May be moving for work soon. We put 20% down on the house I bought before I got married. Now that I'm married my wife's student loans are part of our monthly expenses. I have no idea how much PMI will actually cost per month, but I was wondering if it would be worth using down payment money plus savings to pay off the loans (80k+). I know it will come down to actual dollar savings to make the right decision, but I feel like I may be offered an opportunity soon and this all plays into my decision. I may not be able to know those numbers before accepting the offer. Will PMI be better than 6% interest on student loans. 200k house.

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Posted by ItsThatDude12

Giving out Mercy Knees

Member since Apr 2009

9927 posts

Posted on 3/25/14 at 7:47 pm to KG6

The PMI will only be around 80 bucks per month. Pay off the student loans and refinance once you have 20% equity.

Once you have that equity you can refinance (albeit it may be a higher rate than what you're getting now) but the PMI will dissolve.

This post was edited on 3/25/14 at 7:49 pm

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Posted by Jimmy2shoes

The South

Member since Mar 2014

11004 posts

Posted on 3/25/14 at 8:56 pm to ItsThatDude12

I would get rid of the student loans first

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Posted by KG6

Member since Aug 2009

10920 posts

Posted on 3/25/14 at 9:16 pm to Jimmy2shoes

Other kicker is we have a baby on a way. Paying off the loans cuts into the safety net which is now more important. But it also reduces the need for my wife to need an income which allows her to stay home helping with daycare costs.

who would have though a promotion and the possibility of paying off loans could be so stressful.

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Posted by LSUtigerME

Walker, LA

Member since Oct 2012

3789 posts

Posted on 3/25/14 at 9:45 pm to KG6

I'd suggest putting down enough money to cover PMI. That will be money just wasted for no real reason. If the new bills and baby will make money tight, get a smaller/cheaper house, or rent for a while to stabilize income.

The reason I also don't suggest putting it towards the student loans is the flexibility. Student loans are generally very flexible and have more programs in place to help you out. They are also tax deductible.

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