pay off student loan or put more down on condo?
- Thread starter jred321
- Start date
iirc this would be your first home purchase... there are a lot of special loans (lower interest rates) in order to get you comfortably into your first home. Look around there are a lot of articles online that can explain it better then myself. Things like taking a loan out for your DP and then having a larger loan for the rest of the home.
Also a home at that cost will run you around 800ish which seems like you could easily afford esp if you student loans are paid off.
Why a condo? When you looking at something that old it can be risky. The walls were a lot thinner back then and the building codes have changed a lot as well. I have also seen old rental properties turn into condo and that can be a risky investment. A lot of things can be hidden.
How long to you plan on living in this condo?
Also a home at that cost will run you around 800ish which seems like you could easily afford esp if you student loans are paid off.
Why a condo? When you looking at something that old it can be risky. The walls were a lot thinner back then and the building codes have changed a lot as well. I have also seen old rental properties turn into condo and that can be a risky investment. A lot of things can be hidden.
How long to you plan on living in this condo?
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- 96 Miata M-Edition, 2015 Mazda 3 Hatch
I did that one.. works beautifully.
You started out good but your logic is backwards -- you basically say "paying off student loan = less equity in the house", which is true and exactly why you DON'T want to pay off the student loan first. He should use all of that money that he was going to use to pay off the loan and put it directly into the house, because then all of that is instant equity that can be liquidated later if he so chooses. Personally if it was me I'd not pay off the student loan unless you'll still have enough for 20% down on the house afterwards.
yes it will be my first home purchase. i've heard that there are different things out there to help first time buyers and when it comes time to purchase i will investigate
do you mean why a condo as opposed to a home or as opposed to an apartment? a home is too much work for me, all of the exterior stuff i don't have the time or desire to do. an apartment i don't particularly like the idea of paying someone else's mortgage for them. apartments around here go for pretty much the same as a mortgage would cost. i plan on living in the condo for probably ~5 years but then there is the thought of turning it into a rental after that.
It's actually illegal to borrow money for a downpayment on a house ... a traditional loan, that is. I "borrowed" money to put down on my house, but it was borrowed against my 401k which is technically my money anyway. So you'd have to have a situation like that in order to do this.
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- '13 CWP MS3 & '16 Mazda6 GT
as long as you're 401k allows it theres no problem. Typically you will pay interest but its interest to yourself i believe. Your 401k provider or HR department would be the best place to find out how and what ramifications borrowing against a 401K will mean.
Its basicly a secured loan, if you f' up and can't pay they own your 401k.
i guess that's why they only let me take out 50% of my balance.
when you borrow you pay back at an interest rate less than it should be earning on its own, 9.25% on my 401k. it's better than paying interest to a 3rd party i guess
A few things.
1. do nothing without talking to a mortgage agent. They will tell you what will happen based on you having the more loan debt vs more money to put down and all that crap.
2. You do not want PMI. Getting rid of PMI is near impossible as that is extra money into the mortgage companies hands every month.
3. DO NOT USE CITIBANK or anything CITIfinicial related for a loan. THEY SUCK HARD. They applied my mortgage payment to my parents mortgage and it took me 6 month of dealing with dipshits in India to straighten it out.
4. The houseing market is only going down in value and this will continue into and possible past the winter months. In our area of the country house sales are falling by 10-15%. This only means that prices will come down. As pricing comes down people that paid WAY to much for their homes with 90% and higher loans will say screw it and let it go into forclosure as they now have to pay a $500,000 mortgage on a $390,000 house. Again this will lower prices.
5. At least in NH, as a first time home buyer you can take from your 401K without paying it back and tax free. This is only for a first time buyers and the amount you take out must all go to the downpayment of the house. Check into it although they may have changed this from when I bought my comdo.
That all considered, if you have cheap rent or even better, are living with parents then stay put and pay off the loans. Its going to get you a much lower interest rate and mortgage payment in the future.
1. do nothing without talking to a mortgage agent. They will tell you what will happen based on you having the more loan debt vs more money to put down and all that crap.
2. You do not want PMI. Getting rid of PMI is near impossible as that is extra money into the mortgage companies hands every month.
3. DO NOT USE CITIBANK or anything CITIfinicial related for a loan. THEY SUCK HARD. They applied my mortgage payment to my parents mortgage and it took me 6 month of dealing with dipshits in India to straighten it out.
4. The houseing market is only going down in value and this will continue into and possible past the winter months. In our area of the country house sales are falling by 10-15%. This only means that prices will come down. As pricing comes down people that paid WAY to much for their homes with 90% and higher loans will say screw it and let it go into forclosure as they now have to pay a $500,000 mortgage on a $390,000 house. Again this will lower prices.
5. At least in NH, as a first time home buyer you can take from your 401K without paying it back and tax free. This is only for a first time buyers and the amount you take out must all go to the downpayment of the house. Check into it although they may have changed this from when I bought my comdo.
That all considered, if you have cheap rent or even better, are living with parents then stay put and pay off the loans. Its going to get you a much lower interest rate and mortgage payment in the future.
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- '13 CWP MS3 & '16 Mazda6 GT
1sty is correct about the FHB thing. I forgot about that. As long as the funds are for a first time home purchase they can be pulled out tax and penalty free. Im quite certain thats an IRS law not just state by state
i'm living with parents now, am moving for 6 months to company paid for housing but after that do not plan on moving back in with my parents for any significant period of time as my older brother moved back in this week and i'm getting out of there. i'm supposed to come back feb 1 and bonuses are feb 15 so i may be back for a few weeks but don't plan on spending any real time there. i def plan on talking to an agent and actually now that i think about it should investigate if my company has any agreements with lending institutions
what is PMI?
what is PMI?
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- '13 CWP MS3 & '16 Mazda6 GT
Private Mortgage Insurance... you typically have to pay that if you finance more that 80% of the purchase price
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- '13 CWP MS3 & '16 Mazda6 GT
A friend at work has citi for her loan to, and i heard her complaining before too...Spend the extra $500 lol
$5000 would not make it worth me using them again. Every month it was another line of BS about something.
PMI is a F-ing scam, period. If you finiance more then 80% then you have to pay a percentage of the loan AGAIN to the mortgage company for fake insurance incase you defualt on the loan and there is not enough equity for the mortgage company to get their money. The idea is that once you hit 20% equity in the home you can file to have PMI removed. The catch it that it is a drawn out BS process. I recall that if there is any history of late payments and things like that, the mortgage company can refuse to remove PMI. It was funny that the same time I filed to remove PMI, they screwed up my mortgage payment giving them cause to keep PMI on my loan. So they screwed up and I got to keep paying for it. At that point I did some research and found that this is a very well known Citigroup scam and there are entire websites dedicated to nothing but the raw hatered of citigroup.
The only reason I sold my condo was to get the hell away from them as a mortgage company. Now I have Bank of America and all has been well for the last year.
I did not have the 20% for a down payment so I did a 10/10/80 loan which means you do an 80% primary mortgage, a 10% second mortgage and put down 10%. This way the very moment the second mortgage is paid off, its just gone. No BS to deal with. So long as the loan officer you use is good and gets you a loan with no early pay off penalties.
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Gasological
Member
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- '03 MSP #493
Also, as mentioned above, the real estate market is in a downturn. Housing prices are coming down, forclosures are WAY up, and properties are getting harder to offload (sitting on the market for months at a time). Condos are usually hardest hit by the offloading issues, less so by prices. This will certainly depend on your area, but odds are that you're going to lose equity in the condo by buying at current prices, and then double whammy, have trouble selling it in five years or so. My money is on rent for one to two years, pay off your student loans, and then, at the bottom of the market (it's going to slope off a little slowly, but it IS going to go down), buy a townhouse or something similar. (Or a condo, they're going to be DESPERATE to sell them then). Remember, when your f*cking cabbie is telling you something is a good investment GET THE HELL OUT because it's going to go down in flames soon. When almost everyone is telling you its a terrible investment, do some reasearch, it might be time to buy at the bottom.
