So I got another bid on the house, about $5k more. We have until the 26th to have the bids in and then 15 days after to close. This is my dad's house.
My attorney told me I'll be able to get all my legal fees and tax money back. The good news is, with the sale of the house I should be able to pay off debt.
Here's my dilemma and I need your help. As you all know, I'm following the DR plan. Dave says not to buy a house unless all debt is paid off. And 3-6 month expenses are saved.
First, I can take the money from the sale of the house and pay off all CC debt and half of the lower student loan.
Secondly I can pay off all CC debt except maybe one card 💳 and keep the student loan using the remainder of the money for a down payment on the house.
The house, well villa I'm in is being sold to me for below market price, about $20-30,000 less. The mortgage will be $635 about $300 less than what I pay now in rent.
I'm thinking if I go with option two, I could have the one CC paid off by or before the end of the year and be left with the student loan and a mortgage. I'll be tackling the student loan and with no CC debt (about $1000 a month in minimum payments) I should be able to knock out one loan in a year and a half.
I'm really nervous about letting this villa go, the price is too good to miss out on. Homes in the area sell for about $300k and have stayed high even during the recession, the only slightly decrease. To get this place at $140k is a steal. Plus I've been living here for the last 7 years.
I'm in Palm Beach Florida and yes homes are extremely expensive, we are one of the richest counties, roll my eyes, in the nation. Homes in the worst neighborhoods (crime) are selling for $190k +
If I could pay off Target before the sale, that would leave me with 6 CCs. I'm sure this card will be paid off by end of month early April. With that being said, I'd knock out all CCs except number 10, paying it down by at least half.
Now, I do have about $15k in a savings account. As you all recall that's money I do not want to touch and it's not listed on my sidebar, this would be my 3-6 months worth of expenses should something happen.
I know I know but I'm really leaning towards buying the villa, ugh! I just hate I got myself back into debt, it makes me sick.
House Dilemma 🏡
March 21st, 2018 at 10:51 am
March 21st, 2018 at 11:21 am 1521631300
March 21st, 2018 at 11:22 am 1521631374
If you run your budget with those figured and all, how would the the debt repayment look? Would you have any emergency fund?
March 21st, 2018 at 11:23 am 1521631418
However, can I suggest some questions to ponder? If you had to buy any property in FL or the US, would you live where you currently are? Is this where you want to be long term? Is this the only bargain that exists, or will ever exist? Is making yourself sick by taking on more debt healthy? Does this villa have repairs that need to be made in order to sell later? Will that really make it a bargain? In my opinion, there are always other properties to buy. You are buying into the fact that this is the only home that will ever be a bargain.
Is there a deadline to purchase this property? Is it on the market or just being offered to you because you live there currently. Could you wait a year and hold the funds while you consider your options?
March 21st, 2018 at 11:40 am 1521632436
HOAs go up and every now and then you may get hit with a special assessment.
March 21st, 2018 at 11:47 am 1521632871
So I would be able to put the 20% down with no PMI. If I escrow, then the total amount due a month it would be what I pay in rent, approximately $950-$1100.
I do have an additional $4K set aside, that I will use to pay the HOA for the year, monthly HOA is $175.
CCF- Actually, if I was to buy this would be the area and I don't plan on moving from this area. There's no repairs on the home, it's in mint condition. Other than upgrades that I want vs need, nothing needs to be done. I did want a home with a yard but as I get older, being single and no kids, it will be difficult for me to manage. Here there's no yard or external maintenance.
Yes there's a deadline, the owner has actually held out for me about 5 years and she's ready to sell.
I've crunch the numbers with my income, CC paid off I can manage the mortgage and loan payments. I'll be able to save about $100 a month and pay and extra $100-200 on the loan. I'll recheck to be sure though, including taxes.
March 21st, 2018 at 11:53 am 1521633185
March 21st, 2018 at 11:57 am 1521633432
March 21st, 2018 at 11:57 am 1521633457
March 21st, 2018 at 11:58 am 1521633536
March 21st, 2018 at 03:28 pm 1521646113
March 21st, 2018 at 03:49 pm 1521647381
March 21st, 2018 at 04:48 pm 1521650919
One thing you've not yet described here is a comparative of units in your price point, cost per square foot, compare & contrast the on-line, plus and minus features. A 2nd question is what is the best rate you can get on a mortgage? Rates are expected to increase, every single point is critical over such a lengthy term. Next, have you considered a 15 yr mortgage? Due to the way interest is front loaded, could you handle that cost? [I don't know if SO consistently, contributes to the rent] If he departed, would that affect your plan?
March 21st, 2018 at 07:38 pm 1521661131
Also, what happens if you lose your job and you still have debts to pay on top of a mortgage? Unemployment only goes so far and it is not far. $15K as an EF may seem like a lot now, but as someone who went through 10 months of my husband being unemployed and having to buy our own medical insurance, I can tell you that money will go a lot faster than you think it will. I'd double your $15K before even thinking of buying a home.
I think you are letting this deadline pressure you into making a choice you aren't quite ready to make. If it were me, I'd rent for a couple more years, get the debt gone, get the savings built up, get the down payment where you want it, then purchase a home. It is easy to rush into things and it is hard to wait. But you may end up with some pretty severe buyer's remorse if you do this.
Ultimately it is up to you, but you need to think long and hard on this decision and not let things pressure you into making a choice you really aren't ready for.
March 21st, 2018 at 09:28 pm 1521667719
March 21st, 2018 at 09:48 pm 1521668920
I understand the drive to own a home. Both times I bought, it wasn't the most practical decision I ever made and it was a huge financial stretch. I love my current home, so emotionally it was the right decision, but it has definitely caused more expenses and headaches than I foresaw.
March 21st, 2018 at 11:59 pm 1521676779
March 24th, 2018 at 01:01 pm 1521896469
March 29th, 2018 at 07:18 pm 1522351093