Should I invest in a condo ~ 350k when I have an unstable job making 40k a year but possible 50k in 1 - 2 years?
Background: Parents: Own a duplex, renting out one unit for ~ $1200, willing to use that to pay for my mortagage. Down payment: 40k Parents willing to loan me this money Personal Savings 40k (Invest in stock / emergency money)
Reason why I want to buy/invest in a condo is because I currently commute 40 miles one way to work. I want to move out of my parent's home. I also want to invest the money I have and eventually upgrade to an even bigger home or perhaps pocket the money. I know this will be a long time from now with the housing market, but atleast I will have an easy commute so I can hold the condo for 5-10 years.
However the greatest fear is risk for me. Even with my parents helping me with 1k of the mortgage I still will need to pay atleast $2000- $2500 dollars per month due to property taxes, insurance, utiilties etc which is more than I make right now, but a few years I expect to get a better job where I will be able to "barely" afford the mortgage.
But of course if I do get a condo I will have no savings, live pay check to pay check to pay the mortagage so really with the given background would you buy a condo or just live at home, commute, find a better paying job and invest in the stock market in the meantime?
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andme2 said:Should I invest in a condo ~ 350k when I have an unstable job making 40k a year but possible 50k in 1 - 2 years?
Background: Parents: Own a duplex, renting out one unit for ~ $1200, willing to use that to pay for my mortagage. Down payment: 40k Parents willing to loan me this money Personal Savings 40k (Invest in stock / emergency money)
Reason why I want to buy/invest in a condo is because I currently commute 40 miles one way to work. I want to move out of my parent's home. I also want to invest the money I have and eventually upgrade to an even bigger home or perhaps pocket the money. I know this will be a long time from now with the housing market, but atleast I will have an easy commute so I can hold the condo for 5-10 years.
However the greatest fear is risk for me. Even with my parents helping me with 1k of the mortgage I still will need to pay atleast $2000- $2500 dollars per month due to property taxes, insurance, utiilties etc which is more than I make right now, but a few years I expect to get a better job where I will be able to "barely" afford the mortgage.
But of course if I do get a condo I will have no savings, live pay check to pay check to pay the mortagage so really with the given background would you buy a condo or just live at home, commute, find a better paying job and invest in the stock market in the meantime?
I think everyone is telling you no. Let's break it down logically.
1) You are going to have a hard time finding a bank that will give you a mortgage (especially in this climate): -- You have 11% down -- Banks don't like you borrowing for your down payment. It may be a different story if your parents gift you the 40K 2) Your mortgage payment is $1858/month. Your income is $2296 after tax (not factoring in states). Your debt to income ratio is: 80%. No lender will lend you that much. The standard DTI number is 28%. 3) You're going to buy a condo at $350K. Depending on the area, that may be over valued. If the market drops 20% over the next 5 years, don't expect to move out.
It's great that your parents would like to subsidize your housing. However, at your income, I don't think you can afford it.
I can only answer this in the manner of Elizabeth Taylor recently answering the "Another Marriage" question on The Soup: "Marrrriaaage? Noooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooo !!!!!
I agree with everyone else, this is a terrible deal. I can only add that this is not an "investment". You are buying a house to live in. If it goes up and you sell it, you'll make a profit, but that's not why you are buying, you are buying because sleeping on the ground is uncomfortable and sometimes it rains.
SO...
You have a 40k a year job, and 40k in savings (not your parents' money). if you want a mortgage that is 40% or less of of your annual income, that's $16k, or $1500 a month. That might get you a mortgage of, say, 180k (6% fixed), and with a 20% (36k) down payment, you could buy a house that costs 216k.
Now, that's a maximum, and I did the math in my head with all sorts of assumptions (Primary among which is your good credit, with little or no debt. You do have good credit and no debt, right?) You should probably try to buy a cheaper house, or rent for a while and save up/solidify your income.
will definitely suck it up and commute and wait and move up to a better paying job and save up. i was merely seeing what u guys had to say. thanks for the feedback.
Don't do it OP, these kinda decisions are what put the country in the current mortgage crisis, especially when people take ARM's and speculate "o well I'll be able to afford it in the future." DO NOT DO IT, or at least find a cheaper place. Regardless, you should wait until 2009-2010 to buy to take advantage of the falling home prices
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