debt regret
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Anonymous
| 200k in student loans. 135 salary. DC metro. Will I ever be able to afford a home? |
Anonymous
| Signs point to no. |
Anonymous
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Of course. You will own a home while servicing the debt. My DH and I love my student debt because I pay 3.5% on it while we make more on any other money in the market. And we own a home.
You don't aim to get rid of student debt before buying the home. You simply make sure you have the lowest rate possible on the student debt and always pay on time. It's not like credit card debt. |
Anonymous
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I'm in a similar-ish situation. Just about double the debt and double the income (there are two of us). We made the choice a couple years ago to save a lot of money, both to pay down the loans and to save up for a downpayment. That means we track our spending religiously (hurray for mint.com!), almost never eat out (lunch or dinner), and haven't been on any real vacations in a couple years. I don't buy much in the way of new clothes, we drive a cheapo car, and my laptop is from 2008.
But we've already cut the student debt down by a over a third in 3 years. And I'm making plans not just for the house I want to buy, but the new jobs open to me when I can afford to make less money because I no longer have student loan payments. |
Anonymous
| 12:13, why are you looking to pay it down so quickly? Are your rates bad? |
Anonymous
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questions for you OP:
Do you have kids? daycare? What other debts do you have? Have you listened to or read people like Suze Orman, Dave Ramsey or Michelle Singletary for advice? What are you paying now toward your debt, per month? What are your interest rates? What are you saving? do you have an emergency fund? I second mint.com as an expense tracker. Just as an aside, 10 years ago I finished grad school with about $90k in debt and we were both making about $150. The payment was about $800 a month, and I doubled it for 5 years to about $1700 to get rid of the high interest private loan piece as soon as aI could. I now have about 30k at less than 2% interest, and it is only $157 a month. I own a home too, and make more now. No other debt. It is possible, just start somewhere, make a plan and pay it down! Debt snowball!!!!!!!!!! |
Anonymous
What do you do for living? Do you have good prospects for salary increases/bonuses? |
Anonymous
| My rule of thumb is that your starting salary should be at least double your student loan debt when you graduate. |
Anonymous
| 150k student loan debt, 75k salary, 2k cc debt, just bought a house for 250k, and mortgage cheaper than my rent was (live in DC). I never thought I would own a home too, I just kept paying down the cc debt to raise credit score. So happy now. |
Anonymous
What fantasy world are you living in? |
Anonymous
Congratulations on your new home! I am looking in that price range, too -- what part of town did you buy in? |
Anonymous
What if it's zero? Isn't zero mulitpied by anything zero! |
Anonymous
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Anonymous
This sounds crazy to me because the student loan debt is so high relative to income. Were these federal student loans on an "income-based repayment plan? For me, I wouldn't be comfortable with the high debt to income ratio here. But at the same time, I am kind of envious if you did manage to take advantage of "income based repayment" programs, and go to a better school that you could have afforded otherwise. (It would annoy me though, for folks to get a career ladder advantage over me, who compromised on schools because I didn't want huge student debt...... my student debt was closer to half my starting salary when I graduated and I've worked to pay it down.) |
Anonymous
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We owe more than this and we own a home. DH and I originally owed $315,000 together. That was about 9 years ago. We started out with DH only having a job for a year, making about $45,000. I followed him to a new city, and it took me a year to find a paying job. DH did get $50,000 in loan repayment fom the first job. Over the next 9 years we paid off about $75,000 of his loan and he owes about 30,000 now.
I still owe 142,000, but I'm in no rush to pay it off since I'm in an income based federal loan repayment program. We make about $200,000 now and own a $650,000 home. We purchased the home 2.5 years ago, and we didn't have any problem qualifying for a mortgage. Our student loan payments are about 1,300.00 per month. In six years, we will have completed our 10 years of public service in the program and the federal government will pick up the tab on the rest ($100,000 collectively). You didn't say how long you intend on paying the loans back. We're glad we didn't wait until they were paid off to buy as we're getting equity in our home now. Also, I wouldn't be scared off from total debt vs starting pay. People's salaries generally go up over time. We just deferred payment in the really lean years. If you like public sector work, the pay and hours are great and you can't beat the income-based loan repayment. We have young children now, and working 40 hours a week has made our family life much easier. Good luck! |