: Time to buy a house.....and sell a Cadillac



90Brougham350
10-12-08, 06:47 PM
My 1994 FWB is a wonderful car to drive, and admire. With that said, I can no longer afford to keep her around. My wife Ruthie and I have decided that if we were ever to buy a house, now would be the time. Unfortunately, with our monthly bills and a decently tight budget, we'll never have enough cash saved for a downpayment by the end of January or February. So the Fleetwood has to go. We're looking at getting an early-mid 90's GMC or Ford pickup. Chad has been a big help already, he let me test-drive that GMC with the 454 he did a review on in the Lounge. I've also test-drove a 1991 F-250 with the 5.8 liter and 5-speed.

I'll be perfectly honest, getting out of both trucks after the test drive and back into the FWB, I almost cried, knowing that I would be severely downgrading myself on speed, handling, quality, comfort.....the list goes on. But I will again own a Cadillac someday. Ruthie's '93 SDV is a great car, don't get me wrong, but A, it's her car, and B, it's not quite running the way my Fleetwood is at the moment. After I sold my '90, my participation in the RWD forum dropped considerably, especially after the forums were blocked at work. But I'll still stick around, you guys have been the best help anyone could ask for over the past 3 and a half years. And until I get the SDV running right, I'll be here plenty.

Brian

caddycruiser
10-12-08, 07:56 PM
Explain more why keeping a paid for older Cadillac with a dead reliable drivetrain around is more expensive (or something) than driving a truck of the same or older vintage, but that's more thirsty?

90Brougham350
10-12-08, 10:23 PM
Because I can sell the Caddy for a couple grand more than I can pick up an old pickup, and because I currently have a 2.8 mile commute to work, soon to be 2.5 (after the new bridge over the interstate is done).

Brian

codewize
10-13-08, 08:29 AM
I don't think that decision makes sense at all. So you're ditching the Brougham for a couple grand, never to be seen again so you can drive a old Ford pickup?

That's silly. You'll spend the profit in fuel over the next year, but the extra expense will be ongoing on top of your new mortgage.

I'm not saying this because it's a Cadillac thing but I really do think that's a very foolish choice. If you want to make money on the front end you need to save it on the back end as well or else there's no point.

Cutting back is the way to save money, not selling something that's paid for only to buy something else that's paid for but costs more to own. :hmm:

If you need cash that badly maybe you're not ready to buy a home.

Now if you're going to continue executing this plan, give me a chance at the Brougham.

96Fleetwood
10-13-08, 09:21 AM
A couple grand isn't going to touch a downpayment for a mortgage nowadays. Banks are hardly giving anyone mortgages unless you can come up with $10-20K as a downpayment, they are scared to give their money right now. I had to put my CTS-V fund as downpayment on our house, but it was worth it.

Just save up a little longer to buy is my opinion. It is not like these cars are unreliable or have crazy insurance rates.

Best of luck to you and your wife!

Superjim
10-13-08, 10:09 AM
Sounds like you are getting in too big of a hurry to buy a house.

If your budget is that tight, and you have to sell the car that you love, just to raise a couple of grand... you are not financially ready to buy a house.

You are still fairly young and you have plenty of time to save a little more money and do it right.

You really need to save money for a little bit longer and have a decent cushion, money wise, when you buy a house. Over and above the down payment and closing costs. And a lot of times, even that, (down payment and closing costs) is more than they estimate.

There will be a million things you need to spend money on when you first get the new house, that you don't even think about or know about now and if you are too strapped for cash... the house will turn into a curse instead of the happy blessing for you that it should be.

If you buy a house when you are JUST BARELY able to make the down payment, and have no money left for a fall back cushion, I can almost guarantee that Murphy and his three cousins, Broke, Desperate and Stupid, will move into your spare bedroom. :) :)

I know... I have been there and done that. More than once. (I learn slow) :)

I know you didn't ask for my advice... but I hate to see you make a big mistake by getting in to big of a hurry and not preparing yourself well for this big step in your life.

It won't take much longer to save a a little more and you will be so much happier when you do buy the house.

When you are basically broke... when something happens and you need money... it is a major catastrophe, money wise. That will make you do dumb things. :)

When you have a few bucks in the bank... and the same things happens... it is just a big inconvenience... not a major deal.


Texas Jim

urbanski
10-13-08, 10:15 AM
^^^there ya go

Cadillacboy
10-13-08, 10:56 AM
Best of luck w/ your decision but I think keeping Fleetwood should be more sensible action

Old Fleetwood
10-13-08, 11:54 AM
Brian, FWIW, I was nearly ten years older than you when wife and I bought our first home and, as a safety engineer for an insurance company, I had done appraisals for houses and even factories. Yet, within two years of moving in after we bought, the damn boiler went south at no small expense:alchi: and a whole host of other little goodies popped up that even a sharp "home inspector" could not have caught.
Take your time and enjoy your ride while you build up your cash reserve, especially considering how the stock market and real estate market had recently tanked.
There will be some very amazing offers to consider within the next few years as you accumulate your nest egg.
Patience is a virtue, especially in troubled financial times.

dirt_cheap_fleetwood
10-13-08, 01:01 PM
SuperJim could not have said it better. You will also have to buy funriture, silverware, a microwave, sheets, beds, matresses, drapes, lightbulbs, possibly a fridge, a washer and drier and the list goes on and on. Just save up for a little while longer and don't be too hasty to get moved in. If you are currently in a good position where you can afford to live and save up for the house at the same time, why be hasty to move out?

90Brougham350
10-13-08, 06:23 PM
I appreciate the advice everyone. But the only thing that bothers me is that the Fleetwood has never seen salt or snow, it's pretty much mint underneath and above. Not a single ounce of rust around the door hinges, on the bottoms of the doors, coming through the bumpers, anywhere! And as good as Ziebart is, I feel like I owe it to Cadillac not to let one more example of their finest work to start rotting away due to salt and winter. I hate to do that to the car when it's made it 14 years without.

Brian

I~LUV~Caddys8792
10-13-08, 07:24 PM
And if you do buy a house......be sure that it's got a 3rd stall for a certain friend's certain 1973 Lincoln Continental Mark IV......:sneaky:

I'm sure whatever reasoning Brian and Ruthie have behind their move is perfectly logical, and their timing in a way is good...because houses aren't selling for many reasons, one of them being it's a buyer's market....more buyers than sellers...atleast in our area, so it's not gonna take a LOT of time to find a decent place at a decent price.....

....provided you have a great Realtor..... :sneaky:

codewize
10-13-08, 10:35 PM
I think there's a lot of excellent advice here. Some well seasoned home owners who all speak the truth. Going from rent to home ownership is a HUGE step, one that you can ever be totally prepared for.

You'll be amazed at all the additional expenses that you never thought about.

As a general rule of thumb you should be able to have at least 3 months mortgage in the bank at all times to fall back on

Part of the reason banks want a down payment is to show that you earn enough money that you can afford the home you're buying. If you make enough that you can save 10% then you can probably make the payments. If you're struggling for the down payment then you really can't afford the home.

Same goes for a car. The general rule of thumb there is you should only buy as much car as you can pay off in 36 months. If you take more than a 36 month note on a car, you're considered over extending yourself.

However, like I said If you're getting rid of the Brougham, let me know.

ejguillot
10-13-08, 10:43 PM
90Brougham350,

Superjim is right. Also, consider if you would have met the criteria for getting a mortgage 25 years ago:

a 20% down payment (less if FHA, more if you're self employed),
6 months income saved (besides the down payment) and documented to prove you saved the money from income (not as a gift),
a fixed rate normal mortgage (30 year loan) with a monthly payment that is not more than a third of your monthly income,
and a solid credit history.

If you can't meet these criteria, you may want to save more before you try to buy a house.

Also, consider this: Real estate prices throughout most of the country are flat as best, falling with no end in sight at worse. Here's one criteria to determine if the house you're interested in has reached what I would consider a bottom:

Given a purchase price X, will the cost of owning the house (mortgage payment, taxes, insurance, HOA fees, maintenance, etc.) be less or equal to renting the same house? Alternatively, think of it this way: Could you rent the house for enough to cover your expenses at the purchase price you're looking at? If the answer to those questions is yes, I believe the house you're looking at would be a wise purchase. Otherwise, reconsider your haste.

gdwriter
10-14-08, 01:57 AM
Brian, add me to those who advise against selling the Fleetwood. Not just because it's a mint-condition car that's becoming increasingly hard to find. But I also doubt you're going to net enough in the exchange to make it worth your while.

With any used car, especially in the $1,500-$2,000 range, you're looking at spending another $500 to $1,000 in repairs and deferred maintenance. If you're asking $4,000 for the FWB, you'll only net $1,500-$2,000 after you buy a beater truck and take care of repairs. That's next to nothing when you're looking at a down payment on a house, plus another few thousand in closing costs.

Look at it this way, you've had the FWB for several months now; you've taken care of the maintenance issues, and you have a pretty good idea of what might break or need attention in the near future. It's in excellent condition mechanically and cosmetically. So why sell a car you know and like for the unknown, especially when the net proceeds aren't all that much?

I can certainly understand the desire to buy a house. I felt the same way, and I hated paying rent. I think it will remain a buyers' market for the next year or two, which certainly give you enough time to save up what you'd net for selling the Fleetwood and replacing it with some beater truck.

If your commute to work is that short, I wouldn't think road salt would be a huge issue unless they go crazy with it where you are. Is public transit or car pooling an option to avoid exposing the car to salt?

Ultimately, it's your business and your decision, but having owned several cars and a couple of houses (not at the same time), I'm hoping the voice of experience can help you and Ruthie out.

BTW, how is she liking the DeVille?

znichols81
10-14-08, 07:21 PM
Well, I'm pretty new here and I don't want to be the new guy blowing smoke out his a$$. I am in the financial services industry and I have seen firsthand lending criteria tighten up. I'm not saying that you're not qualified to purchase a home, I am just letting you know that it's much more complicated and costly than it was just a year ago. My wife and I bought our first home two years ago with no down payment and within 6 months, the house went down in value $20k and we were upside down in the house pretty much from the beginning. The things that you don't think about like appliances going out, a water heater, or a leaky pipe will rear its face at a most inopportune time. I can't tell you how many times I had to pass on a goodie for my CDV so that I could fix something on the house. It happens, but that doesn't keep me from getting out on Sundays for a drive with my daughter in the Caddy. (my 3 year old loves riding in the CDV) Like it was mentioned before, most lenders require a 20% down payment these days, with the exception of FHA. From my standpoint, as a banker, a car guy, and a homeowner, I think you can do both. All it takes is a little rearranging of priorities, and you'll be able to enjoy the car, save for the house, and save for yourself. One other thing to keep in mind, is that I don't think we've seen the bottom of real estate prices. I think they will continue to fall over the next year or so, and we'll see the credit market "unfreeze." It's at that point that I think it'll be easier and more cost effective to purchase. Again, not trying to give unsolicited advice, I just wanted you to know about my similar experiences. Best of luck with your decision.

Zach

1990CaddyBrougham
10-15-08, 11:02 PM
I agree with most of the responses.

To sell of a old Cadillac for this reason, the gain in money, its not something that should be done.


Im in a similar boat.
I just turned 20, and would love to buy a house. With the market the way it is, its the best time. But i just got a credit card, so im just starting to build credit.

I have a really nice downpayment, i have been saving for the past few years, and im up close to 40,000. But my monthly income, i wouldnt be able to pay the mortgage, taxes, ect ect....

Im was then looking to get a multi family now, rent both sides out. Continue to live at home, and just let it pay for itself. But in MA atleast, being a land lord is very tricky, and difficult if you dont have good renters.


So im unsure what ill do now.

My_favorite_Brougham
10-16-08, 01:04 AM
So im unsure what ill do now.

Ever thought about starting up a car dealership?

jey
10-16-08, 10:55 AM
I agree with most of the responses.

To sell of a old Cadillac for this reason, the gain in money, its not something that should be done.


Im in a similar boat.
I just turned 20, and would love to buy a house. With the market the way it is, its the best time. But i just got a credit card, so im just starting to build credit.

I have a really nice downpayment, i have been saving for the past few years, and im up close to 40,000. But my monthly income, i wouldnt be able to pay the mortgage, taxes, ect ect....

Im was then looking to get a multi family now, rent both sides out. Continue to live at home, and just let it pay for itself. But in MA atleast, being a land lord is very tricky, and difficult if you dont have good renters.


So im unsure what ill do now.

Yeah if you're living at home and that is working out for everyone, that's the best position to be in. Keep that money you have in an interest-bearing account. The longer you wait, the more money you'll have saved up for a downpayment, and the less your mortgage will be. If you're really ambitious, you can pay cash for a house :)

urbanski
10-16-08, 12:29 PM
100% down rocks

96Fleetwood
10-16-08, 03:28 PM
Ever thought about starting up a car dealership?

I have, and that is how I plan to retire after practicing medicine for 15-20 years (pending the economy turns around in the next two decades).