Can we afford this home/should we buy right now?

Question

Fiancee and I are planning June wedding//buying a house with plans to move in in Sept/Oct. We both work full time and have a good amount of money put away, but also have student loans, cell bills, credit card bills, etc, etc.

So far we have paid a $1K deposit to realtor as well as $1400 to bank and $400 for inspection. We will need a new furnace upon moving in , there are also some other issues that a contractor would need to be hired for fairly quickly. We also owe almost $5K for furniture/appliances that we bought for our apartment and did a one year no interest plan. The wedding will be small, but will still cost some money.

I thought the house was a great deal...98K in a great area, has a pool, screened in porch....but I am having second thoughts now. I am scared to drain our savings and take on such a large amount of monthly bills (heat, electric, internet, cable our student loans, cell, etc).

I am starting to feel like we should just forget this, lose the money that we put into it already, stay in our apartment and try to save for a year or two, and then buy a place that will not need so many repairs.

I am having physical symptoms from my stress (chest pain, tics, etc). I don't know what to do. Do we back out now and try to save or move forward because it's a pretty good deal and just spend what we have to spend to fix it up.

Please Please Please any advice....post here or send through private message. This is a huge decision and we don't know what to do.

PS--Our combined income is about 50K at this point, we are new graduates (2 years).

PPS- We have 23K in the bank....but again, need to pay off furniture, wedding, furnace...

Answer 1

Well, your house is an investment. You are building equity in an asset that should go up in value. Also your mortgage interest, property taxes and closing costs are deductible on your federal taxes. If you itemize on your taxes this will help

You have to figure out your monthly expenses and how everything will work out. Furniture can be bought slowly, getting the essentials first (kitchen table,sofa) then get stuff like a dining room set later (or if ever, I know a ton of people that just turn it into a playroom when the kids come because really, who uses a dining room anymore).

Run the numbers out.

What is your monthly take home.

What will your monthly expenses be? Mortgage, utilities, loans, food, gas, ect.

Is what you have left enough?

How do you want to spend your 23k. You have 5k outstanding bills for furniture you bought for apartment. So if you pay that off to avoid the interest rate (highly recommended since they will kill you on interest) you have 18k. How much will the furnace cost? What furniture will you need, you have an apartment so you have the essentials. You will be getting married so you can register for new stuff and you'll be getting money for gifts. Can furnture wait? How much will your wedding cost? Will your parents be giving you money for a gift/wedding expenses?

Can you guys earn additional money, Take on a part time job at a place like Target where you will also get a discount on stuff. It would only be temporary to help you deal with the wedding, house, ect.

Add it all up. See if there is stuff you can wait on.See about getting additional income or cut expenses in other areas. A house is a great investment and I would hate to see you lose the $2k plus you have already put down.

Answer 2

You're way ahead of most people just starting out so don't be too worried about it.  If you are having second thoughts though you should seriously reconsider the deal.

Additionally, if there are things wrong with the house that the seller/broker didn't disclose there is also a possibility that you can get your money back.

You can also go to some sites on line and key in your financial data and it will tell you how much house you can afford.  Here's one I found:

http://www.bankrate.com/brm/calc/newhous...

Good luck and have a happy life!