A Wedding, a wife, a house oh my!!!

[mredskins]

Originally Posted by skinsguy

WaldSkins: Let me address your original question first with some sound advice:

1. PAY OFF THE DEBT FIRST! No questions asked. PAY THE DEBT OFF FIRST! As attractive as it might sound to fall into a no down payment situation with a house, and again, I'm in the same boat as you, don't put buying a home in front of paying off the debt.

2. Before you even think of saving for the house, you need to SAVE UP AN EMERGENCY FUND FIRST! Your goal on that is at least 3 to 6 months worth of living expenses. What if you buy a house and both of you lose your jobs? You gotta have an emergency fund. DON'T RELY ON CREDIT CARDS AS AN EMERGENCY FUND!

3. Once #1 and #2 have been satisfied, decide what your intentions are on a house purchase. Do you plan to live there for at least 10 to 15 years? You need to know this before you buy a house. Whatever the answer is, you definitely want to be saving back money to either purchase the house straight out (yes I know that's probably not realistic for most people) or for a down payment NO LOWER THAN 20%. Don't go into a house purchase without knowing what is you're wanting to do or what it is you're actually purchasing.

4. Once you have found the house you want to purchase, it doesn't matter if it's a starter home or if it's one you plan on being in for the rest of your life, you need to budget out your mortgage payments for a 15 YEAR LOAN! Trust me, you'll be paying nearly double for that house if you get sucked up into a 30 year loan. And also, don't budget it on both salaries, budget it for one salary. Most people go out and grab the 30 year loan thinking they can always double up on the payments, but almost nobody ever pays double on their mortgage.

Now, don't listen to people who say investing in real estate is not worth it. It IS worth it, but you HAVE to be smart about it. You can't go in over your head on a purchase. And for the love of everything that is burgundy and gold, don't purchase property in hopes of turning it into rental property UNLESS IT'S PAID IN FULL! That's a bad, bad move that can seriously get you into a bad financial situation.

Now, are there any decent apartments in a decent area to rent that are cheaper than $1000 a month? If so, move there! Even if the apartments are smaller, maybe not as nice, this is just a way for you to free up some money to get you started. If not, then one or both of ya'll might need to think about a second job - at least until the debt has been satisfied. There's nothing wrong in both contributing to the savings for a house, but like I said earlier, the payment for the house should be based on one salary.

Not necessarily true all depends on your cash flow. As long as you can float the mortgage when no one is there you can pull it off.