Ack! What to do first???

[JenTwo]

DH and I are expecting a small windfall in the next couple of weeks but we're torn on what to do. We're looking into buying a house right now, possibly even bidding on a house in the next week so we want to save the money. BUT the money is enough to pay off our van and have some left over. It will be one less payment/loan against us but also means less for a down payment (which we don't need if we use the VA loan but want to put something down).

I might add that by the time we would pay the down payment we could have saved up nearly the same amount of $.

[mamabear]

Personally? I'd pay off debt. Right now I'm paying off debt versus putting more down on our mortgage. The monthly payments on the van will be more than the same amount in the house mortgage. You can always prepay the mortgage if you have extra money every month. I personally prefer that...I hate having to write out so many bills every month and we need as much flexibility in our monthly budget and our car loan is at the same interest rate that our mortgage will be. If yours is higher, definitely pay it off...although of course you will pay the car loan off so much faster than the mortgage and probably save interest that way.

But also consider that if you need to show the bank you have the down payment you need to do that shortly after you go to contract. It sounds like you're saying you don't but would like to. Just make sure you have what you need to secure the mortgage.

[JenTwo]

Originally Posted by mamabear

Personally? I'd pay off debt. Right now I'm paying off debt versus putting more down on our mortgage. The monthly payments on the van will be more than the same amount in the house mortgage. You can always prepay the mortgage if you have extra money every month. I personally prefer that...I hate having to write out so many bills every month and we need as much flexibility in our monthly budget and our car loan is at the same interest rate that our mortgage will be. If yours is higher, definitely pay it off...although of course you will pay the car loan off so much faster than the mortgage and probably save interest that way.

But also consider that if you need to show the bank you have the down payment you need to do that shortly after you go to contract. It sounds like you're saying you don't but would like to. Just make sure you have what you need to secure the mortgage.

Well, we put a bid in on a house today. We do have some savings, I just would like more than what we have KWIM? I don't know what is "enough" to secure the loan but I've been assured by OUR realtor (not the realtor of the property we'd like to buy) that it's more than enough for mortgage, DP & closing.

[mamabear]

Congratulations! I hope you get it. I called the bank to prequalify for our loan. They are the ones that know based on your debt to income ratio, what amount of mortgage you qualify for. For example, we have a whomping down payment but we still aren't able to buy a house over $160k or so, because our income is so low.

[JenTwo]

Originally Posted by mamabear

Congratulations! I hope you get it. I called the bank to prequalify for our loan. They are the ones that know based on your debt to income ratio, what amount of mortgage you qualify for. For example, we have a whomping down payment but we still aren't able to buy a house over $160k or so, because our income is so low.

The house isn't expensive in the slightest so it shouldn't be a problem. It just makes me nervous.

It's a tiny house on two acres with a woodshop in Texas. It borders a National Forest (deer, armadillo, alligators, racoons & more!),one of the two neighbors is an Emu Farmer (pond owner), there are two lakes and a pond next to it, the pond is right on the edge of the property line and can be seen from the property. There are oaks heavily scattered across the property and a line of evergreens behind the woodshop. We should hear back from them today since our realtor was talking to the owner's realtor yesterday and he was sure it would be accepted.

We've been going through the house the past few weeks getting rid of things because we knew whatever house we bought would be small but we didn't think it would be quite a small as this one. We're going to have to find new homes for a few more things if we don't want a very tight squeeze.

eta: it also has hardwood floors. I'm thrilled. LOL I figured we would be replacing carpet w/in a few years if we lived in the country.

[Sandi]

My vote is to pay off the vehicle for one basic reason - cars depreciate, houses appreciate. Your home is a positive investment with a good return and the car is a money sucker.

We just paid off our last financed vehicle and it's an AWESOME feeling! The mortgage won't change that much (except maybe having to pay PMI) but not having a carpayment is a GREAT feeling.

[tmrhopkins]

Pay off the car. Then save up for a down payment.

What part of Texas?

I'm in Oklahoma, that will mean shipping things to me that I order from the woodshop will be cheaper!

Good luck on the house!

Tawnya

[mamabear]

Jenni, the house sounds really cool! I'm so excited for you.

I'd love to be "downsizing partners" LOL. Update us to say you've definitely got the house and lmk when you'll be moving in. We're closing end of March but we'll have April and May to fully move in. There are a few things, like sealing the floors and moving an interior wall to make our bedroom smaller and the living room bigger, that we'll need to do before we move in but we should be in by mid-April.

[JenTwo]

Sorry, we've been really busy and I've only managed a few minutes here and there on the pc. I keep meaning to update.

Our bid was accepted and all of the paperwork went through today. We close Mar 15 if all goes as planned. However, I'm not finished with school *here* until mid-May. I will go there in March over spring break and get all of the info, pics, plans I need so I can work on things from here. DH is getting more info on when/if the kids and I can move all of our things before he's officially out of the Marine Corps. The sticky part is where he'll live in the meantime, we're hoping his command will be lenient and allow him a barracks room. We want to hand over the keys to this house on the last of May.

As far as downsizing... wow... it's now a necessity! The kids are getting the master bedroom in the new house, DH and I are getting the small room. Luckily there are many, many cupboards between the bathroom, utility room and kitchen.

It's hard to get DH to let go of things. He says we're starting to look dirt poor. I told him that we sort of are. As I type this I am trying to remove old files from an old pc of ours so that it can also leave... no reason for three computers (no reason for two IMO).

We *have to* paint the small bedroom. It's so very ugly... I know it's not a necessity but I can't begin to describe how ugly the current owners have it painted. The kitchen floors need refinished, something I can do myself. The house needs new paint, the deck new finishing. We'll probably seal windows, doors, etc. to weatherproof before moving in.

Anyhow, I'm chatty, very excited, very nervous.

Tawnya, it's in E. Texas, I'll email you. I don't think we'll be very far from one another.

Thanks for reading my ramblings!

[tmrhopkins]

Congrats!!! How exciting!! If you find some alligators we will have to take a drive to come and see them. My boys are sooooo obessed with alligators right now.

I too agree that painting over something ugly is a "have to." You are going to be living there for a long long time and you will want it to be some place enjoyable and pleasant to stay.

BTW, I'd rather be dirt poor and debt-free and have all sorts of "things" that you can't really afford.

Well, it all sounds very, very exciting for your family. Good luck with all the many changes that lay ahead.

Tawnya