- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
Pay off student loans or buy a house
Posted on 11/14/13 at 5:02 pm
Posted on 11/14/13 at 5:02 pm
So,
Like a good person does, my grandmother left an inheritance to her children's children (i.e., me). My wife and I have approx. $50k in student loans and car debt. The inheritance will be about 60k. So, do I pay off all our loans/debt and free up $1,700 a month in debt payments (which will slowly become a down payment towards a house), or do I buy the house now, build equity, but continue to make payments towards debt?
Like a good person does, my grandmother left an inheritance to her children's children (i.e., me). My wife and I have approx. $50k in student loans and car debt. The inheritance will be about 60k. So, do I pay off all our loans/debt and free up $1,700 a month in debt payments (which will slowly become a down payment towards a house), or do I buy the house now, build equity, but continue to make payments towards debt?
13
Posted on 11/14/13 at 5:17 pm to boomtapp
The student loans interest rate is way higher than the current mortgage rates.
I fricking hate my student loans so I would crush them out.
I fricking hate my student loans so I would crush them out.
This post was edited on 11/14/13 at 5:18 pm
Posted on 11/14/13 at 5:22 pm to boomtapp
would you be able to easily afford the new mortgage while also paying the 1700/month for the loans?
its hard to pass on todays mortgage interest rates, but only if you plan to buy a house you really want to stay in....because if you move again in 5 years, who knows what the rates will be like
i would lean towards paying off the debt
its hard to pass on todays mortgage interest rates, but only if you plan to buy a house you really want to stay in....because if you move again in 5 years, who knows what the rates will be like
i would lean towards paying off the debt
Posted on 11/14/13 at 7:00 pm to boomtapp
Spend 50k paying off the debt and put the remaining 10k into your down payment savings fund. Now you can save the rest of the down payment even faster.
And freeing up $1700/month should quickly add to your down payment savings, not slowly as you mentioned. How much are you trying to save?
And freeing up $1700/month should quickly add to your down payment savings, not slowly as you mentioned. How much are you trying to save?
This post was edited on 11/14/13 at 7:06 pm
Posted on 11/14/13 at 7:55 pm to Bayou Tiger
Pay off the student loans.
You will have a nice down payment soon enough after saving that loan payment. Definitely save it and don't spend it though.
You will have a nice down payment soon enough after saving that loan payment. Definitely save it and don't spend it though.
Posted on 11/14/13 at 10:42 pm to boomtapp
Loans in a heartbeat. Don't screw this up.
Posted on 11/14/13 at 10:45 pm to boomtapp
Loans. No doubt.
Posted on 11/15/13 at 12:23 am to boomtapp
This isn't even a question. Pay off all that debt and you still have 10k toward a down payment. You will be able to save the rest in a hurry without the 1700 in debt payments.
Posted on 11/15/13 at 7:35 am to boomtapp
quote:
The inheritance will be about 60k
Wow what an amazing grandmother... anyway dont screw this up. If i knew more about your situation i might say invest it. But just going what what you said pay off the debt and its not close.
Posted on 11/15/13 at 8:01 am to jmtigers
quote:
Wow what an amazing grandmother.
Yep. Mine won't leave me shite despite being an awesome grandson.
Posted on 11/15/13 at 8:37 am to boomtapp
quote:Choices:
So, do I pay off all our loans/debt ... or do I buy the house
1) pay off all debt.
2) go in to more debt.
You decide.
Posted on 11/15/13 at 9:02 am to boomtapp
How expensive of a house are you looking at? Do you have any other savings/how much do you save per month? Any kids? How much do you pay each month in rent currently.
I would lean toward doing both, if you would be comfortable in a 200K home for the next 10 years or so. Knock out 20K (or more) of the debt, and use the 40K (or less) for a downpayment. But we really need to know how much you spend on housing currently to make an informed decision.
I would lean toward doing both, if you would be comfortable in a 200K home for the next 10 years or so. Knock out 20K (or more) of the debt, and use the 40K (or less) for a downpayment. But we really need to know how much you spend on housing currently to make an informed decision.
Posted on 11/15/13 at 9:03 am to LSUnKaty
just curious, is the $60k before estate taxes? you should still pay off the loans though
This post was edited on 11/15/13 at 9:04 am
Posted on 11/15/13 at 9:18 am to jmtigers
I need someone in my family to die and leave me money. Since I like everybody in my family I currently know, I am hoping for some long lost uncle or cousin I've never met who bequeaths me a large sum of money for no reason.
Posted on 11/15/13 at 9:32 am to boomtapp
Pay the debt off and you will no longer be a slave.
Posted on 11/15/13 at 10:35 am to Radiojones
I am a slave 
Posted on 11/15/13 at 8:15 pm to boomtapp
quote:
Pay the debt off and you will no longer be a slave.
Posted on 11/17/13 at 11:37 am to boomtapp
Is the interest rate on your student loans fixed? If so, what's the rate? If you use the 60k for a down payment on a house, you'll immediately have 60k in equity, AND the house is still increasing in value. The rate of increase each year for the next few years will likely be about as much or more than the interest rate on your student loans***. I think that means it makes more sense to put it toward the house than pay off the student loans.
Buy the house now, before the price goes up more, and have lots of equity in your home to be able to borrow against in the future if you get into a big crunch and need money relatively fast.
I'm not 100% sure of this though. You're playing the housing market by doing this. A very good argument could be made to pay off your student loans now and save that $1,700 a month until you have a down payment on a house.
Weigh your options.
*** I say this because the increase in value of my own home has gone up between 6-9 percent a year for the last three years. I hope that continues but I seriously doubt it.
Buy the house now, before the price goes up more, and have lots of equity in your home to be able to borrow against in the future if you get into a big crunch and need money relatively fast.
I'm not 100% sure of this though. You're playing the housing market by doing this. A very good argument could be made to pay off your student loans now and save that $1,700 a month until you have a down payment on a house.
Weigh your options.
*** I say this because the increase in value of my own home has gone up between 6-9 percent a year for the last three years. I hope that continues but I seriously doubt it.
This post was edited on 11/17/13 at 11:41 am
Posted on 11/17/13 at 12:42 pm to TDsngumbo
Terrible
Posted on 11/17/13 at 5:34 pm to TDsngumbo
quote:
If you use the 60k for a down payment on a house, you'll immediately have 60k in equity
It's pretty reasonable to get a mortgage if the OP qualifies for the best rates. But he should do it with the least money down possible. Extra equity will be fine once the student debt is brought down.
Owing money at 4% fixed for 30 years (before the tax deduction, btw) is not a bad thing at all. I'd be in favor of locking down a long term mortgage at a good rate if possible, then use the rest to pay off student debt.
Page 1 of 2
Back to top
Follow TigerDroppings for LSU Football News