Hello /r/personalfinance,
I have come here wanting help because I am conflicted about what exactly I should or want to do when concerning purchasing a home or continue renting. I have many options, but this all seems overwhelming to me. Even when I read more into it, what I think is appropriate conflicts and I am still unsure what to do. I really would appreciate any input or advice...
Personal Financial Situation:
I work and live in a relatively low cost of living area in Virginia as a system administrator. By myself, I make around $50K a year, have a $235/month 0% interest car loan, have a FICO score of around 700-720, and have no revolving credit card balance. I also have some relatively small student loans, around $10K, that if everything goes as planned I will have to start paying back sometime in 2019 and have a bachelors degree. The student loans are mostly subsidized and around 4% interest as well. Also, to note, I have about $5K set aside in savings.
Girlfriend's Situation:
My girlfriend, or essentially fiancée at this point, just graduated last May and has quite a bit of student loans ($100K). Thankfully, half of those loans are in her parents name and they are paying that half. It still comes down her paying $400 a month for her loans compared to her only bringing in 25K a year, but expected to ramp up as she is being grossly underpaid for her compliance work. Her credit score is similar to mine and she has no car payment or other debt aside from student loans.
Combined Situation:
Combined, we currently pay $960 a month for rent, excluding utilities. In this area, that is considered on the higher end; however, when looking at the more affordable options, around $700 a month, they are in considerably worse areas of town. Our income combined as well, assuming neither of us get a raise, is around $75K a year, which is right at the threshold for 0% down for a USDA loan, which I will ask about later in the post.
Options we are considering:
With everything considered, we have a lot of options and we keep hearing different things concerning what may be the best of those options. Any input or other advice would be appreciated, but here are the options we are looking at:
1) Staying where we are at and try to save. Unfortunately, though, with rent being $960 a month, it doesn't leave my girlfriend a lot of wiggle room for saving, but puts me in a situation to continue saving.
2) Find a cheaper apartment and save. This really depends on how long it would be financially viable it would be for us to move and live elsewhere. The biggest problem is the cheaper areas are questionable with more crime. Albeit, still an option.
3) Get a mortgage and buy a home. In our area, we have some decent options for around $120K to $170K. The lower end of the spectrum would put monthly payments lower than rent by $100 or so, depending on the loan. The higher end would put it about the same price as rent. USDA may be an option for some areas, but FHA for others.
4) Have a modular (pre-fab) home built on land using a company that provides turnkey service. Through this option, the total cost looks like it would be around $140-$150K, when you add in the land as well. Some of the land is available with options that would qualify for USDA.
Again, I am really at a loss at what the best option would be. I have some family members saying we are better off saving and others hounding us for "throwing away" money renting. I can see both sides of the argument. One benefit we could see with USDA in our current situation is we would be right at the threshold for the area to qualify for 0% down, until either of us get a raise. I really just don't know and this whole situation is stressing me out...
Submitted November 14, 2017 at 09:58AM by Mildly_Uninteresting http://ift.tt/2iVUQ7U
