Should this single new grad with large student loan debt buy a house?

Question

Relocating for a new job which is offerring a substantial sign on bonus and when combined with my new salary all the mortgage calculators say I can spend $2200/mo on housing and that I can be approved for a $150-250K mortgage. I pay $450/mo in consolidated student loan debt ($80K) and have 2 years left of a $352/mo car payment. I have excellent credit and no credit card debt. I'll be moving to an area I'm familiar with as I grew up in a town nearby. Should I buy now or rent for awhile first?

Answer 1

As the name suggests, a student credit card is specially designed for students and is very different from your regular credit card. Because it may be the first time for college students to apply for a credit card, most credit card companies designed their student credit cards to be a form of secured credit cards.

It will help a student to avoid accumulating high amounts of debt because of reckless spending. If you need groceries, or that recommended book but you don't have the money for it, then it may be time for you to use your student credit card. It is good if you start learning good financial habits from your student life itself. Don't use the card to pay for everything and anything. Use it judicially or it will land you in a debt to repay after the college finishes.

It is not unusual to find the representatives of credit card companies promoting student credit card in college campuses. However, finding a right card will take much more than contacting the representative of credit card company. Develop a habit of shopping around and getting the best deal out there. Though the interest rates on student credit cards are relatively low, they also offer a low credit amount. If used judicially student credit card can become the perfect means to build a credit history and jumpstart your financial wellbeing. Read more about it at: http://www.credit-card-gallery.com/article/214,What_everyone_should_know_about_student_credit_cards

Answer 2

Sounds like you've done pretty well so far. You have great credit and only two outstanding loans. You'll be able to get a good interest rate, I would go ahead and buy now. If you are sure you'll be staying in the area, why not? Alot of the time, it's cheaper to buy than rent. Plus its a buyer's market in most places. Don't rely on the mortgage calculators though. When my husband and I bought a house, I tried those mortgage calculators online before seeing a mortgage broker. The calculators said almost twice as much as what we could actually afford. We wrote down all our bills, utilities, groceries, and and other monthly expenses and compared that to our income coming in. Quite a different number. I would see a realtor, they'll be able to help you find a house and see how much you can really afford. Good luck.

Answer 3

I think it depends on how big the sign in bonus would be. If it is enough to cover the car payment then pay the car off, That way you are freeing up $352 a month which can be used for the mortgage payment. $220 a month for housing is an excellent price. To find something for that in rent is nearly impossible. Even the "bad" areas in the city I live in rent is at least $300 a month. Maybe an option is to buy a starter home or a handy man special-which are fairly low priced. Fix it up, get it appraised then you can probably get a second mortgage to pay off the college debt. Then you can pay down on these mortages and sell that house. Take the money you make from the sale and use it for a down payment for the house you want.

Answer 4

Renting first would give you time to find the house you really want without rushing into things and give you time to figure out if you like the job enough to be financially tied to it.