Starting my life: bought a house, have a job, some investments, what does the future hold?
I,(22 y/o) purchased a 380,000 thousand dollar house in Las Vegas, with my brother (26 y/o). (4.5 miles West, very close to the strip) I make 35 K per year, (opportunity for advancement in my company is high). My brother makes a base salary of 60 K and can hit six figures if he hits his bonuses.
No college payments, own my own car, no other debts minus whatever my monthly CC bill is, always paid in full. I put 6% in my 401(k), so my take-home pay is about 1080 dollars every two weeks.
I didn't want to be renting, but admittedly the house payments are more than I wish I was paying, but I can't go back on that now.
We put 20000 down, have two loans. The first at 304,000 @ 6.25 and the 2nd is 57,000 @ 8.75. It's a 5:1 ARM, and we are 15 months in. Monthly payment is $ 2279.
We both own Wachovia stock, although I do the DRIP bro doesn't apprx 430 shares. I would prefer not to have to sell this for many years.
Any long term advice as far as refinancing, strategy, etc.
Well, the loan officer that did your loan didn't have very good ethics now did they? That's way too much house for your budget. Your car won't live forever, so you can't count on never having a car payment unless you have cash to buy your cars. The monthly payment is more than you make!!! You might want to consider selling the house before you get yourself in a hole you can't dig yourself out of. When you buy a house, the payment should be no more than 36% of your monthly gross income (and unless it is a spouse, or you plan on living with your brother for the rest of your life, you should count on that being 36% of ONE of your income's). Sounds like you got taken. And yes, most loans will let you qualify for up to 50% of your monthly gross income, but that doesn't mean it's a good financial decision to take it out.
Here is my advice on a strategy:
sell that house, buy something in your price range (one you can afford to pay extra on), maybe even consider buying a 2 unit so you can rent out the other side (house pays for itself). The only way to become truly financially established is to have money in the bank, and no debt. The average person will pay over $900,000 in interest payments in a life time! Do you know how much money you would have in 20 years if that money was going into an interest bearing account? With the payments your paying now, you might as well be renting because you won't put much of a dent in that prinicpal balance.
Hope this helps!!
The News Bunker for 2/18/2009