Financing Help on an M4/M6

[jmg]

Originally Posted by yourcakeisready

Mark - to answer your question as a whole - "yes". Taking on a 30+yr mortgage out on house is just not really "ideal" in my eyes in my position.

Not sure how you are making this conclusion yet again. My house has appreciated 3x your yearly gross in the 5 years I've owned it paying just a little over what a nice apartment is here in Southern California. Granted, I bought at exactly the right time.

[IvanLZ]

Just waste everything on that car and forget about everything else. Who cares about owning a home? having a family? throw that away. M6 will be there for you forever.

[yourcakeisready]

Originally Posted by BayMoWe335

You CAN'T afford a house period, let alone in the 350-400 range, lol.

Thanks Bimmette....iPads....

I legitimately can not tell if you're just trolling at this point, but please piss off and do something better with your time then continually posting on this thread.

Thank you

[BayMoWe335]

Originally Posted by yourcakeisready

I legitimately can not tell if you're just trolling at this point, but please piss off and do something better with your time then continually posting on this thread.

Thank you

That's what's so great....you are so wrong and out of touch that you think Im trolling.

I'm giving you GREAT advice, which you asked for.

How many Wharton grads do you know giving free finance advice?

[bimmette]

I'm pretty sure no one is trolling you. Personally I get very worked up and frustrated when I see these threads. We are genuinely trying to prevent you from making a financial mistake.
I'm all for YOLO and do what makes you happy, but I think when people say that, they mean something a little less drastic like, go have three donuts, go to Vegas for the weekend, hell how about a fun e46 m3 for now? You're sooo young. Please, no one is attacking you. Just stop and think.

[Mr Tonka]

Originally Posted by bimmette

I'm pretty sure no one is trolling you. Personally I get very worked up and frustrated when I see these threads. We are genuinely trying to prevent you from making a financial mistake.
I'm all for YOLO and do what makes you happy, but I think when people say that, they mean something a little less drastic like, go have three donuts, go to Vegas for the weekend, hell how about a fun e46 m3 for now? You're sooo young. Please, no one is attacking you. Just stop and think.

We get about what.... 4 to 6 of these threads each year? They are always the same. People looking for support to justify their desires. Lots of people have more money than sense these days.

[yourcakeisready]

Originally Posted by bimmette

I'm pretty sure no one is trolling you. Personally I get very worked up and frustrated when I see these threads. We are genuinely trying to prevent you from making a financial mistake.
I'm all for YOLO and do what makes you happy, but I think when people say that, they mean something a little less drastic like, go have three donuts, go to Vegas for the weekend, hell how about a fun e46 m3 for now? You're sooo young. Please, no one is attacking you. Just stop and think.

I don't see how me hopping into an older car would necessarily help. I would still be financing 15k if I bought a let's say 2011 M3 assuming the price sold is 30k

[BayMoWe335]

Originally Posted by yourcakeisready

I don't see how me hopping into an older car would necessarily help. I would still be financing 15k if I bought a let's say 2011 M3 assuming the price sold is 30k

You don't see how financing $15k is better than financing $30k? Man, you've got work to do.

She's absolutely right. Downsize your purchase. Every dollar is precious for you, so getting something for half the money would be a huge Step in the right direction.

In your situation, I'd drive a beater and pay off the debt first. Then I'd do something about my living situation and start saving/investing for the future. You have enough income to save a lot and still have some fun. The car is just too big a % of your income.

I could buy a Veyron in cash, but ability to buy something doesn't mean you can afford it. Technically, the bank is buying your car.

[jmg]

Originally Posted by yourcakeisready

I don't see how me hopping into an older car would necessarily help. I would still be financing 15k if I bought a let's say 2011 M3 assuming the price sold is 30k

Let's bring this right back down to what you were asking for in the first place. You asked about the income for M3/4 drivers who financed. Based on my past experience, if I was making $70k I would only spend $35k on a car. Not including down payments and credits. So, can you afford a $60k M4? You decide. Is it more than I would pay with your income? Definitely yes. You want to know the income of the average M3/4 owner who financed their car? WAY more than $70k. Use that information wisely. Again, good luck on your purchase, whatever that may be!

[zx10guy]

This thread is full of win.

Reminds me of a girl I dated when I was in my early to mid twenties. She was also an accountant and had the YOLO attitude. Spend everything now while you're young so you can better appreciate the finer things while you're young. The funny thing was one of her responsibilities at her job was to give 401k lectures to employees of the company she worked for. She told me she didn't believe a lick of what she was preaching.

But I'll throw my 2 cents in. First, I hope as an accountant you realize what the nay sayers are telling you is in your best interest if you sit down and actually work through the numbers. The numbers you've thrown out show a lot of youthful exuberance which has no grounding in reality. I actually got a chuckle when you said you can afford buying a $350-400k house operating on a $90k yearly income.

First, you need to come up with a 20% down payment which means for a $350k house a down payment of $70,000. Then the bank would want you to have at least 3 months of reserves in case you lose your job. So with the current rate of 3.625% for a 30 years fixed mortgage and throwing some rough numbers around to account for property taxes and home owner's insurance, it'll be roughly about $1750 a month. Now going with your debt number of $1500 for student loans, this gives a debt load of $3250 or $9750 you have to show in reserves after you drop the down payment. So this means you have to have almost $80,000 on hand to even think about purchasing a home in the price range you're talking about. Now let's talk about front end and back end ratios. You do qualify with the front end ratio of 23% of your gross monthly for your mortgage payment as 28% is what is considered the max for affordability. Now the back end ratio is your monthly mortgage payment with any monthly debt payments. So it's going to be $1500+$1750=$3250. Dividing $7500 into that number as your gross monthly based off of a $90k per year salary gives a back end ratio of 43%. With the back end ratio 36% is the max number for affordability with all your debts factored in. You've already exceeded 36% with just two debt payments and not even factoring in any car note you would carry. I haven't even talked about utilities, HOA fees, and housing upkeep unless you buy new construction which would keep you out of trouble with maintenance for the first few years of home ownership.

So no, you can't afford a house in the $350 to 400k price range either.

When I was making in the $90k range, I wouldn't even consider buying a car in the price range you're talking about. With my income comfortably in the 6 figures, I didn't buy a car costing more than $20k. The 135i I own now thus far is my first extravagant car purchase. And the only reason I decided to buy one was because of BMW discontinuing the model run and my brush with death with a major medical issue. Otherwise I'd still have my 94 Z28 bought used 17 years ago and my 2006 Focus daily beater.

But it's your money and many times, youth needs to learn the hard way. I know I had some hard lessons with some financial decisions I made in my early 20s. I'm just glad I woke up quickly and got myself on the proper financial path.

[zx10guy]

Some side comments about some posts I've read in this thread.

I don't consider a salary figure real until the first paycheck. Even if it's in writing, it means nothing until you actually get paid as things can happen between the letter and your first paycheck.

The other comment about splurging and doing things now before getting married, to me is just bunk. Yes, there are additional responsibilities you take on. So you can't just do whatever you feel like as if you're single. But marriage doesn't mean you have to be in prison either. People were telling me that once I got married, I can kiss my sport bikes good bye. Well, I've been married 3 years now and I still have my sport bikes. While my wife isn't crazy about me going to the track running around on a motorcycle doing 150+MPH, guess what? I'm still going to the track every year. I also purchased my 135i after getting married too. Wife did voice some concerns about the car not being family friendly but in the end I got what I wanted. We already have a family friendly car with my wife's RDX. My wife knows certain interests I have is what makes me...me. She knows that I'm very financially responsible and wouldn't buy things we couldn't afford. Even though I pay all the bills, I talked to her about the 135i before going out to buy it.

A friend of mine has the same dynamic with his wife. He's into GM F-body cars. The years I kept in touch with him, he would change out cars every couple of years because he wanted something different. Wife didn't beat him up over it as she knows it's his thing and the bills are being paid and they're not being financially stretched.

[walnuttea]

Originally Posted by zx10guy

This thread is full of win.

First, you need to come up with a 20% down payment which means for a $350k house a down payment of $70,000. Then the bank would want you to have at least 3 months of reserves in case you lose your job. So with the current rate of 3.625% for a 30 years fixed mortgage and throwing some rough numbers around to account for property taxes and home owner's insurance, it'll be roughly about $1750 a month. Now going with your debt number of $1500 for student loans, this gives a debt load of $3250 or $9750 you have to show in reserves after you drop the down payment. So this means you have to have almost $80,000 on hand to even think about purchasing a home in the price range you're talking about. Now let's talk about front end and back end ratios. You do qualify with the front end ratio of 23% of your gross monthly for your mortgage payment as 28% is what is considered the max for affordability. Now the back end ratio is your monthly mortgage payment with any monthly debt payments. So it's going to be $1500+$1750=$3250. Dividing $7500 into that number as your gross monthly based off of a $90k per year salary gives a back end ratio of 43%. With the back end ratio 36% is the max number for affordability with all your debts factored in. You've already exceeded 36% with just two debt payments and not even factoring in any car note you would carry. I haven't even talked about utilities, HOA fees, and housing upkeep unless you buy new construction which would keep you out of trouble with maintenance for the first few years of home ownership.

So no, you can't afford a house in the $350 to 400k price range either.

Was literally in the process of writing this exact same post lol. Not trying to be a troll, but a 400K home on a 70K salary with 35K in the bank is a hard no^no. Adding in typical HOAs and utilities you're easily in the $2000+ /mo. You'd have a hard time getting any bank to finance that risk after all the new regulations and "lessons learned" from 2008.

At the end of the day you'll do what you want to do, and there will be a time when you make a decision that you may regret in the future (or hopefully not!). Those are the best life lessons

[FC4]

fuck it bro yolo dont listen to these hataz on the forum. they hate us cuz they aint us. i copp'd my m6 when i was 19 and i still stack fat. i make 17/hr so my checks are like a rack each plus i got a side hustle making another g a month and my payment for da m6 is only $840. my boy got me a sick loan for low intress and i finna get a raise soon too cuz i grind day in an day out.

these haters gonna hate cuz they mad they aint ballin and they not tryna see someone younger wit a sick whip. do you bro fuck tha rest.

peace.

[zx10guy]

Originally Posted by FC4

fuck it bro yolo dont listen to these hataz on the forum. they hate us cuz they aint us. i copp'd my m6 when i was 19 and i still stack fat. i make 17/hr so my checks are like a rack each plus i got a side hustle making another g a month and my payment for da m6 is only $840. my boy got me a sick loan for low intress and i finna get a raise soon too cuz i grind day in an day out.

these haters gonna hate cuz they mad they aint ballin and they not tryna see someone younger wit a sick whip. do you bro fuck tha rest.

peace.

LOL. Did your head hurt from writing all that?

[yourcakeisready]

Originally Posted by walnuttea

Was literally in the process of writing this exact same post lol. Not trying to be a troll, but a 400K home on a 70K salary with 35K in the bank is a hard no^no. Adding in typical HOAs and utilities you're easily in the $2000+ /mo. You'd have a hard time getting any bank to finance that risk after all the new regulations and "lessons learned" from 2008.

At the end of the day you'll do what you want to do, and there will be a time when you make a decision that you may regret in the future (or hopefully not!). Those are the best life lessons

I was going to quote the other guy too, but forgot to hit "+" so I'm only going to quote you lol. The only real basis I was going off of by saying I could "buy" a 350-400k home is due to the lone fact I could have the 20% down payment if I really wanted to sell everything.

I'm looking at 2009-2011 M3's, but it's simply not the same thrill

[yourcakeisready]

Originally Posted by zx10guy

LOL. Did your head hurt from writing all that?

Lmao

[PoorLurker]

Single guy? Wants to impress da bunnies ... Get a used Cayman from Carmax with their Max Care warranty.

Lower cost but you can say you own a Porsche.

If you didn't have school loans, I would tell you 100% Cayman GT4 with your attitude.



yes
yes
yessss

or YASSSSSS (for the young folk)

[BimmerRookie]

Originally Posted by yourcakeisready

I was going to quote the other guy too, but forgot to hit "+" so I'm only going to quote you lol. The only real basis I was going off of by saying I could "buy" a 350-400k home is due to the lone fact I could have the 20% down payment if I really wanted to sell everything.

I'm looking at 2009-2011 M3's, but it's simply not the same thrill

Have you driven an E9X?

[HXS]

"Don't buy an $85,000 car before you buy a house."

- E-40

[tova86]

I feel so poor reading about how much u guys make..

[eluded]

You make $70,000 year and are going to ///M car.

[MaxM3F80]

Originally Posted by PoorLurker

Look at total cost of ownership.
Buy a Cayman GT4 for like $90k.

In 5 years if the market sucks, the car will be around $60k making a loss of $30k which is $6000 per year or $500 per month.

I do not foresee the market for the GT4 going much more below that given naturally aspirated and manual transmission.

Then, the longer you keep the car after it goes to $60K (worst case scenario) the cars value will only increase thereby cutting your losses even more.

If my wife let me buy a fancy car, this is what I would do. I may have to ride my bike to work for the next 10 years as I may lose my shorts speculating on cars, but...

So what is the good way to drive gt4 without losing value