Advice on Savings and paying off student loans

[KYbound]

So I am in my late 20's, married and just finished school. I've been working for about 2 years now. We are about to settle down (hopefully) with new jobs. We are both eager to buy a house but I am wondering if I should pay off my student loans first?
Here's the breakdown.

Income: Me 85K; Husband 45K now increasing to 85K over the next 2 years

Debt:
Only debt for both husband and I is my 22K Stafford Fed loan @ 6.5%

Assets:

High interest checking 30 K @ 3% (house savings)
Savings 1 - 13K @ about 1% ( Emergency fund)
Savings 2 25k @ < 1% (More house savings)
Stocks- taxable accounts- 21 K
Roth IRAs - 2 each at 12K

403B #1- 9K
403B #2- 12K

401K - 22K

TOTAL Assets- 156K

Our plan for this year is to max out our ROTH IRAs - 10 K
Max out(or close to max) my 403 B- 17K
Husband invest to match for 401K- $4k maybe extra ( also qualifies for pension)
My thought is to take from the house savings and pay off my school loan and then work on replenishing the house fund over the next 6-12 months. We'd like to buy in about 1 year or less.
Does this sound feasible?

Our budget is 250- 300K for home with 20% down so we'd need 60K

Also after we purchase our house and pay off my loans- where should we focus our extra income?
401K and 403 B will be maxed to limit; Roth IRAs maxed; then what?

I would greatly appreciate any thoughts or advice.

[humandraydel]

Personally, I would pay off the student loan immediately - 6.5% is a pretty good "guaranteed" return. I'd also boost your emergency fund to $20-25k. Then, continue saving for a house. The answer to "then what?" is that you are in a great position - just keep saving in taxable accounts.

Which brings me to the next question - do you really NEED a $300k house? You could be in an amazing position with a cheaper house - like, maybe paid off in 5 years?

[siggy_freud]

Which brings me to the next question - do you really NEED a $300k house? You could be in an amazing position with a cheaper house - like, maybe paid off in 5 years?

A lot of this may depend on where they live. $300,000 may be a lot of money where you're at, but perhaps where they are at it's a 1000 sq.ft condo. Without knowing their locale, it's difficult to determine if they really CAN go cheaper and get something nice.

[KYbound]

Thanks for the advice.
I'm trying to talk my husband into a cheaper house- I'm of course looking for deals, and for houses in the 200K range but we're not finding many that meet our wants. Our house will be our splurge. Plus we both have good credit so we're planning on getting an interest rate around 3.5%.

With an interest rate that low wouldn't it be better to invest (in taxable accounts) as opposed to pay off the house early?

[humandraydel]

Thanks for the advice.
I'm trying to talk my husband into a cheaper house- I'm of course looking for deals, and for houses in the 200K range but we're not finding many that meet our wants. Our house will be our splurge. Plus we both have good credit so we're planning on getting an interest rate around 3.5%.

With an interest rate that low wouldn't it be better to invest (in taxable accounts) as opposed to pay off the house early?

Semantics. Whether you invest or pay down the loan doesn't really matter - it's getting to the point where your non-retirement assets are more than the loan. But yes, mathematically, it is probably better to invest.

And admittedly, I did make a rather large assumption that "KYbound" meant you were buying a house in Kentucky and $300k sounds like a lot for Kentucky. Of course, you said couldn't meet all your WANTS for $200k, but can you meet all your NEEDS (and half your wants)? Either way, if you want to spend $300k I'm sure you can afford it.

[Goldy]

I might think about selling that stock to pay off that SL debt only because in two years your income will be much higher and you will be in a different tax bracket. That would also leave you enough cash to increase your EF a bit and save for a downpayment within a year.

As for what to spend your money on afterwards, I am a big fan of maxing out the 401k for you and your husband.