Apologies to the OP for the sidetrack from my side as well, but this is a very interesting discussion for anyone aged 20+! I have tried to have this talk with many a one, and never been able to come to a conclusion so far. Micas sounds very informed so..
The question of paying interest on only a house and not on the car is irrelevant. In my opinion, 0% interest or 3.99% interest or anything is very abstract and borders on the line of marketing even. I'm looking at the fact that I'm buying some car, at some overall price vs. not buying it at all and saving that money for the house.
And so therefore the question is, how much will I benefit if I "save" $20-30k by not buying a car. I have been unable to find a good answer to this because buying a house is so 'fluid' and you talk in 100's of thousands and not in tens. So 10-20-30k more or less on a typical $200,000 first home budget might not make a big difference - is what my perception is.
Again, I'm arguing that if I qualify for $X, don't buy a car, buy a $(X-delta) house (delta off so I don't spend all income on monthly payment), why won't I be able to find a house I am comfortable with for $((X-delta)-$30k). My perception is that I would be able to find this. And that how much am I going to be wasting on interest by stretching to the 30 year instead of the 15 or even 5 year loan.
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