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Hello. My husband and I are not seeing eye to eye on this issue and any opinions would be welcome. We sold our condo about 2 months ago and moved into my mother's basement apartment to save money toward a house. (The condo was a bad choice for us, and a VERY expensive mistake). From that sale and our continued savings, we figure we need about 6K-8K more for our down payment and closing costs. Once all bills are paid, we are able to save $1,800/month to put toward this.
The problem is, I have just under 16K in student loan debt that is preventing us from a) saving more at a faster rate, and b) getting a better mortgage because I would be able to contribute more toward bills, etc. instead of paying $560 per month on the loan.
My husband wants to take the savings we currently have and pay off the 16K debt...I think that would be a disaster, as it would mean having to save all that money up again and living with my parents for another 8-10 months!
Just looking for some opinions of people that may be much better at seeing this financial issue than we are. We really just want to do the smartest thing.
It makes sense to accelerate paying off the loans, provided at least they are the typically high rates student loans have.
Perhaps meet in the middle and plan on buying when your loans are under 10k? Your husbands suggestion, provided you have a proper emergency fund is not a terrible one.
Pay off the student loans ASAP, then save for the house. Student loans are collateralized by your future earnings, can't be discharged in a bankruptcy, and student loan payments will be collected against SS payments if you still owe when you retire.
$560 per month is about the equivalent of a $120,000 mortgage payment - that's a decent house in some places, and half a decent house in all but the most expensive/affluent areas of the country.
8-10 months of suck is a very small price to pay for a lifetime of financial security. Your husband is looking out for your best interests (and his too) on this one.
Just the opinion of a father who has a 30 something daughter in very similar circumstances (she also has 2 kids), and same advice was given to her about 2-3 months ago...
Best regards.
Last edited by Tuck's Dad; 12-28-2015 at 02:49 PM..
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