Pay down school loans, mortgage or SAVE?

[abowers]

Re: Pay down school loans, mortgage or SAVE?

Thanks! :-)

[nixuzer]

Re: Pay down school loans, mortgage or SAVE?

Everyone has really good points and they are exactly the things that I've been struggling with! One day, I think about how low the interest rate is on the school loans and how I am actually making money by keeping it in savings rather than paying off the loan. However, I hate the feeling of that debt hanging over my head and having to make that payment every month. However, since we've acheived "Prepaid Status", we would actually have some time to pay it if things got rough for a few months. But, I was especially thinking that after we move, our mortgage will be higher than it is now and it would be nice to have fewer monthly bills. But, I also know it is important to have a good down payment saved up just in case the timing of selling our condo and buying our house doesn't work out as we have planned. I need to win the lottery- that would definitely solve this question! :

A little late to the game here but a couple of things.

Not sure about your earlier statement about parents giving money as a down payment on another house then paying them back when you sell the condo as well as taking the job and making the house purchasing decision based on the that. You are in effect doubling (if the condo and new house are priced the same) your mortgage liability for what reward? We've moved quite a bit in our 15 year marriage (average once a year for the first 10 years) and always rented at first in a new city until we got the lay of the land then we decided if it was better to keep renting based on my job future or pick the right area to buy the house. This would significantly reduce your risks. Also lets say you buy the house and the employer has some problem and decides not to hire your husband after going through everything your stuck with a nice mortgage but if your family is there you'll probably stick it out (which hopefully has a lot of opportunities for him).

On the issue of order of bills why not wait, sell the condo apply whatever equity you get towards your remaining bills and as other posts recommend just put what extra cash you have towards your savings account. You're about to make two of the biggest life changes (job & move) and you need to make sure you've got a lot of cash for any unforseen things. Then once you get settled in at your new place, paying rent, you can decide how to knock stuff off, we followed the Dave Ramsey Debt Snowball to get out of debt but you'll decide what you want to use. When we did a similar situation we lodged with my parents for a few months and saved big $$ (not sure if that is a doable scenario for you). Paid them a little rent/food/utils to offset our being there plus everyone got even closer, we walked away from that few months with a nice savings and a deeper relationship with my parents.

One note though, make sure that agreement to live with your parents is in writing so there are no bad feelings...how much you'll contribute and how long you'll be there. We determined that anything over what they were paying for food & utilities currently as well as $### of their current mortgage.

UPDATE: Forgot to mention that rent should be much less than what you'd pay for a mortgage in the new city. We never paid more than 75% of what we planned for a mortgage when we moved, sometimes it took a little looking and a little longer commute time but in the end we really won. You're not planning on getting a rental to impress your friends so keep the overhead low.

[khorovetsyelena]

Re: Pay down school loans, mortgage or SAVE?

It depends how soon are you planning to buy the house. If you plan to buy it in lets say 6 months from now. The first 3 month pay as much as you can into mortgage then the school loan cause they have interest and it adds up. Then start saving for the down payment. And in case of emmergency that you will have to move sooner that the time you thaught, you can borrrow your parents money. Thats what I would do.