Buy now, or buy later???

[ivol07]

Here is my dilemma. I have $10k in credit card debt, $3k in loans, and $5k left on my car. Now, I am in a very fortunate situation where I am paying all these debts down to where they will be gone by next March if I stay on schedule....which I hope to do. So far so good. I am going to buy my wife a new car this month, which will be financed for $19k.

I want to buy a house, but I'm debating on whether or not I should jump now, or wait till everything is paid off and then buy. Obviously if I buy now I won't have the extra money to pay off these debts as quickly, but I will have a house that is earning equity and I will have gotten a low rate. But if I wait the 7 or so months until this debt is paid off I'm afraid the rates will go up, which is not good. But then I will only have one car payment and no other debt, which is good. I keep telling myself I should wait, but then I have 100 people telling me I have to get in the realestate market right now while the rates are low and that the rates are going to rise soon and blah blah blah.

Do you think the rates will rise that high in the next 7 months or so that it will make a huge difference? Should I just choke it up and buy a house and be broke for a while? What would you do?

 

[Mr N8]

Wait. Interest may go up some, but housing costs should go down. It a lot harder to get a good mortgage with that kind of debt, anyway.

 

[Encryptic]

I'd pay everything off first, just to CYA. Why assume a big debt like a house with all that other stuff on your ledger as well?

 

[aircooled]

Buy the house and try to roll some of your debt into the mortgage.

 

[filmmaker]

Pay the debt and then go for the house.

 

[aircooled]

Mortgage = 5% or less
Credit Card/Personal Loans, etc. = 15 - 25% or more

Buy house, roll high interest debt into low interest mortgage. You will need to talk to someone who knows this process in your local area.

 

[ivol07]

Originally posted by: aircooled
Mortgage = 5% or less
Credit Card/Personal Loans, etc. = 15 - 25% or more

Buy house, roll high interest debt into low interest mortgage. You will need to talk to someone who knows this process in your local area.

But wouldn't this just be prolonging my debt for 30 years?

I guess now that I look back at what I wrote, my real question is do you think rates are going to go up dramatically in the next 7 months or so.

 

[Bryophyte]

Originally posted by: ivol07

Originally posted by: aircooled
Mortgage = 5% or less
Credit Card/Personal Loans, etc. = 15 - 25% or more

Buy house, roll high interest debt into low interest mortgage. You will need to talk to someone who knows this process in your local area.

But wouldn't this just be prolonging my debt for 30 years?

I guess now that I look back at what I wrote, my real question is do you think rates are going to go up dramatically in the next 7 months or so.

Wait on the house for a bit...
Sure, interest rates might go up, but housing prices usually do the opposite...and when the interest rates fall back down, you can refi and get both low price and low interest rates. Plus, do you have any idea how stressful it would be for you to hold that much debt at once? Oy vey, I do.

 

[aircooled]

Credit cards/loans/car = High interest debt
House Payment = Investment


edit=spelling

 

[JACKHAMMER]

I say buy now. I believe intrest rates will go up, and home values will continue to go up.

 

[jagr10]

Don't buy now. You're obviously not in a position to. It's your choice, but I'd recommend you stay on course and pay off your debts before you even by a new car or house.

If you think now's the time to buy a house then don't buy a new car. Buy the house first. YOu'll be paying through your nose with the mortgage payments and you don't want to be in a situation where you may lose your job and you lose the house too. Plus, it's hard to get a good mortgage rate with debt. If you buy a house and a car you'll screw your chances of paying off your current debt. You'll make it 10 times worse. You're not that far away if you say it'll be paid off in March so keep at it.

 

[Crucial]

Good god man why would you even think of buying a car and a house when you already have so much debt. I felt like I was drowning and I only had about $5000 in debt. Thank god thats all paid off now. It feels damn good to pay off the CC every month now.

 

[heartsurgeon]

old saying "your eyes are bigger than your mouth"

you going to get a severe case of indigestion if you try to swallow down a mortgage payment to boot.

1) do you have enough money to pay 20% of the house cost? being able to do this eliminates your need to pay for mortgage insurance (lost money!)
2) you may not qualify for a mortgage loan if your cash flow is not high enough
3) have you thought about what might happen if you get sick and can't work for several months..you may think this will never happen to you...but it most definitely can..how will you pay off this debt if your ability to work or your job situation changes?
4) pay off your credit card debt as fast as possible...a home is not going to appreciate as fast as your credit card interest rate!...pay that sucker off immediately, your crazy to have credit card debt and be thinking about acquiring MORE debt..pay off the credit cards as fast as possible, then go from there.

don't forget when you buy a home, you have property tax, closing costs, insurance payments, maintance, and more (furniture, window blinds, lawn care)

 

[ivol07]

I didn't mention that the $10k debt is not mine. Well technically it is..... it's a long story but someone (MOTHER IN LAW) gives me a check every month for her debt which is under my name. This is supposed to get paid off when she refinances her house in November. The only reason we are buying a new car is because my wifes lease is up. We can afford these things no problem, but only because right now our rent is $950. Right now we are paying down OUR debt and putting money into savings with no problems. The only money we put towards the $10k is what she gives me. No money out of our pocket. It's always more than the minimum required.

I guess I should just wait. It would be ideal for me to only have one car payment and a mortgage to pay every month. Instead of all this other crap which is easily paid off right now. I just get nervous because I have 100 people telling me "Now or Never" on the house.

Edit:

have you thought about what might happen if you get sick and can't work for several months

I think about this all the time. I do have months of pay in savings just in case. The downpayment is not exactly 20%, but we have one. The one thing we would never do is clean out our savings just to get into a house. I'm to paranoid and always have to have months of pay in storage just in case.