Brand new to the forums, need your opinion!

**b4freedom** · 08-21-2008, 07:52 AM

Congrates on the marriage and the baby!

Let�s start with the car. I see big giant red flags that say, �Run away!� Who will you get a loan from to buy the car? And what are the terms of the loan? Is he going to pay off his loan before he sells it to you? Or is he going to give you the car and let you use it until the loan is paid in full? Keep in mind that you�re dealing with someone that isn�t trustworthy and/or responsible. My evidence to this is the double DWI�s. So, the only deal you want to make with him should be very simple: He hands you a title to a car and you hand him a lump sum payment (preferably cashiers check). Anything else and you�ll see yourself on Judge Judy.

**isiginamo** · 08-21-2008, 08:07 AM

This is what I plan on doing... The private seller owes $10,500, I already talked to my bank.... they offered me 5.25% on 4-5 years for the $7500. He would have to obtain a loan for the remaining $3000 before I would deal. Then my bank will contact his lender, and after he pays the loan down to $7500, my bank would send a cashiers check to the lender not the seller, and would have the title released to my bank to put a lien on it. I hope that makes sense. This is such a hard deal to work with because of all the necessary actions needed, but I think it would be a great car for us that would otherwise cost about $11-12K from a dealership.

**Coleroo** · 08-21-2008, 09:01 AM

you want opinions on the best way to buy it, or do you want opinions on whether you should or not?

If the latter...

I never think it's wise to get into debt when newly married. We made the same mistake when we got married and we're still paying for it 2 years later. And...we just had a baby 3 months ago. Do you know how much babies cost?? I'd suggest saving your money until your cars actually die.

Another thing to consider....why don't you save up the money until you can purchase a $7500 car right out?? Getting a loan more than 3 years on a used car is never good, imho.

**bjl584** · 08-21-2008, 09:01 AM

Be sure to completely check the car over or have it checked over by a professional to make sure that you are actually getting a good deal. At 81K, you may be looking at new tires, brakes, rotors, shocks, and the cost of a general tune up and fluid changes. That is, unless the current owner had all of this done recently. Otherwise, that car could end up costing a lot more than you think. As far as the financial side of things, this deal seems a little too complicated. There are plenty of cars out there with moderate miles in good shape for a good deal. You just have to do some homework and some searching. Unless the cars that you currently own are on their last leg and you need a car now, then I would hold off and try to find something that doesn't require you to jump through so many hoops.

**feh** · 08-21-2008, 09:15 AM

Unless you need a new car (is one of your current cars having mechanical problems?), I suggest not buying it.

Also, 4-5 years is way too long for an auto loan. Three years should be the max. If you can't make those payments, you shouldn't buy. IMO, of course.

**mrpaseo** · 08-21-2008, 09:16 AM

$7,500 @ 5.25% for four years will run you about $173.57 per month.
If you paid an extra $11.43 for a total of your original estimate 185, you will knock off 3 payments and pay it off in 45 months instead of 48.

$7,500 @ 5.25% for five years will run you about $142.39 per month.
If you paid and extra $42.61 for a total of your original estimate of 185, you will knock off 5 payments and have it paid off in 55 months instead of 60.

The way you explained it sould like your bank understands what is going on and they are covering you so I say go for it. If you need any more estimates let me know.

Ray

**b4freedom** · 08-21-2008, 09:20 AM

Although I agree with the other posters that it’d be better to save up and buy the car outright, what you’re planning does work. The bottom line will be that he must pay down the car first and then your bank deals with the his bank with regards to transfer of title and payment. $7500 for 4 years at 5.25% should be ~$174/month.

With that aside, do you have a budget? How do you plan to pay down the cc debt? Have you consolidated the student loan debt? And, what rate are you paying on that? One of your goals is to save for a house. Have you created a plan to achieve this goal? I would suggest you do what my wife and I did for our first house: When we lived in the apartment, we looked at houses and found the one we’d like to buy and then we pretended that we had a mortgage on that house. We took the “pretend mortgage” money and put it into a high interest savings account. When we had accumulated 10% of the value of the house we knew we were ready to buy. However, you have CC debt. So, I would suggest this: Take your “pretend mortgage” payment and apply it to your CC. Once the CC is paid off, plop it into high yield savings account. You’ll also want to create an emergency fund. I define an emergency fund as enough money to cover six months of bills in the event that booth of you lost your jobs or other hardship. The definition varies depending on who you’re talking to. I would argue that you should have an emergency fund before buying a house. With that said, my wife and I did not have one. We saved up one after we purchased our house. But, we did have one by the time we had our first kid. And it was worth it. We had to dip into it many times to take care of unexpected medical bills (insurance found amazing ways not to pay for certain things) and it helped cover a lost salary.

A child will make it much harder to save. Kids are amazingly expensive. Will your wife be a stay at home mom? Or will the kids go to daycare? Have you seen the cost of day care? (Depending on where you live day care can be as much as a mortgage payment.) How will all of this fit into your financial plan?

**mrpaseo** · 08-21-2008, 09:20 AM

$7,500 @ 5.25% for three years will be $225.62 per month to be paid off in 36 months.

Round that out to an even $250 dollars per month and you can chop it down to 33 payments with the last payment being about $57.26.

Ray

**mrpaseo** · 08-21-2008, 09:37 AM

Please watch this video before you purchase, if you do decide to purchase, still watch this video and apply the practice if you can for the future. Once you have enough saved, you will have free vehicles for the rest of your life...

Watch: Drive Free, Retire Rich

Ray

**isiginamo** · 08-21-2008, 09:45 AM

One of our cars is a lexus (toyota made), so it has alot of life left in it. The other is a 95 sunfire 2 door. It has 154000 miles, and it is hard starting in winter. In Iowa we have -20 days! I'm just thinking with the high miles, and only a 2 door, it would be a little tough with a new baby. The only thing in my favor is if I buy it way below book, if I ever needed to sell it because of a hardship it would sell pretty easily for what I owe.

**isiginamo** · 08-21-2008, 10:01 AM

We have Gazzelle intensity right now. If any of you have looked into Dave Ramsey's Total Money Makeover... thats what we are working on.

-We have $1000 emergancy fund now-- With about another 2000 sitting in checking
-we are paying off credit cards with the debt snowball, we estimate within 3 months have those wiped out.
-The Student loans are consolidated and are at 3% interest.
-We live in iowa, so housing is cheap... we are looking at spending about 80K on a house, and hope to secure a 15 year mortgage instead of a 30.
-My wife plans on taking 2 months off and then back to work... we can't live off of just my salary of 40K... she makes about 20K, but is looking for a better job
-We plan on saving about 5% down payment before we buy a house, and then work on a 6 month emergency fund.

**mrpaseo** · 08-21-2008, 10:23 AM

Originally posted by isiginamo View Post

We have Gazzelle intensity right now. If any of you have looked into Dave Ramsey's Total Money Makeover... thats what we are working on.

-We have $1000 emergancy fund now-- With about another 2000 sitting in checking
-we are paying off credit cards with the debt snowball, we estimate within 3 months have those wiped out.
-The Student loans are consolidated and are at 3% interest.
-We live in iowa, so housing is cheap... we are looking at spending about 80K on a house, and hope to secure a 15 year mortgage instead of a 30.
-My wife plans on taking 2 months off and then back to work... we can't live off of just my salary of 40K... she makes about 20K, but is looking for a better job
-We plan on saving about 5% down payment before we buy a house, and then work on a 6 month emergency fund.

You almost got it right, you should fully fund your emergency fund before you purchase yor house

You seem to understand the program and have control of your finances so it's alright to stray a little, just ensure you have enough to cover any emergencies with your new home (Roof leak, water heater etc which will be a little more than your 1000 EF.

Great job, and good luck,
Ray

**mrpaseo** · 08-21-2008, 10:27 AM

BTW Daves Program looks like this:

Step 1: $1,000 in an emergency fund

Step 2: Pay off al debt with the snowball plan

Step 3: 3-6 months of expenses in savings

Step 4: Invest 15% of income for retirement

Step 5: College funding

Step 6: Pay off your home early

Step 7: Build Wealth and give.

It's a great program, like I mentiond in thelast post sometimes it makes sense to deviate a little from this "Guideline" just be sure you cover your six before you jump tracks.

Ray

**maat55** · 08-21-2008, 07:01 PM

Originally posted by feh View Post

Unless you need a new car (is one of your current cars having mechanical problems?), I suggest not buying it.

Also, 4-5 years is way too long for an auto loan. Three years should be the max. If you can't make those payments, you shouldn't buy. IMO, of course.

I second this advice.

Brand new to the forums, need your opinion!