Monday, January 5, 2015

What would you do?

Now that my credit cards are paid off, a new question has popped into my head and I'm looking for advice.

I currently rent a room in a duplex with 2 other roommates. The location is great and the rent is roughly $500, which is fairly cheap for this area. Our lease is up at the end of April, both roommates are moving out and I find myself at a crossroads.

Do I use these next few months to save for a downpayment and buy a house? The housing market is still good and interest rates will only be getting higher by next year. I would find a 3 bedroom with 2 roommates to pay the mortgage for me. My current $500/month would go into savings/home maintenance expenses.

OR

Do I find 2 new roommates and stay where I am. Continue to pay $500/month and continue to pay off debt for at least another year? I may miss out on equity on a house and cheaper housing costs down the road but I avoid unexpected expenses that come with home ownership and I would have more time to save for a stronger down payment maybe next year.

What would you do?

4 comments:

  1. Honestly, since you still have a bunch of debt - I'd continue renting and paying down those suckers! :) But that's just me.

    If you'd like to explore the rent v.s. buy debate further I collected some good articles and a cool rent v.s. buy calculator when I wrote this post last year - http://mrcandmeblog.wordpress.com/2013/03/15/lets-talk-money-part-4-rent-v-s-buy/

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  2. I think it would depend on your personal finances. Honestly, I think buying a house is well worth it if you can guarantee you can afford it, why put your money into rent if you can put your money into something you will get a return on. BUT you have to be able to afford it by yourself, because what if you wouldn't ever be able to find roomies or they all bailed suddenly- you don't want to put yourself in that position.

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  3. Since I listen to Dave every week day during work...I always here how he handles this type of situation...so I usually always take his advice when making my own decisions that are similar so that's exactly what I will tell you. I would continue to rent. Think of it in reverse...who you go charge items on your credit card to be able to save money to put down for a house? No, you wouldn't (at least I don't think you would). It's the same thing...continue to pay down your debt and wait to buy your house when your ready. I know it seems appealing to buy the house...but as Dave also says...Murphy finds his way into those type of situations! Hope that helps.

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  4. I would continue renting - because that rent price is insane!!! Houses are expensive and in order to qualify for a mortgage without paying mortgage insurance you will need to have a large amount for a down payment!! The down payment isn't enough to have saved to buy the house - I've learned that lesson the hard way!! You may need window treatments, rugs, paint, etc for the new house and it adds up FAST!!!! You also want to make sure you can afford the payment alone - because being at the age where people meet boys, get engaged - then married, you never know when you could lose a roomie!!

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