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Student loan question
Posted on 6/2/17 at 7:01 pm
Posted on 6/2/17 at 7:01 pm
I need some advice...
My wife currently has 70k in student loans. We have exhausted all of our deferments etc. we are currently paying $1200ish a month and it's killing me.
We live in a 400k house that is fully paid off. (It was left to me by a relative) It's also in my name.
My question is, should I take out a line of credit with the bank using my house as collateral and pay the loans off? My payments to the bank would be half of what I'm paying now. I would have to refinance my mortgage since the house is paid for.
Thoughts?
My wife currently has 70k in student loans. We have exhausted all of our deferments etc. we are currently paying $1200ish a month and it's killing me.
We live in a 400k house that is fully paid off. (It was left to me by a relative) It's also in my name.
My question is, should I take out a line of credit with the bank using my house as collateral and pay the loans off? My payments to the bank would be half of what I'm paying now. I would have to refinance my mortgage since the house is paid for.
Thoughts?
13
Posted on 6/2/17 at 7:41 pm to AlbertMeansWell
Well what rates are the student loans at?
Posted on 6/2/17 at 8:30 pm to AlbertMeansWell
Not trying to sound like a dick, but if a 1200/payment is too much and you have a paid for 400k house, then sell the house.
Without a mortgage, 1200 bucks a month shouldn't be that difficult.
Without a mortgage, 1200 bucks a month shouldn't be that difficult.
Posted on 6/2/17 at 8:46 pm to Ric Flair
I think you've got a budget problem if y'all don't have a housing expense and can't cover $1200/mo.
Or an income problem. But I'd wager it's the former.
Or an income problem. But I'd wager it's the former.
Posted on 6/2/17 at 9:25 pm to AlbertMeansWell
Deferments? Why didn't you get on Income Based Repayment?
Posted on 6/2/17 at 9:27 pm to Golfer
quote:
I think you've got a budget problem if y'all don't have a housing expense and can't cover $1200/mo.
Or an income problem. But I'd wager it's the former.
I am the only one working. My wife is staying at home with our two children. A new born and a 1 year old.
Life came at us fast.
Posted on 6/2/17 at 9:44 pm to AlbertMeansWell
You need to get on IBR. It's a pain in the arse now since the IRS website no longer directly connects to FAFSA, but you need to do it.
That's in the short term. In the long run you'd probably do better, interest wise, to get a HELOC at a much lower rate. My student loans are at 6.8% but I'm too stubborn to refinance now - something about switching horses midstream - and stupidly think I can pay them off soon.
That's in the short term. In the long run you'd probably do better, interest wise, to get a HELOC at a much lower rate. My student loans are at 6.8% but I'm too stubborn to refinance now - something about switching horses midstream - and stupidly think I can pay them off soon.
Posted on 6/2/17 at 9:48 pm to GaryMyMan
I'm in IBR
Posted on 6/2/17 at 10:35 pm to AlbertMeansWell
If you're in IBR and are paying $1200/mo your income is high enough to afford the note. Especially without a home expense.
Barring something you're not sharing (major medical debt, etc.) I don't think the student loan is your problem.
Barring something you're not sharing (major medical debt, etc.) I don't think the student loan is your problem.
This post was edited on 6/2/17 at 10:37 pm
Posted on 6/2/17 at 11:52 pm to AlbertMeansWell
70k in student loans to be a stay at home mom. Niiiiice.
Posted on 6/3/17 at 5:52 am to AlbertMeansWell
quote:
Life came at us fast.
Sounds like it did twice, perhaps you need a TV in the bedroom. J/K
In all reality sounds like you have two issue, spending and planning, until you resolve them it aint getting any better.
I would never recommend indebting my paid for residence for anything other than life saving medical care.
Posted on 6/3/17 at 9:07 am to AlbertMeansWell
No possible way you are in IBR with a 1200/month payment.
Reverse engineering that, your income would be north of $200k. With $70k in debt and no mortgage, live like you make $130k and pay it off in one year.
Your best option is to get on the PAYE plan and file your taxes separately. It's a pain, but will save you thousands over the long haul. Option 2 is the RPAYE plan, which will make your payments 10 percent of your income (AGI) over roughly 2500/month.
Do it quick because it's not going to be around that much longer and you want to be grandfathered in.
Reverse engineering that, your income would be north of $200k. With $70k in debt and no mortgage, live like you make $130k and pay it off in one year.
Your best option is to get on the PAYE plan and file your taxes separately. It's a pain, but will save you thousands over the long haul. Option 2 is the RPAYE plan, which will make your payments 10 percent of your income (AGI) over roughly 2500/month.
Do it quick because it's not going to be around that much longer and you want to be grandfathered in.
This post was edited on 6/3/17 at 9:12 am
Posted on 6/3/17 at 9:45 am to tiger rag 93
quote:
70k in student loans to be a stay at home mom. Niiiiice.
That is one expensive MRS degree
Posted on 6/3/17 at 9:48 am to AlbertMeansWell
quote:
I am the only one working. My wife is staying at home with our two children. A new born and a 1 year old.
Life came at us fast.
Sure. And what are your combined car notes?
Posted on 6/3/17 at 11:55 am to AlbertMeansWell
I hope the loans were worthwhile for her career at least because that's a lot, and $1200 a month seems high.
Posted on 6/3/17 at 12:20 pm to AlbertMeansWell
Something doesn't sound right with this situation.
Can you not afford the note or you would just have more cash available every month?
Without a mortgage, making a decent income you should be able to afford $1200/month note (that's what average living would cost you anyway).
You could always sell the house, buy something for $100k less and pay of your debt...
Can you not afford the note or you would just have more cash available every month?
Without a mortgage, making a decent income you should be able to afford $1200/month note (that's what average living would cost you anyway).
You could always sell the house, buy something for $100k less and pay of your debt...
Posted on 6/3/17 at 12:35 pm to AlbertMeansWell
I'm guessing you have two vehicle notes at 400 plus, each. Sounds like your wife needs to get back to the office. With a paid off mortgage and a 1200 a month? That should be easy.
Also, why not take out the 70k against the house, pay off the loan which is probably 4% interest or more. Put the 70k over 15 years at 4% and live easily.
Also, why not take out the 70k against the house, pay off the loan which is probably 4% interest or more. Put the 70k over 15 years at 4% and live easily.
Posted on 6/3/17 at 1:02 pm to AlbertMeansWell
My thoughts are, once your kids are old enough to be in school your wife needs to go back to work because it sounds like y'all can not afford to live the life y'all want to live on one income. That's a lot of debt to be a stay at home mom. If y'all have a 400k house paid off and you still can't afford that note it sounds like you can't afford that house or live beyond your means. How much are the utilities for this house? How much are y'alls car notes? Not having a house note will give people a false sense of disposable income and will get under other notes to take its place. Don't let your wife talk you into buying her a 50k-60k SUV bcs on paper it looks like y'all can afford it. How much are you putting away a month for retirement, savings, emergency fund?
Posted on 6/3/17 at 1:23 pm to TigerSaint1
Don't miss the point.
He says he lives in a free and clear $400k house. That's great.
But he says he is on an IBR plan with a $1200 payment.
In Tennessee, the amount of income that IBR exempts from the AGI for a married couple with one child is $30,135. The IBR payment is no less than 10% and more than 15% of the income over this amount. To have $14,400 in annual payments under an IBR (which is insane for a $70k balance), the family AGI would have to be somewhere over $204,276. Actual income could be significantly more based on deductions.
With no housing payment, $1200 a month should be pocket change.
My thoughts are that the OP is NOT on an IBR program and needs to make this happen today. It will take 60-90 days, but the payments would go down to $0 (if you used your wife's income, but you have to file separately). If you don't want to file separately, the most your payment can be is
AGI minus $30,135 = Factor 1
Factor 1 times 0.10 = Factor 2
Factor 2 divided by 12 = Monthly payment max.
The loan is forgiven after 20 years regardless (10 if you work for a non-profit or a government entity). Yes, if you use your wife's $0 income and file separately, the loan will be forgiven in 20 years without paying a dime.
Trump's proposal is to make the factor 12.5% but forgive after 15 years.
He says he lives in a free and clear $400k house. That's great.
But he says he is on an IBR plan with a $1200 payment.
In Tennessee, the amount of income that IBR exempts from the AGI for a married couple with one child is $30,135. The IBR payment is no less than 10% and more than 15% of the income over this amount. To have $14,400 in annual payments under an IBR (which is insane for a $70k balance), the family AGI would have to be somewhere over $204,276. Actual income could be significantly more based on deductions.
With no housing payment, $1200 a month should be pocket change.
My thoughts are that the OP is NOT on an IBR program and needs to make this happen today. It will take 60-90 days, but the payments would go down to $0 (if you used your wife's income, but you have to file separately). If you don't want to file separately, the most your payment can be is
AGI minus $30,135 = Factor 1
Factor 1 times 0.10 = Factor 2
Factor 2 divided by 12 = Monthly payment max.
The loan is forgiven after 20 years regardless (10 if you work for a non-profit or a government entity). Yes, if you use your wife's $0 income and file separately, the loan will be forgiven in 20 years without paying a dime.
Trump's proposal is to make the factor 12.5% but forgive after 15 years.
This post was edited on 6/3/17 at 1:27 pm
Posted on 6/3/17 at 3:46 pm to GaryMyMan
quote:
It's a pain in the arse now since the IRS website no longer directly connects to FAFSA
I recertified my IBR for next year last night. Can connect again to IRS website again. Couldn't last week when I first started process. Think it was just down for maintenance or something.
Glad it came back up b/c I didn't want to mail all that crap.
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