Arre you car rich and house poor? When you go to qualify for a mortgage the lender will look at how much total debt you have. A large car payment takes a huge chunk out of the amount of money you can borrow for your home purchase.
Back in a past life when I sold cars I was astounded at how much people would spend on a car payment. It was all too common for folks to have 2 car payments that totaled way more than their rent or house payment.
That $600 payment for the truck translates to more or less about $100,000 worth of house. In most markets $100k makes a huge difference in the type of house you can buy. Heck, in some markets you can buy a house with a total payment of $600.
Doug's point is a great one.... Do you plan on living in your truck?
When meeting with a first time buyer, I always make note of the type vehicle they pull up in. No, you cannot judge a person's wealth by the car they drive. I know plenty of wealthy people that drive average, plain jane automobiles.
I do think you can tell a lot about a person's financial maturity based on their car. Too many times I have witnessed entry level buyers pull up in trucks like the one above. One young family earned approximately 45k as a dual income couple. Their truck had more bling than P Diddy!
The only bad thing about bling is the price of admission. In this case the young family was paying over 600 bucks a month for the truck note alone! Remember, they only earn 45k a year!
Guess what this did to their debt ratios?? Instead of looking at a nice move in ready home, fixer uppers were all they could afford. Sadly, the truck has leather but the living room has wood paneling! In a few years that truck will be worth almost nothing. Yet that 600 dollar note will still be due each month. And that living room will still have paneling!
Do you still think that shiny truck is worth the sacrifice?
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