Expert: Jessica Bryan - 5/16/2005

Question
Hi,

I've never owned a home and currently rent.  I'm about to move out of my current apt. and into a new one, although I haven't definitely found a new place yet.  I have 18,000 of credit card debt (thanks to boarder/soon to be ex bfriend). I live in NJ and would love to buy a home but am only pre-approved for a mortgage of up to 170,000.  I make 43,000 a year (feels like 10,00 a yr after deductions and bills).  I'm wondering if I should buy a condo for 160,000-ish but I can't afford more than a monthly pmt (including txes, etc) of more than 950.00.  Is it possible or should I continue to rent till get credit card debt down?  Also didn't know if I would be better off moving to NC where my parents live, but NJ is my home with all my friends, etc.  I'm 39 yrs old, too - and being that I work for AT&T there's a good chance I may be laid off this yr since another co. is taking over.

Thx,
Cynthia

Answer
Dear Cynthia;
You have quite a bit of credit card debt that should be paid off before making a house purchase for your own peace of mind.  However, if you feel comfortable in making the monthly payment and if you have some back-up savings that will hold you if you should lose a job, then by all means buy a townhouse.  Money used to buy property is better than money wasted on rent.  There are no write-offs in rent payments while you can write off a great percentage of your monthly payment (that is your interest payment) when you are a home owner.

The cost of living in New Jersey may be a little higher than North Carolina and you might be able to get a place for less money here (I am from NC).  Depending upon the area there are some excellent values in townhomes here.  Housing has not been as affected by the real estate boom as in other areas.  Exploring work possibilities first might make a whole lot of sense.  Also...are you aware of first time buyer government assistance programs?  There is free money to be had in metropolitan areas only.  If you accept a job that pays $40,000 or less, you can qualify.  It might be worth looking in to this as well.  I believe that you can get up to $12,000 for a down payment that doesn't have to be re-paid.  Check with the local government housing authority.  

Being a relocation expert, I am always sensitive to the stress of moving to a new area.  While your parents living here is a plus, having friends and roots in NJ is very important as well.  I suggest you explore your options in NJ first and see if a lender can help you.  Then call an agent in the area to show you some affordable homes at no more than $160,000 with a low interest rate program from the lender.

If you decide to make the move to NC, let me know--I can help you.

Good luck and best wishes.

Jessica Bryan
Managing Broker
House to Home Realty Services
jjbryan01@aol.com
919 272-0699