$40k in bank, $80k/yr, $20k debt. What can and can't I do?
My fiancé has a secure job; $80k/yr, and about $20k in debt. Nothing too unusual.
Can we buy a (mediocre) car and $200k house?
I'm after 'quality of life,' rather than a good investment. There are cheaper houses, but I'd rather keep renting than buy something too small. Getting a less-than-ideal deal on a mortgage is not a big deal. The car, given where we'd move, is a necessity.
Should we stick with the rented apt, pay off the debt asap, and forget the house and car for the moment? I am horrible at saving, so there's a lot of appeal in even a lousy mortgage. There is enough in the bank for the expenses of a new home, though. (Current rent is $900.)
How realistic is a house & car right now, if 'quality of life' is the priority over $?
(NB: in Canada.)
Answer:
The truth is you should buy the home because there's only so much real estate on this planet and they aren't making any more of it. That means the price will go up. This will provide you with quality of life longer than renting because once you buy the price doesn't go up like renting can.
It's America, you can do anything you want.
I would pay of the 20 K in debt for 2 reasons
1. after its paid off you can get a better rate on the purchase of a home
2. you are losing money on your conservative investment because ther rates on the 20 K debt are probably higher than the returns on the 40K investment( eg. return at 5% minus debt at 10% is a 5 percent loss)
- however if you can get a mortgage payment that is close to 900 a month for your ideal home then it may be wise to buy the house because you are throwing away your rent money every month
- for a few hundred dollars you should probably consult a financial planner
If you are set on buying the car, I would do it after you buy the house because the car will count against you if you get a loan to pay for it and reduce the amount you can get a loan for.
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