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can not decide please help

Posted on: 11th Dec, 2006 04:40 pm
I am making $3500 and am paying rent of $1200 every month. Mom pays a rent of $700 and lives alone and her earning are about $3000. Will it be a good if I purchase a condo now? What I have figured is that my payments would come around to about $2500, any advice will be really helpful.
If you ask me it would be better for you to wait for some more time. As the monthly payments you will need to make and your low income will make it hard for you to continue.

If this monthly payment of $2500 is not inclusive of insurance and tax payments then it will be even harder. Apart from making the payments you will other expenses as well.

After your income improves a bit you should think of the purchase but not now.

Posted on: 11th Dec, 2006 04:47 pm

Your debt to income ratio should be around 40% but from the details you have provided, to qualify for a loan on your own income you are having a DTI of 70 plus. I too think you should wait for some more time.
Posted on: 11th Dec, 2006 04:54 pm
Hi Lucas,

Whether you should buy or continue renting will depend upon your financial situation and credit status. Buying a home is surely what every individual dreams of achieving in life. And, why not, you get security and you have a home which is an asset. You can in times of emergency take a loan against your home and avoid financial crunch.

When you are staying in a rented house, you are actually paying your landlord. He gets some profit out of it. So, when pay for your home, you are building up an asset. But while renting, you are helping someone else earn profit at the cost of your expense.

That doesn't mean that you should buy even if you cannot manage it financially right now. Think what exactly you want. Is it that you want to change your lifestyle or do you expect your income to go up within a few months, or is it that you will be shifting frequently. It's all about self analyzing to find out if you can go for home buying now and whether you can manage to take a home loan if at all you don't purchase with cash.


Posted on: 11th Dec, 2006 08:45 pm
Your combined incomes are $6200 -- put your Mom on the financing and move forward -- your monthly of $2500 seems very high -- you can manage a $250,000 condo for less than $2000 in an 80/20 purchase loan -- DO IT!
Posted on: 12th Dec, 2006 08:12 am
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