Quote:
Originally Posted by Run Silent
You should immediately pay off the car. Having a loan on a 7 year old car is ridiculous.
The number one way to building wealth is to not have any debt (with exception of a home).
You should absolutely buy a home, but only if you can meet the following criteria. If you cannot meet ALL of the items below, continue to rent until you do so:
1) A down payment of a minimum of 20% of the cost of the home. No PMI.
2) A payment that is no more than 25% of your total take home pay.
3) A fixed rate mortgage for a maximum term of 15 years.
4) You plan on living there for at least 5 years.
So long as you can meet all four of those items...and.... you don't have any other debt of any kind - buy the home.
Otherwise, wait.
EDIT: I see you live in a relatively high cost of living area. This doesn't change anything I just said. Simply living in an area that is expensive does not give you a pass on basic math.
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Based on that I shouldn't have bought (built) my new home - I failed #3. I just checked and I could meet #3 without blowing the rest, I'm just not sure I want to, nor am I sure it would make sense in my situation (I'm not "working for a living" expecting the house to be my retirement).