You want a new car and a new home. But now you can’t do both. Which is the first thing to work on, and what is the best investment? Of course, buying a car is cheaper, requires less effort, and it gives off the joyous aroma of a new car, but this is not always the best financial strategy.
If your mind says “car” but your head is “home”, there are some story points that can give your mind the boost you need to catch up:
- New cars deteriorate by about 20% from the first year and then decrease by 10% every year thereafter. House? The value is expected to increase by about 4% every year. The current evaluation rate is 14.5%! translation? Buying a home should be one of the major events in your life. The average car payment in the US is $ 577. Undoubtedly, this type of monthly payment is a significant part of your budget. This can reduce (or stop) your ability to save down payments
- When you buy a car, the housing market will probably change if you are ready to buy a home. Interest rates may rise and it may no longer be in the buyer’s market. If you have a car payment and you miss only one, it can hurt your credit rating and affect your chances of qualifying for a loan. After all, none of us know the future (2020 taught us a lot!).
Last thing! Please ask yourself. What will be the most beneficial in 5 years? Do you drive a car five years ago, or do you plan, save, and rest every night in the house that is now yours?
If you would like to discuss the next steps towards home ownership, please send us a DM. I want to meet you, listen to you, and tell you how I can help you, now or somewhere in the future.
