Here's my situation:

25 years old. single. graduate grad school in may. owe 17k to the federal government, with 6.8% interest beginning to accrue 6 months after graduation. owe 80k prom note to my mom for the condo. owe another 40k to my mom for living expenses while in school.

the condo should sell in the 110k range. i can and have rented it out for ~900 a month. The note to my mom is 545 and what i pull each month to keep in an escrow account is around 200, leaving me only 155ish take home.

Clearly I should sell the condo and pay off the prom note and the government loans, right?

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Posted by foshizzle

Washington DC metro

Member since Mar 2008

40599 posts

Posted on 1/21/13 at 5:43 pm to boosiebadazz

You didn't say what interest rate is on the prom note but I personally think it is usually a good idea to pay off debts to family ASAP even if it means taking a financial hit.

That said, it might be reasonable to work out a legal partnership with mom, refinance the condo at today's rates, and everyone wins. Much depends on the details between you and your mom, this is a conversation you should have with her and not with us. Good luck.

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Posted by boosiebadazz

Member since Feb 2008

80390 posts

Posted on 1/21/13 at 5:48 pm to boosiebadazz

6 percent interest (i think) but she only wants her principle back. her and i have a great relationship and this isnt a strain or anything. if i wanted to hold onto it and pay it back over time, she would be ok with that. that money is not pressing to her. i just dont think i'd make enough if i held onto it. condo is also in BR and i am in lafayette and i dont want to play landlord from another city. i also hit my first patch of vacancy and that shite sucks, too. i think the clear move is to get rid of it but i just wanted to get other opinions

This post was edited on 1/21/13 at 5:48 pm

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