Should I pay off all of my loans before I try to buy a house?
February 26, 2011 5:12 PM Subscribe
I need some house buying help, and advice about whether to pay off my loans now or save more for the down payment.
posted by anonymous to work & money (16 answers total)
I'm 30ish, single, no kids. I earn a good living (~$60K/yr), and while my job is very stable and secure, my income is not likely to increase significantly in the future.
For the past year I have been really, really wanting to buy a house. I clamped down on any extra expenses and have saved about $20k. My retirement accounts are fully funded, and I wouldn't use them to buy the house.
I owe about $5k on a student loan (5% interest) and $12k on a car loan (7% interest). Looking at my savings and those loans, it occurs to me that I could pay them both off today. BUT, then my emergency fund/down payment fund would be severely depleted.
I'm feeling a little paralyzed by this and don't want to make the wrong move. I would appreciate any advice or suggestions. I'm happily renting for now and learning about the housing market in my area. I am very happy in my job and city and will definitely stay at least five years, likely more. No plans to meet or marry anyone or get any kids anytime soon.
Advice? Book recommendations? Ideas? Reassurance?