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Paying off Lot loan vs Student Loans
Posted on 9/23/15 at 11:08 am
Posted on 9/23/15 at 11:08 am
Where should the extra money go in this scenario?
Bought a lot (For easy numbers lets say 100k) 10 year term 5.5%, paying extra to be paid off in 5. We will the use the lot as down payment for construction loan (lets say 500k)
Wife and I together have around 55k in student loans, I think avg intr. rate is 6.5% 10 year term.
If we were able to get a construction loan for only 10% down instead of the 20%, would it make more sense to put the extra money towards the student loans vs the lot? I would also assume with the amortization schedule on the lot, after five years we would not be 50% paid off?
Bought a lot (For easy numbers lets say 100k) 10 year term 5.5%, paying extra to be paid off in 5. We will the use the lot as down payment for construction loan (lets say 500k)
Wife and I together have around 55k in student loans, I think avg intr. rate is 6.5% 10 year term.
If we were able to get a construction loan for only 10% down instead of the 20%, would it make more sense to put the extra money towards the student loans vs the lot? I would also assume with the amortization schedule on the lot, after five years we would not be 50% paid off?
Posted on 9/23/15 at 11:46 am to TigerSaint1
Normally, I would say student loans first, but I'm leaning towards paying the lot down. If you can avoid paying PMI, that will more than compensate you for the slightly higher rate.
Unless you plan on going bankrupt, then definitely student loans first.
Unless you plan on going bankrupt, then definitely student loans first.
Posted on 9/23/15 at 12:43 pm to TigerSaint1
Can you refi the student loans to a lower rate? I know I did.
Posted on 9/23/15 at 12:44 pm to TigerSaint1
a lot of ways to look at this, the student loans are not secured and are forgiven if you die, but not under bankruptcy, the lot loan is secured. you may qualify for a student loan interest deduction.
Just some food for thought
Just some food for thought
Posted on 9/23/15 at 1:04 pm to TigerSaint1
With that construction permanent financing scenario you may be up against the Jumbo financing scenario. There it will almost be a certainty that you will need 20% equity in order to do the permanent financing mortgage(post construction).
You could find yourself having to pay a bit out of pocket of your appraisal does not come in good enough.
You could find yourself having to pay a bit out of pocket of your appraisal does not come in good enough.
Posted on 9/23/15 at 3:30 pm to TigerSaint1
Are you able to deduct your student loan interest? Or is your income too high?
I'd see if you can refi your student loans down to a lower rate.
I'd see if you can refi your student loans down to a lower rate.
Posted on 9/23/15 at 4:17 pm to LSUFanHouston
Income to high between the wife and I. Where would be some good places to start to lower interest rates on student loans?
Posted on 9/23/15 at 7:14 pm to TigerSaint1
Sofi.com is one.
A simple google search will probably answer that question.
A simple google search will probably answer that question.
Posted on 9/27/15 at 4:13 pm to Stingray
Check myfedloan.gov for student loan repayment options. A lot of good programs out there that don't get enough publicity.
Posted on 9/28/15 at 7:23 am to TigerSaint1
If you end up using SoFi, you can use my referral link to sign up and get a free 100$.
Sofi is pretty legit, I've been with them since about January and my interest rate went from 6.8 to 4.18.
Sofi is pretty legit, I've been with them since about January and my interest rate went from 6.8 to 4.18.
This post was edited on 9/28/15 at 7:25 am
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