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Buy house or pay off more debt?

datalink7

datalink7

Lifer
Hi all,

I am about to move to Kansas and was considering a few options. I could either:

1) Rent the cheapest apartment possible (would be about $550 a month) and use the excess money to pay off some of my debt (I still have a decent amount from college as I didn't get any scholarships and put myself through (my parents have no money))

Or

2) Buy a house (with a loan obviously) and pay off debt more slowly.

I'm 23 at the moment. The reason I was thinking about the house is that it seems silly to me to pump $550 a month into an apartment that I'll never get any return on. I'd rather put that money into a house. But then again I could use the extra money I'd save by renting to work towards paying off my college debt and car payment.

Of course I'm posting a little from ignorance here. I didn't think I was going to move to Kansas for a while yet so I haven't done a lot of research on buying houses. It just came to light that I'm moving there in about 2 weeks (so I'll probably rent for at least a few months anyway).

Any thoughts from anyone experienced in this, or some good websites to visit? You could PM me to.

Thanks 🙂
 
how much is a house over there?

how much is the mortgage payment compared to paying rent?

how much debt do you have?
 
I dont know about the Kansas housing market but if you were moving to a coast, I'd recommend paying off your debts and then buying a house in a couple years after prices drop a bit, interest rate will probably start going back down then as well.
 
Gotta post some semblance of numbers to help us out.

Overall at your age it's a better idea to buy a house than rent.
 
I mean if you're going to be in Kansas and can get a decent small home for about the same payment as renting, then I'd go for that.
 
Originally posted by: Slew Foot
I dont know about the Kansas housing market but if you were moving to a coast, I'd recommend paying off your debts and then buying a house in a couple years after prices drop a bit, interest rate will probably start going back down then as well.
Click to expand...
Not going to happen anytime soon...
 
23? Youre too young to leave the house. Go back to mommy and daddy, payoff your debts and then buy a house.

/thread


(unless of course you have to have wild sex parties or have a crazy drug habit, then you'll have to rent 🙁 )
 
do you have a gf/bf? if not, then i'd recommend you move back in. if you do, then get a place with her. 2 incomes are better than 1.
 
If you can buy for about the same as you can rent (which does happen), then I'd say buy!

Otherwise, map out your figures...bills versus income and then make an informed decision from there.

Good luck! 🙂
 
Originally posted by: SampSon
Originally posted by: Slew Foot
I dont know about the Kansas housing market but if you were moving to a coast, I'd recommend paying off your debts and then buying a house in a couple years after prices drop a bit, interest rate will probably start going back down then as well.
Click to expand...
Not going to happen anytime soon...
Click to expand...

which one? the house prices cooling down or the interest rate going back down?

huge possibility for both of them

just in southern CA, there are TONS of condos flooding the market now.. sellers and condo flippers are getting hosed
 
Originally posted by: z0mb13
Originally posted by: SampSon
Originally posted by: Slew Foot
I dont know about the Kansas housing market but if you were moving to a coast, I'd recommend paying off your debts and then buying a house in a couple years after prices drop a bit, interest rate will probably start going back down then as well.
Click to expand...
Not going to happen anytime soon...
Click to expand...

which one? the house prices cooling down or the interest rate going back down?

huge possibility for both of them

just in southern CA, there are TONS of condos flooding the market now.. sellers and condo flippers are getting hosed
Click to expand...
Southern CA and other simliar markets will readjust themselves, but there will be no "crash". Flipping isn't a healthy practice for the market anyway. The demand far exceeds supply in thoes areas and until that magically changes then the market prices arn't going to shift dramatically, or noticeably.

The rates are staying low and the market is still hot. It's now getting into spring time and this is when the market starts back up into full gear again. If you live in an area that doesn't see a huge jump in new listings starting in March then there is something very wrong. In just about all areas new active listings should jump by a good couple hundred percent.
 
Owning a house involves much more than paying just mortgage. You pay for water, gas, electricity (of course), sewer, and garbage disposal. Those add up to be extra $100 to $300 a month. Plus tax on the house, which could be quite a bit.

I would recommend that you first payoff any debt you have. If you happen to lose your job, you will be in major debt if you buy a house.
 
Originally posted by: JinLien

pay off debt then buy.
Click to expand...

This is why you don't come to ATOT for financial advice.

First of all you need to tell us how much debt, at what APR. If it's CC debt then you can transfer the balances to a 0% card and promise yourself not to use it. If it's a car loan, chances are it's at a good rate. Your mortgage interest deduction will help lower your tax bill, and if you don't want to get new CCs (which would no doubt affect your FICO) get a house and an equity line to pay off high interest loans (i mean it has to be significantly higher to risk shifting it to your home equity); home equity mortgage is also tax deductible.

Oh and last thing, if you don't have 20% down, I would recommend you save until you do before purchasing a house.
 
Remember.... if you take to long to pay the depts if you buy a house they can take your house and you will end up with nothing.... 😛
 
You don't give many details (income, amount of debt for car and Credit cards) , but generally you can get better mortgage rates and terms if you have less debt. These rates and terms last a long time (try to get best rate for 15 year fixed) and with less debt you have more money to pay the mortgage. If it was me, I'd say pay off everything but student loans first. I'd suggest paying off the lowest BALANCE items first so you can knock them out one at a time.

A "$1,000 emergency fund" is always a good idea, but when you own a house you should always have a few thousand tucked away for emergencies.


Jim
 
Buying a house/renting is not all about finances.
Go to the town, rent something, and take stock of what is available. Check out your job.
Check out all the places for sale, different areas.
You might be ditching that scene sooner than you think, and dealing with a house purchase and a sale in short order is a pain in the ass.
 
if you have student loans, look into consolidating them to lock in an interest rate before the july 1st cutoff. also, make sure you have 3-6 months of funds available for emergencies (like, you're laid off and you don't get another job for 3-6 months). after that, i would consider buying if it's in the same range as renting and you're planning on being in the area for at least 4-5 years.
 
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