:49:40 PM.

Re: Mortgage payment.

I saw in another post that your student loan payments are so high b/c you're trying to pay your loan off as quickly as possible. Combined, DH and I have larger student loans than you and our payments are much lower than yours.

I know you want to be debt free, but if you really want a house, you may have to sacrifice and take more time to pay off your loans. You need to decide if paying off your loans in 10 years vs. 20 years is more important than owning a house. If you really want to buy something, I'd increase the time that you have to pay back the loan (if you can do this). I'd also look into consolidating and doing whatever it takes to lower that payment.

Re: Mortgage payment.

Re: Mortgage payment.

It all depends on what you think is a good salary. We have a nice income - but the problem is - you always want more

We have a $3K mortgage - it's all possible. We have 2 cars (one luxury - but both are paid in full). We don't take many vacations - moreso b/c of kids - but we are lucky to have a beach house and we vacation there mostly and DH has the expensive hobby of golf.

Set goals for yourself and you can get there - whether it be paying down loans, CC; saving a down payment; or looking for a better job or earning a promotion/raise.

Message edited 11/17/2007 8:52:53 AM.

Re: Mortgage payment.

I agree with the posters who suggest living beneath you means. There is nothing saying you have to start out with a huge house, what about buying smaller or a fixer-upper and working your way to something else?

I'm not the kind of person who is worried about status; expensive things don't really make me happy, but debt does make me feel tied down. I drive a 98 subaru and will until it dies, DH drives a 2001 Jeep, we'll have that until it dies. My Student loan payments are about $800. We have no credit card debt, I feel that if we don't have the money we shouldn't buy it. If it's something we really want, we'll save for it. We take vacations and go out for entertainment, because you still have to live and enjoy your life.

If you really want a house, I'd try to work on your personal debt, increase your savings and find a house that you can afford, it may be a starter house instead of a dream house - but you will be building equity for your next home :)

Good Luck

Re: Mortgage payment.

Re: Mortgage payment.

Re: Mortgage payment.

Posted by MrsD06

Posted by Kara

Agree to pay CCs first, but if they are in my boat, their income is too high to deduct the student loan interest. If that's the case, they should try to decrease their higher interest student loan debt. The lower interest debt they might be able to eventually refi into a HELOC so the interest is deductible.

I'm confused by this. Isn't it best to pay the highest interest debt first, regardless of what it is? (cc or student loans). In other words, why pay "the higher interest student loan debt" first? thanks!

Re: Mortgage payment.

I don't...I live in NJ. Our pmt is $2400 / month. We have a 3.5 BR colonial.

ETA after our wedding, we took all the $$ from the wedding gifts and paid off all of our debt. Then we were approved for a mortgage.

Message edited 11/18/2007 12:24:52 AM.

Re: Mortgage payment.

We pay $2500/month and don't make a ton of money...but it was a priority for us.
We still do things together - dinners, etc. We don't go on vacation so much anymore, but DH's family has a house on a lake in CT. that we take advantage of during the summer. Plus, we have kayaks and we do that around here. We have two cars...DH's is a beater and mine is an 03 Santa Fe...he will buy new once mine is paid off.

I agree with paying down your debt before getting serious. It will make a big difference in your lifestyle if you do buy a house.

Ultimately, you have to do what is right for you. There are quite a few people on here who have elected to rent as opposed to buying. Honestly, sometimes I miss renting - we had so much disposable income. But, you are also at the mercy of your landlords, co-tenants, etc. Owning your house gives you the right to do what you want, when you want in many aspects.

Re: Mortgage payment.

Posted by Meaghan729

Posted by MrsD06

Posted by Kara

Agree to pay CCs first, but if they are in my boat, their income is too high to deduct the student loan interest. If that's the case, they should try to decrease their higher interest student loan debt. The lower interest debt they might be able to eventually refi into a HELOC so the interest is deductible.

I'm confused by this. Isn't it best to pay the highest interest debt first, regardless of what it is? (cc or student loans). In other words, why pay "the higher interest student loan debt" first? thanks!

i think the OP mentioned that they have more than one student loan (maybe in another post..) but people sometimes don't pay off a student loan if there interest rate is higher than a CC because you can write off the interest on a student loan on your taxes but only up to a certain income level

Re: Mortgage payment.

Message edited 11/18/2007 9:40:04 AM.

Re: Mortgage payment.

We found that we couldn't. One of the things that made me so angry was that two intelligent, college-educated young people couldn't afford a house on LI--and we were both working our a**es off.

In the end, we moved off LI, and the stress level is much lower.

Re: Mortgage payment.

We do it by not taking the nice vacations and not having an expensive car payment ($800+ is a lot IMO.) You have to make choices. I think you answered your own question in your original post. You recognize that you have to give up the extra-nice car, vacations and other items that lead to your cc payments in order to have the $3000+ house.

Re: Mortgage payment.

Thanks everyone for their help. I really commend everyone who has large mortgage payments and are making in work. My situation is a little different because my FHs job is in Texas. So we live there half the year and then LI for the other half. This causes our living situation to be difficult. We pay rent in TX (would not buy there anytime soon--market there *****). And then stay with parents while we are here in NY. The only problem is that we are getting married in 3 months and the parents thing is not going to work anymore. In addition like I said before the student loan and car payments are high. And even though some might critize us for having high car payments its just not something that is negoitable to us. Everyone splurges on something and we spend on our cars. I did find a nice part of queens that I like. They have a lot of new construction going up. The house I like in particular is a two family which will help reduce our out of pocket drastically (leaving about $1500 for us to pay). The credit cards will be payed off with the wedding money. And Im going to try to consolidate the student loans.