in ~6 months i am thinking of buying a condo, nothing too expensive or anything, probably around $100k. let's say i have $15k in the bank to spend and owe $10k in student loans still. would it be better to pay off the entire student loan and have a lower downpayment or would it be better to put more down on the house and keep paying off the student loan over time?
pay off student loan or put more down on condo?
- Thread starter jred321
- Start date
Compare your interest rates. If the student loan is at a relatively low rate it may be more in your favor to put the money down on the condo. If you put down enough on the condo it is possible to get out of paying PMI and that money could be put torward paying the studen loan off faster.
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- '13 CWP MS3 & '16 Mazda6 GT
I'd say pay off the loan. If you dont pay off the loan and put more down you'll still have that extra bill each month and the 10K extra in the mortgage payment will be nothing in comparisson to still having to make the student loan payment each month...
well i didn't like the interest rate so i wanted to get it paid off ASAP rather than taking the full 15 years they give. it should be gone after ~2 years
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- 96 Miata M-Edition, 2015 Mazda 3 Hatch
get rid of the student loan first.. you'll get a better mortgage rate if you have less debt!
where are you going to find a condo for 100k in ct?
where are you going to find a condo for 100k in ct?
up near me. might be closer to 120 or so but i look in the paper every weekend and there are plenty of 2br condos in that ballpark.
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- '13 CWP MS3 & '16 Mazda6 GT
if you have the money to pay off the loan now you should go ahead and do that and use the extra $ to save for a down payment while you're looking. If you pay $1000 a month to it and no longer pay on that then thats an extra $6k to go for a down payment when you''re ready
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- 96 Miata M-Edition, 2015 Mazda 3 Hatch
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- '13 CWP MS3 & '16 Mazda6 GT
ah, gotcha...well either way, paying it off would be smarter
i hope so but i'll have to shop around and see what i can find. i would assume a majority won't have a garage but maybe if i shop around i can find one. as long as i don't go too far away i can still use my parent's garage to do work on the car but i'll still have to wipe snow off in the winter
I think this depends a little on your income ... Student loan interest is a tax adjustment, and mortgage interest is a tax deduction.
There is a salary cap on adjusting your taxable income down ... if you make over $50k per year, you don't get to adjust your taxable income down by the full amount of interest you paid in student loans, only a fraction.
Meanwhile, I think the limit on mortgage interest tax deduction is much higher (if there even is a limit).
There is a salary cap on adjusting your taxable income down ... if you make over $50k per year, you don't get to adjust your taxable income down by the full amount of interest you paid in student loans, only a fraction.
Meanwhile, I think the limit on mortgage interest tax deduction is much higher (if there even is a limit).
i do make >$50k/year and found out that limit last year. how could i take advantage best?
i was browsing around on justcondos.com and in the 90-150k range there were 431 listings but they start to get decent in the 120k range. where that puts me is built in the 1970s-80s, 2 br, 1-2ba, most don't look like they have a garage. i'm ok with the results i got back and hopefully the market will get better for me in the coming months
i was browsing around on justcondos.com and in the 90-150k range there were 431 listings but they start to get decent in the 120k range. where that puts me is built in the 1970s-80s, 2 br, 1-2ba, most don't look like they have a garage. i'm ok with the results i got back and hopefully the market will get better for me in the coming months
Mr. 4500 RPM
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jared good luck with everything, I would say less debt is better but thats just me. Remember the closer you pay off the student loans its 1 less payment to make. It is all about personal prefference though. If you really need your own place right now or not. Honestly I would wait it out and find something worth your time and money. So good luck and hope everything works out for you in the end.
You should run the numbers to see exactly how it comes out, but this probably means that you would rather want to have mortgage debt than student loan debt.
What you need to see is what fraction of your student loan you get back ... the higher your salary is over $50k, the less they allow you to deduct from your taxable income. The idea is to help out recent grads with a ton of debt ... let's face it, if you're making $250k a year, you probably don't need too much help paying off student loans compared to someone who's gone to a private liberal arts school, racked up $100k+ in student loans, and ended up with a job making $25k a year.
If you are significantly over $50k/yr, you probably lose most of your tax deduction ... you'd be better off paying off that loan and having more debt on a mortgage. Then you will have more interest paid into a mortgage, which will be 100% tax deductible, not some fraction as compared to the student loan.
One thing that no one mentioned is that with the codo as you pay it off you are getting equatity and with the student loan you have nothing , pay off the student loan first ,take the student loan payment add that to the mortgage payment and pay down the mortgage faster . The extra amount of payment will go directy on the principle of the mortgage ,thus allow you to pay it down quicker ,Also try and pay weekely as the this helps pay down the mortage quicker as well .
