There are some good deals being offered on the purchase of a new car right now and there are great deals on homes and condos in the Salt Lake City metro area.
I just recently paid off a car loan and I was thinking about how much home a buyer could afford if they didn’t have that car payment. So I ran some number and here’s what I came up with:
Loan Amt. Interest Rate Term/Years Monthly Payment
$10,000 5% 4 $230
$20,000 5% 4 $460
$30,000 5% 4 $690
Loan Amt* Interest Rate Term/Years Monthly Payment
$42,845 5% 30 $230
$85,690 5% 30 $460
$128,534 5% 30 $690
Isn’t that crazy! For the price of a $30,000 car, you could afford $128,534 towards a mortgage on a Salt Lake City home or condo. Most of us need reliable transportation, but if you’re thinking about buying a house or a condo in the next couple years, I’d put the brakes on the new car purchase until after you get your home.
It’s much easier to get approved for a car loan than a home loan and if you buy the car it could spoil your chances for a home because when a lender pre-approves your for a home loan, they do so based upon a ratio of your income compared to the monthly payments on you current debt. Buy the house first!
If you need help with the purchase of a Salt Lake City home, condo or duplex, please contact me. I’m an experienced Salt Lake City realtor and the majority of my clients are buyers of Salt Lake City homes and condos.
Associate Broker, MBA
SLCHomes Real Estate
*Home loan amount is principle and interest only and does not include Property tax or home owners insurance.