Need Financial Advice Home or pay off debt

[Vegas21]

Hi,

I have $56,687.29 in debt. (Car loan $14,852 3% interest rate, Student Loans $41,835 6% Interest Rate) This year I will make around $65,000 after taxes. I am single and my monthly expenses are roughly $2,500.


I live in Las Vegas, Nevada and it seems It's a great time to buy a condo. I want to purchase a foreclosed condo for $60,000 and I have 20% down but have to go through a family friend for the rest. (My credit is bad) He can give me a 10% per year loan. I know I could pay off 52,000 in three years. My rent is $645 a month plus utilities.

Option A. Pay off my car, student debt and keep renting

Option B. Keep paying my monthly minimums and get a condo. My HOA will be $150 a month, property tax $600 yearly interest 4800= $7200 (still cheaper then rent) (Rent is $7760 a year)

What should I do?

p.s No CC DEBT
p.s.s Current Credit score 630

[jIM_Ohio]

Hi,

I have $56,687.29 in debt. (Car loan $14,852 3% interest rate, Student Loans $41,835 6% Interest Rate) This year I will make around $65,000 after taxes. I am single and my monthly expenses are roughly $2,500.


I live in Las Vegas, Nevada and it seems It's a great time to buy a condo. I want to purchase a foreclosed condo for $60,000 and I have 20% down but have to go through a family friend for the rest. (My credit is bad) He can give me a 10% per year loan. I know I could pay off 52,000 in three years. My rent is $645 a month plus utilities.

Option A. Pay off my car, student debt and keep renting

Option B. Keep paying my monthly minimums and get a condo. My HOA will be $150 a month, property tax $600 yearly interest 4800= $7200 (still cheaper then rent) (Rent is $7760 a year)

What should I do?

p.s No CC DEBT
p.s.s Current Credit score 630

Option C skip your brother and look into a land contract for property acquisition.

[riverwed070707]

Hi,

I have $56,687.29 in debt. (Car loan $14,852 3% interest rate, Student Loans $41,835 6% Interest Rate) This year I will make around $65,000 after taxes. I am single and my monthly expenses are roughly $2,500.


I live in Las Vegas, Nevada and it seems It's a great time to buy a condo. I want to purchase a foreclosed condo for $60,000 and I have 20% down but have to go through a family friend for the rest. (My credit is bad) He can give me a 10% per year loan. I know I could pay off 52,000 in three years. My rent is $645 a month plus utilities.

Option A. Pay off my car, student debt and keep renting

Option B. Keep paying my monthly minimums and get a condo. My HOA will be $150 a month, property tax $600 yearly interest 4800= $7200 (still cheaper then rent) (Rent is $7760 a year)

What should I do?

p.s No CC DEBT
p.s.s Current Credit score 630

Defintitely without question Option A. You'd be out of your mind to buy a house with a 10% loan while paying minimums on $60k in debt. You are aware that current mortgage rates are 3-4% right now?? Even if it takes you a couple years to pay off the debt and property values rebound, rates aren't going to be 10%. Not to mention that a foreclosure is likely going to take a lot of money and work and borrowing money from friends and family is always a bad idea. Do things right -- pay down the debt, rebuild your credit score, then start thinking about homes.

[disneysteve]

I have 20% down but have to go through a family friend for the rest. (My credit is bad) He can give me a 10% per year loan. I know I could pay off 52,000 in three years.

How generous of your friend to be your own personal loan shark.

Run away from that offer as fast as you can.

If you are sure you can pay off 52K in 3 years, that means you will have the student loans and most of the car loan paid off in that time while you continue to rent. Hopefully by then your credit will be a lot better and you'll be better positioned to buy a home the normal way.

[Vegas21]

Defintitely without question Option A. You'd be out of your mind to buy a house with a 10% loan while paying minimums on $60k in debt. You are aware that current mortgage rates are 3-4% right now?? Even if it takes you a couple years to pay off the debt and property values rebound, rates aren't going to be 10%. Not to mention that a foreclosure is likely going to take a lot of money and work and borrowing money from friends and family is always a bad idea. Do things right -- pay down the debt, rebuild your credit score, then start thinking about homes.

First off all thank you for your replies. Its great to get people with clear minds to help me with my situation.

My only concern is that the housing market in Las Vegas is rebounding and prices seems very low right now. What do you mean rates are not going to be 10%?

The things that gets me is buying vs renting is still cheaper at a 10% interest rate.

I guess the real question is will owning a condo within three years make me more money then spending 5%(average) on a 60,000 loan. ($3000 year, 3 years= $9,000) or is that to risky?

[disneysteve]

My only concern is that the housing market in Las Vegas is rebounding and prices seems very low right now.

You should never buy a home based on market conditions or interest rates. You should buy when you are financially ready to do so. Right now, you can't qualify for a mortgage. That means you aren't ready to buy.

[Vegas21]

Option B

I went with option B.


I purchased a short sale condo for $57500 from Auction.com during the government shutdown. My friend is a real estate agent and I used her commission to pay for my closing costs.

In the last six months couple condos in the complex sold between $75k to 85k. So hypothetically I made some money, but lets wait and see!

The only thing I need to do is repaint the walls. Everything else works.

I know this is a risky investment with all that debt I have hanging over my head but I would rather own then rent. Especially if it costs me the same. After one month of paying my mortgage it will be cheaper to own etc etc..

I am going to keep paying my minimums and pay $1500 a month and everything I have extra. After 30 something months this bad boy will be mine.


I'm going to make $62000 clean this year. I spend 1900 without my mortgage. I could theoretically put 39,500 towards principle and interest.


Wish me luck! Ill post in six months with an update!

[emanon1501]

I went with option B.


I purchased a short sale condo for $57500 from Auction.com during the government shutdown. My friend is a real estate agent and I used her commission to pay for my closing costs.

In the last six months couple condos in the complex sold between $75k to 85k. So hypothetically I made some money, but lets wait and see!

The only thing I need to do is repaint the walls. Everything else works.

I know this is a risky investment with all that debt I have hanging over my head but I would rather own then rent. Especially if it costs me the same. After one month of paying my mortgage it will be cheaper to own etc etc..

I am going to keep paying my minimums and pay $1500 a month and everything I have extra. After 30 something months this bad boy will be mine.


I'm going to make $62000 clean this year. I spend 1900 without my mortgage. I could theoretically put 39,500 towards principle and interest.


Wish me luck! Ill post in six months with an update!

I think you made the right choice. In a perfect world, you would take care of those debts before you make a big purchase. You are right on the money about market rebounding as I did the same thing. This may never happen again in our lifetime. Short term, you may have made a poor decision. But, in the long term, you made great investment. In the meantime, pay off your car first and then your student loan.

[Petunia 100]

I went with option B.


I purchased a short sale condo for $57500 from Auction.com during the government shutdown. My friend is a real estate agent and I used her commission to pay for my closing costs.

In the last six months couple condos in the complex sold between $75k to 85k. So hypothetically I made some money, but lets wait and see!

The only thing I need to do is repaint the walls. Everything else works.

I know this is a risky investment with all that debt I have hanging over my head but I would rather own then rent. Especially if it costs me the same. After one month of paying my mortgage it will be cheaper to own etc etc..

I am going to keep paying my minimums and pay $1500 a month and everything I have extra. After 30 something months this bad boy will be mine.


I'm going to make $62000 clean this year. I spend 1900 without my mortgage. I could theoretically put 39,500 towards principle and interest.


Wish me luck! Ill post in six months with an update!

So you're working on the mortgage and letting the other debts wait? Are you paying 10%?

[Vegas21]

So you're working on the mortgage and letting the other debts wait? Are you paying 10%?

Yes, I'm paying my minimum payments on my student loans (6%) and car payment (3%) and putting all my extra money towards my mortgage (10%)