Home Buying in 55106>Question Details

Jennifer Kuh…, Other/Just Looking in 55106

I am thinking of buying a house but am hesitant because of student loan debt.

Asked by Jennifer Kuhlemeyer, 55106 Thu Dec 25, 2008

I have 30,000 in student loan debt and 10,000 in personal loan. No credit card balances. Gross income per month is 3700 (that's my 2 jobs). I also have 9000 in savings. I plan on staying in the area. I would eventually like to find one job that would pay the same as my 2 jobs but that may require going back to school again. I would hate to rent and throw my money away if I could afford to invest in a house.

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I want to start by telling you that there will be plenty of agents and loan officers weighing in here to tell you that prices are at their lowest point in years and that interest rates are inredible and this alone justifies the purchase.

Please don't buy a house right now. You can certainly qualify for a loan, but that doesn't make it the right move. There are too many risk factors in your situation that could throw you into a tail spin if you own a house. The time will come, but for now you should rent and save up some money and pay off your debt. When you buy a house you want it to be a blessing, but if you buy now, you will be one layoff away from complete disaster.

Merry Christmas and Good Luck

Cameron Piper
Web Reference: http://www.campiper.com
2 votes Thank Flag Link Thu Dec 25, 2008
There alot of interesting answers to this question and going on the bare basics you gave its really hard to make any recommendations. What is your debt to income ratio? What are you paying for rent? What is your credit score? How long have you been at both your jobs? What price range are you looking at? Are you willing to do a fixer up or do you want turn key living? You are obviously a first time homebuyer and would qualify for that credit if they extend it.
Rates and prices are very low but that alone should obviously not be your motivating factors. Then there are the intangibles. Do you want the pride of home ownership, do you want to be able to do whatever you want to your own home, do you want to pay the plumber when a pipe breaks, do you want to pay for water and trash.
There are so many things that go into this decision that you really should speak with both a great Realtor and a great Mortgage Planner. This may be the best time ever for you to buy a house and it might be the worst. But you wont know if you dont investigate.
0 votes Thank Flag Link Tue Oct 27, 2009
you never said what your monthly debt obligation is (monthly payments, etc.)

That actually matters more than the total amount of debt.

My wife and I (combined) have about $45,000 of student loan and other debts. But we also make about $7000 per month. We were able to afford a house with no problem.

that said, you definitely want to save up more for your down payment. $9000 in savings is not enough. You'll want to have enough to put 10% down on a house (at least!!!) and have an adequate cash reserve for backup in case something goes wrong (around 6 months' worth of mortgage payments, for example)
0 votes Thank Flag Link Fri Dec 26, 2008
Jennifer, The first answer you recieved from Cameron Piper may not be the one you wanted to hear, yet is the best you are going to recieve. (IMHO)

You will find a lot of people willing to sign you up and help you "get a home" but that does not mean it is a good decision. Take this time to learn as much as possible about what's going on in the RE market, read through the blogs and Q&A, look at everything you can about everything...

The last thing you need in life now is to make a financial committment for a large property purchase and find out you can't meet your obligations..You have time, the houses are not going anywhere, more will be for sale, and you will have the time to inform yourself so you can make a good solid decision..

Just my 1.7 cents worth.........Good luck, Dunes
0 votes Thank Flag Link Fri Dec 26, 2008
Jennifer, you think renting is wasting money? Follow the link and see how much more money you would be wasting as a loan owner, I mean, home owner.
0 votes Thank Flag Link Fri Dec 26, 2008
if you haven't had your 2nd job for 2 years, most lenders won't count the income. Personally, I think you need to pay off your debt before you incur more.
0 votes Thank Flag Link Fri Dec 26, 2008
Hi, Jennifer!
It's best for you to talk to a lender who will take the time to review your monetary situation over all, rather than just running numbers to tell you what you qualify for. I would recommend Alec Grebis at Cornerstone Mortgage. Try his website at http://www.themortgagescoop.com or http://www.mnhomeloan.com. They have services that can give you a more well rounded picture of what your best financial moves should be.

They will also provide you with the necessary pre-approval letter you will need to get the process started. Let me know if you need a buyer specialist. That's what I do!
0 votes Thank Flag Link Fri Dec 26, 2008
Mortgage broker is your best resource provide you expert answers to your questions. Your entire financial file need be reviewed credit score, debt ratio, employment history and etc. BRAVO for you wanting to purchase than rent. Matter of fact all particulars work on your behalf. Home ownership you receive yearly tax deductions, build equity.
Web Reference: http://www.lynn911.com
0 votes Thank Flag Link Thu Dec 25, 2008
Jennifer you should meet with a local and trasted mortgage broker. stay away from internet lenders. The loan officer will be able to prequalify you for a mortgage and assist you in restructuring or referring you to someone who can assist you with the debt. If you can afford to pay rent, you can afford to buy a house with good credit and and some savings. It is worth every effort to meet with someone know with rates this low and prices at rock bottom,. good luck with your search jennifer.
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Thu Dec 25, 2008
Jennifer - I have to agree with the other answers you got on this one. I wouldn't want to see you buy a house right now. You need to pay off some of the debt you have before incurring more. Thing of another loan as a big weight on your shoulders that could buried you. Hat to sound so negative but I waited an extra few years and paid off my college debt before buying and am happy that I did.
0 votes Thank Flag Link Thu Dec 25, 2008
I think it is better for you on restructure your student loans rather than looking to purchasing a property. Wanting to purchase a house now is understandable, but you want to make sure you are in a good postion of having at least 6 months staying power after you purchase would be completed. If you don't have the staying power, it is best to work on getting your student loans paid down or restuctured.
0 votes Thank Flag Link Thu Dec 25, 2008
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