I'm looking to buy a house in the next 9 months. I owe about 4K on my college loan.
Should I pay off my school loan, or have a downpayment of 4k more?
I have good credit, and very little debt besides.
TIA!!
bride04
Posted:
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Re: Pay off school loan, or save for downpayment?
i'd keep the $ for the down payment
skew
Posted:
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Re: Pay off school loan, or save for downpayment?
is there anyway that you can save towards the downpayment and pay off the loan?
if you definetly plan to buy a home in 9 months, i would suggest scrimping and saving every penny. very often, the more you can offer as a downpayment, the more attractive you are to the buyers.
i.e. if you find a home for 400,000 (which we all know is very hard pressed), w/ 4k, you will only have 1% to offer as a down payment. in my experience, 10+% is the norm.
ETA: assuming you received wedding money, why don't you use it towards a downpayment?
ppwbride
Posted:
Member since
Re: Pay off school loan, or save for downpayment?
It depends on your interest rate - Usually student loans have a very low rate and therefore it doesn't make sense to pay them off early. You're better off saving/investing the money you'd use to make the extra payments. If it were credit card debt, my advice would be different and I'd say to pay it off since rates are higher.
May152005
Posted:
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Re: Pay off school loan, or save for downpayment?
I agree, that it depends on your interest rate, most student loans have a much lower interest rate than any mortgage, so it's best to start saving the money for the dowpayment & slowly pay off the loan, since you probably have a fair interest rate locked in.
StepherG
Posted:
Member since
Re: Pay off school loan, or save for downpayment?
Posted by skew
is there anyway that you can save towards the downpayment and pay off the loan?
if you definetly plan to buy a home in 9 months, i would suggest scrimping and saving every penny. very often, the more you can offer as a downpayment, the more attractive you are to the buyers.
i.e. if you find a home for 400,000 (which we all know is very hard pressed), w/ 4k, you will only have 1% to offer as a down payment. in my experience, 10+% is the norm.
ETA: assuming you received wedding money, why don't you use it towards a downpayment?
I only put down 3% on my first house. Lately that is the norm!
littlecat
Posted:
Member since
Re: Pay off school loan, or save for downpayment?
I would definately keep the money for a down payment.
skew
Posted:
Member since
Re: Pay off school loan, or save for downpayment?
Posted by StepherG
Posted by skew
is there anyway that you can save towards the downpayment and pay off the loan?
if you definetly plan to buy a home in 9 months, i would suggest scrimping and saving every penny. very often, the more you can offer as a downpayment, the more attractive you are to the buyers.
i.e. if you find a home for 400,000 (which we all know is very hard pressed), w/ 4k, you will only have 1% to offer as a down payment. in my experience, 10+% is the norm.
ETA: assuming you received wedding money, why don't you use it towards a downpayment?
I only put down 3% on my first house. Lately that is the norm!
really? thanks, that is good to know. doesn't really help us now though because DH and i have been saving for 3 years and have managed to allocate 20% of our high range as a down payment.
DH sister is looking for a home as well and i keep telling her that she needs at least 10% to offer as a down payment. i will pass this info on to her.
thanks again!
BlazeSyth
Posted:
Member since
Re: Pay off school loan, or save for downpayment?
Posted by skew
i.e. if you find a home for 400,000 (which we all know is very hard pressed), w/ 4k, you will only have 1% to offer as a down payment. in my experience, 10+% is the norm.
ETA: assuming you received wedding money, why don't you use it towards a downpayment?
Oh; there certainly is more than the 4k for the downpayment. All of the wedding money, plus other savings. It just hurts knowing that I'm so close to having the loan paid off...
