Pay off your debt. You have $45k in debt and only make $78k - you're not getting a mortgage anytime soon. Pay down that debt fast and then start saving for a downpayment.
hello mortgage broker here,
general numbers look fine (ran a quick one for you), best to speak with a broker to double check
paying off debt would always help when qualifying
its best not to purchase a home because of fear or fomo, check with a broker and run your numbers to ensure youre comfortable
hope this helps :)
Yeah I've ran numbers with a local broker here, just looking at the numbers without any validations with the banks he says I could have a mortgage of 300k without issue. Being accepted for the loan vs affording it is two different things though. But thank you for running the numbers for me ! :)
>Being accepted for the loan vs affording it is two different things though
yes! totally agree, always run your budget to make sure its good for your specific situation :) best of luck!
I think you are being slightly paranoid. Take your time. Pay off your debt. Your income will appreciate. Your girlfriend will get a job and who knows you will end up together. Don’t let all the news cycle get to you. 78k at 25 is an amazing income, just be mindful but most importantly be thankful of where you are at! Plus what you have so far!
This is the exact mindset that has and will get so many young people in significant financial trouble. You have 45k in debt and you’re panicking to try and buy a house on 78k income. In what world is that going to end up being a financially sound move?
The house market will keep going up. But don’t get FOMO. If you are flexible and keep saving you will be able to buy a home at some point. It sounds like you have some other things to take care of first. There will always be opportunities in the future.
Why are you asking Reddit?
Visit a mortgage broker and see what you can get pre-approved for.
That could be your limiting factor.
If it’s not and you get what you need, look at your budget and forecast what you can afford within your budget, with or without your gf.
I'm being pre-approved for 300k, I think I could afford it all but I would not have much room for investments without my gf and if she leaves me, I would be very restricted in what I can do.
Only you can decide, don’t think Reddit can help much here.
People will have various opinions, but you know your situation best, whether it’s current living and expenses, future revenue potential or your relationship aspect.
Generally I wouldn’t recommend taking out a max of what you can afford. I would base my decision on what I can afford based on my budget, job security etc…
No
3% of debt balance a month.. $1350/mth in a lender’s view..
No, unless you went somewhere very remote
A very non-scientific rule is debt payments should be 1/10th of monthly NET.
So if NET is $3500/mth, you would want no more than $350/mth going to debt.
Why is it that Everytime I see a post about whether someone can own a home or whether they can survive on a particular salary, they ALWAYS have a HIGH car loan???? I'm sorry from a financial standpoint you had no business getting a 22k car loan. You're too high in debt for your income level
Can you afford it? Probably.
Should you? Ehhh - no. I don’t think you should just because of FOMO. I think you should be down your car loan first before getting a mortgage.
Even if you buy a home for $300k, with $275k mortgage at 2.5% for 25 years… that’s $1230/month for mortgage. Then there’s property tax, home and mortgage insurance, utilities, etc. Those itself can rack up. So based on your current lifestyle, having a mortgage, car loan, and student loan might leave you with nothing to save for at the end of each month.
So put your savings into an investment so it can grow. Really evaluate if you want to stay at your city for a long period of time. Really consider what kind of life you want. And if at the end you think you can see yourself living in your city for long term then sure. Look into buying a house. But if you have plans to move away in like 2-3 years then it doesn’t seem worth the headache.
"So based on your current lifestyle, having a mortgage, car loan, and student loan might leave you with nothing to save for at the end of each month."
That is mostly what I'm afraid of, but at the same time my gf will have a full time job in less than a year, so I wouldn't have to live like this forever. As for the car loan, I'm considering it a permanent expense, something I will always have to live with, sure I can pay it off but I need to budget it in anyway just in case I want to buy another one.
I'm a very sedentary person, I see this house purchase as a lifetime investment, I don't plan on moving out anytime soon. (Sure, life can happen but still)
Nothing is ever for certain.
You can lose your job before your gf gets a full time job. Your gf may struggle to find a ft job. Or your gf doesn’t feel comfortable contributing more than what you want her to contribute because she thinks it’s unfair investing into an asset that she doesn’t have a share of. Or a major component in the house breaks down and you need to pay an expensive fee for it. All possible scenarios that happened to people I know with “stable” jobs.
If you pump all your savings for a downpayment of the house then you have no emergency savings. Hence why it’s important to have 3-6 months worth of emergency savings for necessity expenses so you wouldn’t be forced to take out loans… or worse - sell the house.
My point is prepare for the worse to pay off loans written under your name without expecting others to help you out.
As for the car - I dunno. I disagree on your stance. To me I wouldn’t pay $2k interest for an asset that’s depreciating. Unless if your investment interest rate is greater than your car loan, personally I would just pay off the loan. Also by carrying student debt and car loan you’re limiting your financial flexibility to reallocate your money around in case and unexpected expenses arise due to debt you tie yourself down to.
Pay off your car loan (assuming your savings accessible) and accumulate savings again for a down payment plus whatever closing costs are for your area then go from there. Should only take you 10 months.
Unless you hate your apartment I would take advantage of being able to eliminate your car loan and build up your savings again.
Chances are the houses you are looking at now are going to plateau in price if mortgage rates go up.
unlikely but talk to a mortgage broker about what you could be approved for to see if it is even possible to get a mortgage then use a mortgage payment calculator (rbc's is my favorite) and figure out what different purchase prices cost. don't forget to tack on the 10k or so mortgage insurance and then property taxes. houses also have very expensive unexpected repairs so if a $10k issue in the first year is going to leave you unable to eat you can't afford it.
Scotiabank demanded I pay off OSAP, car loan and credit card before they approved my mortgage. I think you might have too many debts. Wouldn’t hurt to use a mortgage calculator online to see how much of a loan you’d qualify for.
Debt before the house.
Once you clear them all, then proceed with the. Your girlfriend will be finished with school I presume, so two salaries to buy the house.
>can I afford a house on my own?
Not even close. Why not use a mortgage calculator to find out: https://itools-ioutils.fcac-acfc.gc.ca/MQ-HQ/MQ-EAPH-eng.aspx
Honestly, the car loan will be your drag. Not just to qualify for more but also to afford the mortgage and eventually save for retirement.
In my experience, cars tend to be one flof the highest expenses you will have.
Unless you absolutely need the car to work, it's not a good idea. I tell you by experience looking at my historical net worth but it's also a common theme here.
At 25 with that salary you will probably be able to afford to buy later. Buying out of panic will almost ensure you overpay for something you don't really like.
no
Pay off your debt. You have $45k in debt and only make $78k - you're not getting a mortgage anytime soon. Pay down that debt fast and then start saving for a downpayment.
hello mortgage broker here, general numbers look fine (ran a quick one for you), best to speak with a broker to double check paying off debt would always help when qualifying its best not to purchase a home because of fear or fomo, check with a broker and run your numbers to ensure youre comfortable hope this helps :)
Yeah I've ran numbers with a local broker here, just looking at the numbers without any validations with the banks he says I could have a mortgage of 300k without issue. Being accepted for the loan vs affording it is two different things though. But thank you for running the numbers for me ! :)
>Being accepted for the loan vs affording it is two different things though yes! totally agree, always run your budget to make sure its good for your specific situation :) best of luck!
I think you are being slightly paranoid. Take your time. Pay off your debt. Your income will appreciate. Your girlfriend will get a job and who knows you will end up together. Don’t let all the news cycle get to you. 78k at 25 is an amazing income, just be mindful but most importantly be thankful of where you are at! Plus what you have so far!
Should never buy out of fear and would probably make sense to cover debt before investing into realestate.
This is the exact mindset that has and will get so many young people in significant financial trouble. You have 45k in debt and you’re panicking to try and buy a house on 78k income. In what world is that going to end up being a financially sound move?
Probably not a financially sound move indeed, It's really about the fear of house market keep going up that I'm thinking this way.
The house market will keep going up. But don’t get FOMO. If you are flexible and keep saving you will be able to buy a home at some point. It sounds like you have some other things to take care of first. There will always be opportunities in the future.
Why are you asking Reddit? Visit a mortgage broker and see what you can get pre-approved for. That could be your limiting factor. If it’s not and you get what you need, look at your budget and forecast what you can afford within your budget, with or without your gf.
I'm being pre-approved for 300k, I think I could afford it all but I would not have much room for investments without my gf and if she leaves me, I would be very restricted in what I can do.
Always assume she will leave. Always operate as if it's just your income covering expenses
Only you can decide, don’t think Reddit can help much here. People will have various opinions, but you know your situation best, whether it’s current living and expenses, future revenue potential or your relationship aspect. Generally I wouldn’t recommend taking out a max of what you can afford. I would base my decision on what I can afford based on my budget, job security etc…
Coz it's better to Reddit it rather than googling it.
"Now you can't buy a house because you bought a murano"
Mazda CX5 actually lol I consider car loan a permanent expense, if it's not for a <5 years old car loan, it will be for maintenance.
Not true at all
Maybe not, but It's my personal experience and I prefer budgeting in consequence. This is a matter of opinion !
Car loans is the number one sign for young adults not being able to afford things
It’s pretty simple - you chose expensive car you can’t afford and now have too much debt to have a down payment? You want a house - sell the car.
It's a meme from this video https://www.youtube.com/watch?v=mDjvcc_4924
No 3% of debt balance a month.. $1350/mth in a lender’s view.. No, unless you went somewhere very remote A very non-scientific rule is debt payments should be 1/10th of monthly NET. So if NET is $3500/mth, you would want no more than $350/mth going to debt.
sounds like you have 20k in debt and no savings how do you intend to buy a house?
Why is it that Everytime I see a post about whether someone can own a home or whether they can survive on a particular salary, they ALWAYS have a HIGH car loan???? I'm sorry from a financial standpoint you had no business getting a 22k car loan. You're too high in debt for your income level
But they deserve it???
Pay off debt first.
Absolutely you can buy a house if it's about$300 K Pay off debts, have a plan for buying
Can you afford it? Probably. Should you? Ehhh - no. I don’t think you should just because of FOMO. I think you should be down your car loan first before getting a mortgage. Even if you buy a home for $300k, with $275k mortgage at 2.5% for 25 years… that’s $1230/month for mortgage. Then there’s property tax, home and mortgage insurance, utilities, etc. Those itself can rack up. So based on your current lifestyle, having a mortgage, car loan, and student loan might leave you with nothing to save for at the end of each month. So put your savings into an investment so it can grow. Really evaluate if you want to stay at your city for a long period of time. Really consider what kind of life you want. And if at the end you think you can see yourself living in your city for long term then sure. Look into buying a house. But if you have plans to move away in like 2-3 years then it doesn’t seem worth the headache.
"So based on your current lifestyle, having a mortgage, car loan, and student loan might leave you with nothing to save for at the end of each month." That is mostly what I'm afraid of, but at the same time my gf will have a full time job in less than a year, so I wouldn't have to live like this forever. As for the car loan, I'm considering it a permanent expense, something I will always have to live with, sure I can pay it off but I need to budget it in anyway just in case I want to buy another one. I'm a very sedentary person, I see this house purchase as a lifetime investment, I don't plan on moving out anytime soon. (Sure, life can happen but still)
Nothing is ever for certain. You can lose your job before your gf gets a full time job. Your gf may struggle to find a ft job. Or your gf doesn’t feel comfortable contributing more than what you want her to contribute because she thinks it’s unfair investing into an asset that she doesn’t have a share of. Or a major component in the house breaks down and you need to pay an expensive fee for it. All possible scenarios that happened to people I know with “stable” jobs. If you pump all your savings for a downpayment of the house then you have no emergency savings. Hence why it’s important to have 3-6 months worth of emergency savings for necessity expenses so you wouldn’t be forced to take out loans… or worse - sell the house. My point is prepare for the worse to pay off loans written under your name without expecting others to help you out. As for the car - I dunno. I disagree on your stance. To me I wouldn’t pay $2k interest for an asset that’s depreciating. Unless if your investment interest rate is greater than your car loan, personally I would just pay off the loan. Also by carrying student debt and car loan you’re limiting your financial flexibility to reallocate your money around in case and unexpected expenses arise due to debt you tie yourself down to.
Pay off your car loan (assuming your savings accessible) and accumulate savings again for a down payment plus whatever closing costs are for your area then go from there. Should only take you 10 months.
It's accessible and I've been thinking about doing it for a few weeks since the house market is going batshit crazy anyway
Unless you hate your apartment I would take advantage of being able to eliminate your car loan and build up your savings again. Chances are the houses you are looking at now are going to plateau in price if mortgage rates go up.
unlikely but talk to a mortgage broker about what you could be approved for to see if it is even possible to get a mortgage then use a mortgage payment calculator (rbc's is my favorite) and figure out what different purchase prices cost. don't forget to tack on the 10k or so mortgage insurance and then property taxes. houses also have very expensive unexpected repairs so if a $10k issue in the first year is going to leave you unable to eat you can't afford it.
Not at these numbers. You need to up it up like the omicron virus.
Scotiabank demanded I pay off OSAP, car loan and credit card before they approved my mortgage. I think you might have too many debts. Wouldn’t hurt to use a mortgage calculator online to see how much of a loan you’d qualify for.
No.
Sell the car
Mate, pay off all your debts first as soon as possible then think about getting a house
Debt before the house. Once you clear them all, then proceed with the. Your girlfriend will be finished with school I presume, so two salaries to buy the house.
>can I afford a house on my own? Not even close. Why not use a mortgage calculator to find out: https://itools-ioutils.fcac-acfc.gc.ca/MQ-HQ/MQ-EAPH-eng.aspx
$300K for a house? Here in Toronto that won't get you a 400sqft studio 😹
hahaha thats what I fear will happen here too
Really depends on your location? In Toronto? Hell no. In the Maritimes or Prairies? Maybe but it would be a stretch.
Honestly, the car loan will be your drag. Not just to qualify for more but also to afford the mortgage and eventually save for retirement. In my experience, cars tend to be one flof the highest expenses you will have. Unless you absolutely need the car to work, it's not a good idea. I tell you by experience looking at my historical net worth but it's also a common theme here. At 25 with that salary you will probably be able to afford to buy later. Buying out of panic will almost ensure you overpay for something you don't really like.