How much do you put on debt each month?

[disneysteve]

Why would a person take mortgage when he has $75k in student loans!?

I did. Lots of people do. Dave Ramsey wouldn't approve but I think it is pretty common. I finished residency in June 1993 and we bought our house in April 1994. I had $102,000 in student loans at the time.

If you have student loans that will take you up to 25 years to repay, it isn't realistic in most cases to expect people to not buy a home until their loans are repaid. For a lot of people, that could mean never buying a home.

[Hector]

I did. Lots of people do. Dave Ramsey wouldn't approve but I think it is pretty common. I finished residency in June 1993 and we bought our house in April 1994. I had $102,000 in student loans at the time.

If you have student loans that will take you up to 25 years to repay, it isn't realistic in most cases to expect people to not buy a home until their loans are repaid. For a lot of people, that could mean never buying a home.

I am glad that it worked out for you and you are doing good in life. But if I have student loan that will take 25 years to pay off, then why would I think about getting another debt(mortgage)? If I do, I would work my whole life (till retirement age at least) in paying debt and would keep managing debt only.

I might be on minority side, but I dont understand why majority of us think that buying a house is must? I read a lot of posts by you and I agree with you when you say a person should buy house for living and not for investment, but both of us know what majority of us are doing? I bet 'lets create equity in our own house rather than wasting money in rent' is the biggest factor motivating people in buying house(borrowing a large sum in the name of mortgage).

[disneysteve]

I am glad that it worked out for you and you are doing good in life. But if I know I have a student loan that will take 25 years to pay off, then why would I think about getting another debt(mortgage)?

I think it really depends on the overall picture. We bought a modest house and were able to put down 20% and have a total debt to income ratio that was still within the guidelines (28% to house; 36% total). We could comfortably make our house payment and make substantial extra payments on the student loans. The loans had a 25-year repayment plan and I paid them off in 12. We lived quite frugally and focused on getting rid of debt.

[Joan.of.the.Arch]

To answer th OP, the only debt we are paying on right now is mortgage, so we pay that. We just started paying it down at an accelerated rate this year.

I might be on minority side, but I dont understand why majority of us think that buying a house is must? I read a lot of posts by you and I agree with you when you say a person should buy house for living and not for investment, but both of us know what majority of us are doing? I bet 'lets create equity in our own house rather than wasting money in rent' is the biggest factor motivating people in buying house(borrowing a large sum in the name of mortgage).

We decided to buy a house at a time when interest rates had declined hugely (but still double what one can get today), the city was sponsoring a further reduction in interest rate via a guarantee to the lender, and mortgage payments on a space greater than our rented apartment would cost us less than our rent. More importantly, we wanted to buy so that we could have a garden and a dog. Seriously, those are the biggest reasons we bought. There turned out to be other benefits to ownership, but garden and dog was enough.

Equity was never a motivator in the purchase. In our minds, equity would have almost no value to us until we sold the house. We bought before so many lenders started encouraging people to "cash out" on their equity. In fact, in my mind, a second mortgage and often a refinance was something done by desperate people. My understanding of equity was formed before the years of ungodly rate of increase in house prices. We did not buy a house just to have something of monetary value.

[mrsmoneysaver]

I pay a little over $500 per month to pay off our debt. We only have two more payments on the treadmill we purchased last Christmas (NO Christmas debt this year!!), so I'm looking forward to that. We should have all of our consumer debt paid off by the end of 2011.

[maat55]

Mortgage only, we elect to put more towards retirement than early mortgage payoff.

[Seeker]

I might be on minority side, but I dont understand why majority of us think that buying a house is must? I read a lot of posts by you and I agree with you when you say a person should buy house for living and not for investment, but both of us know what majority of us are doing? I bet 'lets create equity in our own house rather than wasting money in rent' is the biggest factor motivating people in buying house(borrowing a large sum in the name of mortgage).

I guess I don't really understand how buying a house is not a must?

If a person is not stable in their career or does not desire "permanance" or "stability" and would rather lead a mobile life, then there's no reason to buy a house.

If a person is looking at rental costs of 1k/month and a mortage situation inclusive of taxes/insurance etc. not quite as costly, why would they not consider buying long term.

I understand what you are saying Hector, but depending on a whole bunch of environmental factors that are rather individualistic traits and a combination of choices we make about career, location/enjoyment, and ultimately family (apart from the growing up kind, when we go off and make our own lives), these determine whether or not to buy.

"Wasting money in rent" is a common view, but it is also a valid one. At the end of home ownership, you have an asset that can be sold. At the end of rental, what major asset do you have that can possibly help your heirs?

There are expenses with ownership, but there are also rewards.

The question each individual should be asking themself is "can I really afford this?", "am I really going to be here long enough to make any price payment justifiable?" -- and that answer varies according to location, career, desires, needs, etc.

----

DH and I have 0 debts at this point in time. Our mortgage is 100% paid off, we own our autos; so all we pay are the bills/expenses we incurr, and we pay those off "in full" each and every month.

[ea1776]

Total debt payments = $3800.00 / month (well above minimum payments of $480.00). Goal = Debt Free By End of 2011. All student loan debt. Can't wait for that day. I struggled between letting the debt sit there at an average interest rate of 5% and instead max retirement / savings. But we decided to go ahead and spend a year aggressively zapping the debt. I think a 5% "after-tax return on investment" is pretty good, not to mention how good it will feel to have 0 debt.

[buildmybudget]

Only debt other than mortgage is my undergraduate student loan. But at 2.8% I will only be paying the minimum on this once I'm finished with Masters and off deferral. Since the interest is a tax deduction and I can earn more in the market, I will have this debt for quite a while!

[nick__45]

My definition of debt is spending money you don't have and can't pay off on time. So I have only the mortgage and that is a unavoidable debt.

[ea1776]

My definition of debt is spending money you don't have and can't pay off on time. So I have only the mortgage and that is a unavoidable debt.

Mortgage is avoidable and is debt. Some people can't pay their mortgages on time. Some people are underwater on mortgages. Some people can't understand that a mortgage is not an investment.

[My English Castle]

We have a smallish mortgage left, and we try to pay an extra couple hundred on it each month. I'd love to pay it off, but retirement savings first.

[scfr]

$0
no debt

[greenskeeper]

$0.

We pay the mortgage as scheduled. Will pay it down extra when our retirement is maxed out.

No other debts - never have been.

same here. We are 30 and 31 years old.

Pay double principal payments so our 30yr mortgage should be paid off in 15 years.

[bjl584]

Retirement and investing first. Debt payments second. I currently save around 28% of my income. The rest goes to debt and to maintaining my lifestyle.