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I am wondering what order I should go with?
Following choose are in the condition of:
Student Loan- prox. 8% interest
House- prox. 400K/5.25%
Retirement- prox. 7% return
(if delay the house buying, rent is prox. 1100/month)

1) Pay off student loan first than buy a house (with small down, overpay min. each month) save small amount for retirement?
2) Save large amount for retirement, buy house(with small down and min. payment) than student loan (min. payment)
3) Distribute even towards all three subjects.
4) Buy a house while paying off student loan. Save small amount towards retirement.
5) Do everything together and pay all of them off slowly together through out 30 yr?
6) Or…any other suggestions?

thanks

2 Thoughts on Go in what order? Student loan, house, savings?
  1. Reply
    SundaeG1rl
    February 26, 2014 at 11:48 pm

    Hmmm….would buying a house make you financially better off? I mean, would mortgage payments be less than your rent? That’s something to consider. I’d pay off the student loan first and fast (because their rates are a joke) – clear the debt from your past before racking up a new one. Then I’d think about the future, house and retirement and all that.

  2. Reply
    Rush is a band
    February 27, 2014 at 12:31 am

    So you didn’t really give us enough information to give you good advice.

    We need to know how much the balance on the student loan and the term (number of years).

    We need to know how much other debt you have and the rates that go with it. Car loan? Personal loan? Credit card balances and interest rates?

    Unless you are making approximately $ 160,000 per year, your goal of having a $ 400,000 house is out of line. Your house should be ~2.5x your gross annual income for it to be affordable.

    Your house will most likely be your single largest purchase. The general thumb rule is to take out a mortgage between 2x and 3x your gross annual salary.

    Peeling the onion back one layer, you should try to live within the 28/36 rule. No more than 28% of your gross monthly income should go to a housing payment. That housing payment has to include principal, interest, taxes, insurance and PMI (if necessary – put down 20+% and it isn’t necessary).

    No more than 36% of your gross monthly income should be in installment debt (total of all of your monthly payments), including your mortgage, your car, your student loans, your credit card minimums, etc. If the payment on your student loan impacts your ability to borrow for a mortgage, then you should work on paying that off.

    Retirement should take advantage of any employer match that is available (If they match up to 6% of your income, put aside the 6% and get the match).

    I personally bought my house before my student loans were done. Then I shifted the student loan amounts into retirement.

    good luck!

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