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Old 07-04-2015, 01:45 PM
 
4,483 posts, read 7,949,372 times
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Quote:
Originally Posted by Atlantamara View Post
What drives the need to accelerate the payoff of the student loans? The interest rate is fixed fairly low and tax deductible. We try to maximize deductions so it seems like if one was going to pay things off, student loans would be toward the back of the line.
It tax deductible from your taxable income. Paying $3k in interest to save $1k in taxes doesn't make sense. People are so bad at math.
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Old 07-04-2015, 03:38 PM
 
Location: Phoenix, AZ > Raleigh, NC
14,318 posts, read 17,531,665 times
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Quote:
Originally Posted by 399083453 View Post
It tax deductible from your taxable income. Paying $3k in interest to save $1k in taxes doesn't make sense. People are so bad at math.
Thank you. I just couldn't bare to say it again. And again. And again.
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Old 07-06-2015, 10:53 AM
 
1,056 posts, read 872,410 times
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Quote:
Originally Posted by Atlantamara View Post
What drives the need to accelerate the payoff of the student loans? The interest rate is fixed fairly low and tax deductible. We try to maximize deductions so it seems like if one was going to pay things off, student loans would be toward the back of the line.
At your income level, you are getting $0 in tax deductions from the student loan payments. Deductions for student loan interest phase out over incomes of $150,000.

Student loans generally are toward the back of the line because they are usually lower interest than credit cards or car loans. Another plus is that if you have federal backed student loans and the borrower were to die, the remaining balance is discharged and no longer needs to be paid back which is not the case for other loans.

However, the sooner the student loans get paid back, the better for your budget especially if you're buying a $600k+ house.
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Old 07-06-2015, 05:27 PM
 
3 posts, read 3,824 times
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Quote:
Originally Posted by 399083453 View Post
It tax deductible from your taxable income. Paying $3k in interest to save $1k in taxes doesn't make sense. People are so bad at math.
Quote:
Originally Posted by Jkgourmet View Post
Thank you. I just couldn't bare to say it again. And again. And again.
Appreciate the replies, and sorry for my lack of mathematical and financial sophistication. I've always understood that you should pay off higher interest, non tax-deductible items first; things like cars, credit cards, or house payments. I think everyone's goal is to pay everything off, but it's helpful to know your perception of priorities.
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Old 07-06-2015, 06:45 PM
 
Location: Brentwood, Tennessee
39,117 posts, read 37,766,222 times
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Quote:
Originally Posted by Restrain View Post
Whatever you do, plan of what would happen if one of you were laid off, bonuses don't come through, health issues happen, etc. yes, you want to hit the upper end, but give yourself plenty of SHTF room.
Quote:
Originally Posted by Dad0118 View Post
Most smart high earning families I see who make between 200k-600k in HHI aren't buying homes over $500k in price (these are mostly fellow partners at my CPA firm). I would in no way be comfortable buying a home that price with less than $200k in income, but to each his own.
This cannot be overstated.

Coming from a town where the median home price last month was $625K, I have seen many families overextend. A conservative approach is best.

Plenty of lenders will see your good qualifications and focus solely on whether the numbers "work" on paper without considering what living with a mortgage like that actually entails.
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Old 07-08-2015, 02:47 PM
 
379 posts, read 488,580 times
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I think $600-$700K should be fine for the OP. At the base salary amt, they're netting ~$9000/mo after tax and 10% 401k contributions. After car notes and est student loans and health insurance, they're looking at $7500/net worst case.

A mortgage w 20% down should result in a P&I payment of $2400, $1K prop taxes (2% est), another $500 for utilities @ $600K sale price. Still leaves OP with ~$3500/mo+ to cover any additional entertainment and CC expenses.

Personally, I'd try to stay more around the lower part of the range to cover the risk of job loss. When we were looking, we kept a max budget of $600K with $250K+ HHI.
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Old 07-08-2015, 07:37 PM
 
Location: MID ATLANTIC
7,602 posts, read 17,643,477 times
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I agree, the OP is well qualified to do what he likes and nothing he has said raises even an eyebrow of concern. OP, shop for the best rate around, you deserve it and will get it.
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Old 07-16-2015, 08:54 AM
 
50 posts, read 41,259 times
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The amount of other debt such as car payments, credit cards, student loans, personal loans, etc... play a big role. Some people have very little debt and some have a lot. The mortgage payment may be easier for some and harder for others that make the same amount of money because of the "other debt."

Just find a competent loan officer and get Pre-Qualified.
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