I want to buy a house, but where would be the best place for an aspiring architect?

Question

I just graduated college with my architects degree for 5 year program and was wondering if i could mortgage a house that costs around 120,000 and less, while having a nice car as well? coudl soembody pelase advise me about what should i do and my income i am assuming would be around 45,000-55,000 starting out.

i would like a nice car around the 40,000 range and a decent house, or what should i do?

Answer 1

take in consideration this;  the bank wants you to make at least 3 times more then your mortgage, which you do, also they will take in consideration, the car payments and all your other expenses, you could have both, but it will be nice if you, go easy in your expenses, try to get a 15 years mortgage, rather then a 30 yrs.

when you buy a property, look for location, is the most important thing, may sure that the taxes are not too high or/and the maintenance if is a co-op or a condo (even though, they are tax deductible)

Good luck and congratulations

Answer 2

Your car payment should never be more than 8% of your net income. And, never more than 33% of your yearly net income.

So for starters. 3 year loan on a 40,000 car will be upwards of 900 dollars a month. Granted a five year loan will get you in the 650-700 range.  But do that math.

THAT IS RIDICULOUS. 700 a month x12 = 8400 hundred. Throw in insurance, you are easily looking at 10,000 a year to finance and insure a car.

Say you earn 50,000 a year. You are out 5000 almost in FICA (SS/Medicare/Unemployment) taxes.

Now you are at 45000. Imagine paying upwards of 10,000 in income taxes to state and feds. Now you are at 35000.  Health insurance, medical bills and dental bills, probably another 2 or 3000. So you are at 32000.  

Now take 10,000 for the car and a modest - and mean modest - 2500 in gasoline and 1500 in maintenance.  You went from 32000 after taxes and health care costs to 18000.

You are now looking at 18000/12 = 1500 a month.

Is the car worth it?

120,000 home at 30 years at current interest rates. You are looking at 900 dollar mortgage - not including utilities, garbage removal, furniture, upkeep, and cleaning supplies.

I think you can afford one or the other, but not both.

A car is a car brother. buy used and economy to start. You are young.

A house is a very good investment, especially compared to a car. Even in todays market cars loose value much faster than property.  

Your goals should be:

1 - find job with wages you want in a city with LOW costs of living. (I live in Saint Paul - Minneapolis, Minnesota, not exactly chicago, nyc or san fran, and 45,000 even for a single 20 something is not much)

2 - find secure employment with health and dental insurance

3 - invest in retirement accounts through work or low cost broker RIGHT AWAY

4 - save for the house

5 - splurge on the car last.

Good luck, and congrats on graduation.