Home

Student loans, Mortgage Advice
1, 2  Next
 
Post new topic   Reply to topic    Forum -> Household Management -> Finances

View latest: 24h 48h 72h


amother




Goldenrod


Post  Sun, Nov 18 2018, 4:16 pm
If you need to take out loans for graduate school, let say in the $250k range, would you wait to buy a house until after that's paid off? Or mostly paid off? Would you get a mortgage while in school which means you might post of the grad school loans later? (But you don't have to start paying the grad school loans until you graduate..) how do you know what is the financially sound decision?
Back to top

leah233




 
 
 


Post  Sun, Nov 18 2018, 4:55 pm
You are going to have a lot harder time getting a mortgage as unemployed student with 250K of outstanding student debt. Even if your husband has a good job.

That said why would you factor this in at all. If you have a realistic way to pay back both and you want to buy a house why wouldn't you? If you don't have a way then what is there to consider?
Back to top

finprof




 
 
 


Post  Sun, Nov 18 2018, 7:01 pm
It all depends on your situation. Do you have undergrad loans? Do you already have money saved for a down payment? Will your spouse be working?
Back to top

Amarante




 
 
 


Post  Sun, Nov 18 2018, 7:07 pm
The financially prudent decision is to determine what your monthly payments will be to pay back your student loan and balance those payments against what would be your expected realistic net income after graduate school.

One has to live somewhere so again what are your living costs if you purchase a home versus renting while you are in graduate school. Is your mortgage significantly higher than a rental would be - I personally wouldn't take out student loans to fund higher living expenses than would be necessary - again factoring in what your expected net realistic salary will be after graduation and how much income do you have left after paying monthly student loans.

Everyone's financial situation is unique - a doctor realistically is going to have a higher net income after completion of studies so taking on more loans is not a bad investment since the monthly payments would be a smaller percentage of net income. I would assume a CPA can expect a high salary as well - a lawyer not so much in terms of realistic expectations. A computer engineer also has a reasonable expectation of high salary and good job prospects.
Back to top

amother




Goldenrod


Post  Sun, Nov 18 2018, 10:24 pm
leah233 wrote:
You are going to have a lot harder time getting a mortgage as unemployed student with 250K of outstanding student debt. Even if your husband has a good job.

That said why would you factor this in at all. If you have a realistic way to pay back both and you want to buy a house why wouldn't you? If you don't have a way then what is there to consider?

What do you mean unemployed student?

I mean taking out a mortgage before having $250k debt. Meaning while in grad school. That’s the estimated number for post graduation
Back to top

amother




Goldenrod


Post  Sun, Nov 18 2018, 10:26 pm
finprof wrote:
It all depends on your situation. Do you have undergrad loans? Do you already have money saved for a down payment? Will your spouse be working?


No undergrad loans
Yes money for downpayment
Yes spouse working
Back to top

amother




Goldenrod


Post  Sun, Nov 18 2018, 10:31 pm
Amarante wrote:
The financially prudent decision is to determine what your monthly payments will be to pay back your student loan and balance those payments against what would be your expected realistic net income after graduate school.

One has to live somewhere so again what are your living costs if you purchase a home versus renting while you are in graduate school. Is your mortgage significantly higher than a rental would be - I personally wouldn't take out student loans to fund higher living expenses than would be necessary - again factoring in what your expected net realistic salary will be after graduation and how much income do you have left after paying monthly student loans.

Everyone's financial situation is unique - a doctor realistically is going to have a higher net income after completion of studies so taking on more loans is not a bad investment since the monthly payments would be a smaller percentage of net income. I would assume a CPA can expect a high salary as well - a lawyer not so much in terms of realistic expectations. A computer engineer also has a reasonable expectation of high salary and good job prospects.


The $250k is for tuition.. not including living expenses.
That’s my thought.. if the mortgage is not significantly higher.. isn’t it worth not wasting money on rent? But I don’t know if that’s financially sound.. having 2 loans
The salary post grad is high (one of the high fields you mentioned)
Back to top

amother




Smokey


Post  Tue, Nov 20 2018, 10:53 am
yes get the mortgage. you will figure out the student loans.once you are older and have a larger family with more tuition it will be harder to find the money for a down payment. I am speaking as someone who bought a home while we were both in school and taking out loans. I'm glad we did it.
Back to top

amother




Goldenrod


Post  Tue, Nov 20 2018, 12:38 pm
I clarified my question in my head:
Basically, my question is, do we really have to wait 10 years to buy a house, because we will be accumulating debt for grad school, so why are we trying to get into more debt?
We are really careful with our finances. Taking out 1 loan seems scary. Obviously, that's what we are doing to pay tuition(this is not for living expenses, we don't have the attitude "were getting a loan anyways, let's get a bigger one to live" obviously if it's needed, it's needed). 2 loans sound even scarier. In my head, however, I feel like we pay rent anyway, why not towards a mortgage (and by extension a bigger house).

I'm not sure if I'm thinking with my heart or my brain though.. (wants vs needs)
Back to top

Amarante




 
 
 


Post  Tue, Nov 20 2018, 1:15 pm
The analysis is really fairly simple

What is the net cost of a mortgage versus rent.

One way or another you will have to pay for a roof over your head - a home has benefits in terms of potential equity but it also can be more expensive than rent. You would have to run the numbers.

Also, how are you financing the down payment? Either you are using the downpayment fund in lieu of paying for some of the tuition or are you depleting an emergency fund.

I don't think it can be answered in a vacuum - You should compare what you could rent versus what you would buy. More subjective factors would be that generally students are live in less opulent rentals versus what you might buy in terms of a house.

But bottom line is to actually run the numbers. If you have the downpayment now, you would also theoretically have the down payment when you have graduated and have a better sense of where you might ultimately be.

Let's assume you are going to med school - you have no idea where your residency might be or where you might wind to set up practice. Therefore it might not be smart to buy a house and have to sell in four years.
Back to top

amother




Goldenrod


Post  Sun, Feb 10 2019, 2:11 pm
Amarante wrote:
The analysis is really fairly simple

What is the net cost of a mortgage versus rent.

One way or another you will have to pay for a roof over your head - a home has benefits in terms of potential equity but it also can be more expensive than rent. You would have to run the numbers.

Also, how are you financing the down payment? Either you are using the downpayment fund in lieu of paying for some of the tuition or are you depleting an emergency fund.

I don't think it can be answered in a vacuum - You should compare what you could rent versus what you would buy. More subjective factors would be that generally students are live in less opulent rentals versus what you might buy in terms of a house.

But bottom line is to actually run the numbers. If you have the downpayment now, you would also theoretically have the down payment when you have graduated and have a better sense of where you might ultimately be.

Let's assume you are going to med school - you have no idea where your residency might be or where you might wind to set up practice. Therefore it might not be smart to buy a house and have to sell in four years.


I'm back, but now I have more questions.
To answer the bolded, We would be financing the down payment with savings. (Not touching the emergency fund)
So my new questions are regarding the bolded. Is it worth it to pay the tuition straight up? Forget about the downpayment, and just take out as little loans as possible, which means using our savings for tuition.
And re emergency fund: if we choose to put our savings towards tuition, do we still need a emergency fund if we are eligible for student loans (that we wouldn't take out otherwise because we are paying from our savings, but their always available for us right?)

If we pay tuition from our savings without taking out loans that would save so much money as we would be avoiding all that compounding interest.

I find your posts on point so thanks so your input
Back to top

Amarante




 
 
 


Post  Sun, Feb 10 2019, 3:36 pm
You are asking whether it is better to use your savings to pay tuition versus a down payment for a house?

You are also asking whether you should rely on loans and liquidate your emergency savings?
Back to top

amother




Jade


Post  Sun, Feb 10 2019, 4:07 pm
My husband is a med student. Here is what worked for me. I had the money in the bank for a downpayment. We bought the house and the loan in under my name and I'm employed.
I would never choose to keep renting and use my house saving to pay off student debt outright.
Your house will be worth a lot of money by the time ur graduated and working. Real estate is always going up. If you can afford to buy now then go for it . Dont flush $ renting . Student debt usually isnt more than a few hundred dollars a month ...
Back to top

amother




Goldenrod


Post  Sun, Feb 10 2019, 5:01 pm
Amarante wrote:
You are asking whether it is better to use your savings to pay tuition versus a down payment for a house?

You are also asking whether you should rely on loans and liquidate your emergency savings?


1. I'm leaning towards not buying a house, so I'm asking abt using that money to pay tuition vs keeping it savings.

2. Yes
Back to top

amother




Goldenrod


Post  Sun, Feb 10 2019, 5:07 pm
amother wrote:
My husband is a med student. Here is what worked for me. I had the money in the bank for a downpayment. We bought the house and the loan in under my name and I'm employed.
I would never choose to keep renting and use my house saving to pay off student debt outright.
Your house will be worth a lot of money by the time ur graduated and working. Real estate is always going up. If you can afford to buy now then go for it . Dont flush $ renting . Student debt usually isnt more than a few hundred dollars a month ...

Thanks for posting.
Did your really run the numbers?
Lets say the Student loan debt is 250k at 6.7% - that equals to 430k of debt if you use a 20 yr payment plan.
Whereas rent at 2k a month x 4 years = 96k
Back to top

amother




Jade


Post  Sun, Feb 10 2019, 5:13 pm
amother wrote:
Thanks for posting.
Did your really run the numbers?
Lets say the Student loan debt is 250k at 6.7% - that equals to 430k of debt if you use a 20 yr payment plan.
Whereas rent at 2k a month x 4 years = 96k


My husband went over It with the accountant many times . My house is 5 years old . I bought it for 500k an identical house sold on my street for 620k last year. That's how real estate climbs . A 400k mortgage over 30 years is over a million at 4%
Back to top

amother




Jade


Post  Sun, Feb 10 2019, 5:22 pm
I'm not the money savvy one in my marriage so I dont have all the answers for u but something to think about is having the cash now to buy vs using the cash to pay loans. If u graduate in 4 years with no loans and no house money how long will it take u to build up that type of savings again. Your Bill's will likely be a lot higher than and you will be more dependent on your salary
Back to top

aliavi




 
 
 


Post  Sun, Feb 10 2019, 5:23 pm
It’s not wise to consider only the monthly expenses. It is wise to limit debt. Ultimately you will have to weigh all of the pros and cons to come to a decision.

Despite the common rhetoric of ״wasting money on rent”, paying interest is no different than paying rent.

There should be grad school options for less than $250K of tuition only. I’m not sure I understand that piece and would suggest looking there. Medical school is the only option that would reasonably have that tuition and would also very likely result in your family moving after graduation (another consideration).

P.S., I’m an accountant with a graduate degree.
Back to top

amother




Smokey


Post  Sun, Feb 10 2019, 5:28 pm
You have to realize that paying for a home is an investment that you will have forever. Paying student debt is important but you have no further gain from it. The degree is gotten. Worst comes to worst you apply for forgiveness after so many years. As you can tell student loans is a pet peeves of mine. The way colleges continue to raise tuition is absolutely ridiculous and unfair. And the gov rates on loans are also unfair and unsustainable.
Back to top

Amarante




 
 
 


Post  Sun, Feb 10 2019, 6:45 pm
If your question is whether to spend savings for tuition or to take out a student loan, I would take out a student loan.

This is because the interest while attending school is minimal and interest on student loans is deductible up to $2500.

If you use a loan to pay off tuition, you will have your savings at the end of graduation and you can assess your financial situation at that point. You can use the money to pay off the loans entirely or just use it to pay off a bit faster or pay off monthly and use the money for something else.

Once you have used up your savings, amassing that amount would be difficult. The amount paid in interest if you decide to repay loan quickly and use up your savings after graduation is minimal versus the flexibility you would have with the savings intact and the peace of mind having that amount in savings.

Borrowing to cover tuition is not a bad economic decision so long as attending the school makes economic sense. Attending a mediocre college versus a free or inexpensive state school makes no sense. Borrowing money for a commercial college like Trump University LOL makes no sense. Borrowing for a professional school like med school makes economic sense etc.
Back to top
1, 2  Next Recent Topics

Page 1 of 2 View latest: 24h 48h 72h


Post new topic   Reply to topic    Forum -> Household Management -> Finances

Related Topics Replies Last Post
Teaching English to ASD student 10 Today at 12:39 pm View last post
ISO Devora Heller's Challah recipe and advice
by Mevater
39 Thu, Feb 14 2019, 2:09 pm View last post
Snow and sick. I need chizuk and advice!
by amother
10 Tue, Feb 12 2019, 12:20 am View last post
Advice on dealing with apathetic parents 15 Sun, Feb 10 2019, 1:11 pm View last post
Advice on dealing with apathetic parents 0 Sun, Feb 10 2019, 1:35 am View last post

Jump to: