What would you do?

[shepav]

My dh and I sold a house a 18 months ago at a loss of $10000. Since then we have been able to save up $16000 by living in a really cheap two bedroom rental (we also have a daughter). I recently started working a couple of months ago, but we just found out we are preggo again, so I'm not sure if I'll continue working after baby is born or not.

Anyway, we're starting to think of buying, since we have another baby on the way. Right now my dh makes $60000/year, and brings home $3235/month after taxes and 401k is taken out. The only other debt we have is my $175/month student loan, and I owe $15000 on that.

What is a doable mortgage for us? We found a place that would cost $700 month (not including taxes or utilities, of course). Does this sound reasonable?

We're in a super cheap place with all utilities included, so I'm not sure this is the time to buy or hang tight a little while longer.

[jIM_Ohio]

$700/month sounds reasonable.

What are the costs of insurance, taxes, utlities and other household bills? Yard maintainance?

I would look at expenses as a whole before making decision on maximum amount to spend. $700 is reasonable though.

[kork13]

I agree, $700/mo sounds quite do-able, but of course depends on where you are, and what those other expenses would be. How large is the place, and what are you paying for rent? What would rent be for a place similar in size to the home?

I ask all that just to help you highlight perspective... I mean, for $700, I would be hard-pressed to find an apartment here where I am, not including utilities (another $150 or so). Admittedly, Panama City, FL is a bit more expensive as for COL, but even still.... Basically, if your house payment compares well with what it would cost to rent a similar place, I would say it would be very well worth it, because over the long term, you can pay rent or a mortgage, but to buy you'll end up owning the home.

One last note... It's good to be aware of what your payment will be, but remember that what's really important are the mortgage terms themselves--amount, rate, and term. By focusing on those and keeping those as low as possible, your payment will stay low.

[boosami]

We found a place that would cost $700 month (not including taxes or utilities, of course).

$700 for a rental, or $700 mortgage payment?

[KGeary]

My dh and I sold a house a 18 months ago at a loss of $10000. Since then we have been able to save up $16000 by living in a really cheap two bedroom rental (we also have a daughter). I recently started working a couple of months ago, but we just found out we are preggo again, so I'm not sure if I'll continue working after baby is born or not.

Anyway, we're starting to think of buying, since we have another baby on the way. Right now my dh makes $60000/year, and brings home $3235/month after taxes and 401k is taken out. The only other debt we have is my $175/month student loan, and I owe $15000 on that.

What is a doable mortgage for us? We found a place that would cost $700 month (not including taxes or utilities, of course). Does this sound reasonable?

We're in a super cheap place with all utilities included, so I'm not sure this is the time to buy or hang tight a little while longer.

Pay off the student loan NOW and stay in the super cheap place you're in while you build up your savings for a down payment on a new home. Be debt free first and then be a home owner.

[maat55]

700 is great. You should live on a tight budget for awhile. Make sure you have your EF in place before you buy. You might consider lowering your 401k to the match to build EF and reduce SL.

[Well Spent]

Pay off the student loan NOW and stay in the super cheap place you're in while you build up your savings for a down payment on a new home. Be debt free first and then be a home owner.

I agree. Why hang onto debt when you have the cash to wipe the slate clean? Then you'd still have $1,000 for an emergency fund.