Loans By Kathy

Tips for buying a new car when you also want to buy a house

Tips for buying a new car when you also want to buy a house may sound like an odd title for a blog, but it is subject that needs to be addressed.  In the last week, I have talked with three first time home buyers that are anxious to own their home.

As we discussed income, employment, savings and liabilities a great big red flag went up.  Everything was looking good until we came to the car payment.  In some cases, the car payment was as much as 30% of the gross income.  This leaves very little for a mortgage payment and other debts.

I feel it is my responsibility to set my clients up for success.  There is no way this is going to have a happy ending.  When you want to buy a home you  have to look at the numbers.  The credit score, the monthly income, and the debts.  

Ideally, you want your housing payment to be no more than 30% of your gross income and your debts to be more than 45% including the new housing payment.

As an example, if you make $3000 per month, your total housing payment should be no more than $1000.  This includes principal, interest, taxes, insurance, mortgage insurance (if any) and homeowner's dues.  In this same example, your total debts as outlined above should be no more than $1350.  

That means that new car payment cannot be more than $350 providing there are no other loans or credit card debt.

If you are looking for a car and also want to buy a home, be conservative.  If you don't, the home of your dreams may just turn out to be that new car.

 

 

If you found this blog valuable, please subscribe by clicking the button to the right.  

Signature 

 


 


Kathy Sheehan Senior Loan Officer

P:

770.634.4021

F:

404.745.8060

 

Bay Equity LLC

FacebookTwitterLinkedInApply Now

11475 Great Oaks Way, Suite 350, Alpharetta, GA 30002

800.BAY.3703 Bay Equity LLC NMLS ID#76988


 

 

What to learn more, Google Me!

 

 

The opinions and general information in this blog are soley those of Kathy Sheehan.  Specifics regarding an individual case should be discussed in detail with a loan professional.  For a confidential consultation, please feel free to contact me via phone or email.  All terms and conditions are subject to change.

 

Comment balloon 51 commentsKathy Sheehan • July 28 2013 02:02PM
Tips for buying a new car when you also want to buy a house
share
Tips for buying a new car when you also want to buy a house may sound like an odd title for a blog, but it is subject that needs to be addressed. In the last week, I have talked with three first time home buyers that are anxious to own their… more
Georgia has a new Millionaire - Anita Clark
share
Georgia has a new millionaire! You know her. She is the real estate expert in Warner Robbins and middle Georgia. Anita Clark. I first worked with Anita when we shared a mutual client. From the beginning of the transaction, it was… more
Please Don't Cry Ms Buyer
share
Please don't cry Ms. Buyer, not words that anyone want to say to a client. But on occasion we have to deliver some bad new. Today was one of those days. As the conversation started everything was okay, we started reviewing her… more
I'm Happy Blogging in the Rain
share
I'm Happy Being in the Rain! Oh yes I am! Today was the fourth in a row where there just seems to be more work than hours in the day. I was diligently working on another file when my phone rang. Okay, I will admit I looked… more
Down Payment Assistance for Georgia Home Buyers
share
The GA Dream Homeownership Program is a down payment assistance program sponsored by The Deparment of Community Affairs. It offers either $5000 or $7500 depending on the buyer's qualifications in the form of a silent second… more
Cure for limited inventory
share
There are no shortage of media stories about the limited number of homes available for sale in most markets. Buyers are still plentiful in the market so the question becomes, how do we find them the right home? Well, maybe the cure… more
National Ice Cream Day - July 21, 2013
share
Yesterday I wrote a blog about July being National Ice Cream month. I have enjoyed all of the comments and enthusiasm from readers about all of the reasons to enjoy ice cream and their favorite flavors. What I didn't realize is that… more
Apollo 11 - July 20th a Day in History
share
The date was July 20, 1969. The time was 11:59 p. m. EST. The event, Apollo 11 a NASA mission landed on the moon. During the 1960's following the space program was a national hobby. In May of 1961 President John F. Kennedy declared that by… more
Time to celebrate National Ice Cream Month
share
Time to celebrate National Ice Cream month during the month of July. There is nothing better than a dish of ice cream on a hot summer day so July is the perfect month to celebrate ice cream. I remember family picnics as child when my… more
Puppies in need of home in Woodstock, GA Update
share
I have such good news to share!!! ALL of the puppies have been adopted!!! It is amazing that Linda was able to place these cuties in such a short period of time. The only one left is Momma. She is a lab mix approximately 32 pounds and… more