I was wondering if it is a better investment to pay off my student loans and rent for longer or save for a house and rent for a shorter period of time. My loans are about 18,000 @ 6.8. My finance loans are about 20,000 @ 8.0 . Between the two of us we will make about 79,000 a year.
Also should we consolidate our loans when we get out of school. I hear that this can get you a lower rate and that the interest rate on student loans can be a tax deduction.
Pay my student loans off and rent or save for a house?
Definately consolidate your loans if you can. The feds adjust the interest rate every year, so you can end up paying more in the long run. I consolidated mine a few years back at 5.5%... and I have over 25K of student loans. It%26#039;s always a good investment to buy a house, especially in this market. Plus, student loan repayment schedules are always pretty low (mine is like $115 a month) and you can always pay more if you want. If you can afford it I would definately say buy now. And yes, student loan interest is tax deductible (so is mortgage interest).
Pay my student loans off and rent or save for a house?
Definitely PAY OFF THE LOANS FIRST and rent a little longer. If you can pay them off, do it.
It%26#039;s so much easier to get on your feet when you don%26#039;t have those loans to worry about. It will not hurt to rent a little longer, especially if your rent isn%26#039;t a ridiculous amount of money per month. Besides, with the money you two are making, you%26#039;ll have those loans paid off and in your own home in no time.
And definitely consolidate your loans. That will only help you.
http://answers.yahoo.com/question/index;...
Pay my student loans off and rent or save for a house?
Save for the house. Renting is like throwing away your money. The longer you wait to buy the more you%26#039;ll regret it. It%26#039;s a buyers market right now, and the interest rates are almost at an all time low.
Pay my student loans off and rent or save for a house?
I would consolidate you will get a lower monthly payment and better intrest rate to hopfully. If you do this and get a lower monthly payment but still make the normal payment that you would have every month if you hadn%26#039;t you will get them paid off faster. Even if you only make whatever the new payment is and no more this will give you the extra money to save for a house and nto have to rent longer.
Pay my student loans off and rent or save for a house?
I agree with the poster above, Rent a bit longer and wait on the house....
when the two of you buy a house, unless it is a new one, MURPHY usually moves into a spare bedroom (by murphy, I mean murphy%26#039;s law)
undoubtedly a furnace will break or your water tank will go out. It is always something with a house and you will need the extra cash to fix it
Right now you can use that extra money to pay down your debt. If the two of you are making about 80k you should be able to pay it down rather quickly by doubling up on the loan.
In the meantime, figure out what you want in a house.
Do you need a garage, a nice lawn for the kids etc.
If you time your house purchase with your wedding you can actually have a use for some of the gifts that you will get!
Congrats on your upcoming nuptuals!
Pay my student loans off and rent or save for a house?
If you have student loans with the US govt, you should consolidate them together among themselves, and get them to one payment, this is a simplification of things. But do not absorb them into your other debt. You would be very hard pressed to match the interest rate offered by the federal govt for educational purposes. Of course, if you can find a better FIXED rate to transfer your student loan balance, then go ahead. Watch for things like penalties if you ever get in trouble, because many times the condition of such a loan are based on your faithful repayment...no exceptions.
As for buying vs renting, if it is strictly a matter of cash flow, you should know it is often quite comparable payments for a mortgage. You should add the periphery costs to have an accurate picture before you try to weigh the pros and cons and expenses of each....renters insurance, deposits, etc for leasing and then things like property taxes, homeowners insurance, remodeling costs, land value, and closing costs of owning a home.
If you decide to buy...then the right lender will make a big difference in your experience. As will the terms of your lease if you rent.
A couple of options if you want to dabble.
Get yourself under the wing of a house flipper who can teach you how it%26#039;s done. Then you can buy and resell cheap properties at a profit. This becomes a second or primary income that you can use to either save for your own home, pay your rent in the home you live in, or pay your student loans.
You can also look into rentals with the eventual option to buy...that way, if the landlord wants out from under the property at some point in the future, all your rent paid that far sinks into your ownership of the home.
For many people renting is great. If you don%26#039;t know where you are going to be for a given time, if you don%26#039;t have a lot of money saved up, if you don%26#039;t want the bother of taking care of a property. On the other hand, when you pay rent, you are essentially buying a service (the service of using a building) rather than a good (buying the home itself.) Renting is honestly throwing money down a rat hole. If you want your money to go into something that becomes YOURS, then you should BUY.
Pay my student loans off and rent or save for a house?
You%26#039;re being charged interest on the loans. Therefore, they need to be cleared before you can justify saving. It%26#039;s no use saving money and getting 3% interest on it (which will work out at about 2% interest after tax) when your loans are costing you 6.8% and 8%. That%26#039;s wasting money and means you have to work harder for longer to break even. If you%26#039;re anything like me, you don%26#039;t have the time or effort for that crap. So clear the loans.
Rent a very cheap place and concentrate on paying off those loans. That will get you debt free for later on. The benefits of being debt free are pretty awesome. It lowers your debt load, meaning you can potentially borrow more. It looks better on your credit history because you%26#039;ve proven you can pay off a loan. Hence, you can get a better deal. Also, it means that when you%26#039;ve paid off the loans, you can put every spare dollar into saving for a house deposit. Believe me, the bigger the deposit, the better. Even saving a few thousand more than you actually %26#039;need%26#039; to will save you THOUSANDS down the track in interest, and potentially cut years off the home loan.
Make a plan. Set a deadline to pay off the loans. The faster you pay them off, the less debt you%26#039;ll incur, which is great. So set a timeline and then try to beat that timeline. Pay off the debts. Then, start saving for a deposit. It should only take about a year to save a good deposit between the both of you, especially if you find a good bank account that earns decent interest.
Always save for a big deposit. That%26#039;s the best advice I can give. Go see a mortgage broker, not the bank. They can get you a good deal, saving you thousands in interest.
Best wishes.
Pay my student loans off and rent or save for a house?
Hi,
If you need some personal financial advice I know of a good site you can use.
Thanks
http://good-financial-planning.info/
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