Does it make sense to take out a student loan to help make larger down payment on a home?

Answers:0   |   LastUpdateAt:2012-11-06 00:09:02  

Asked at 2012-09-24 03:56:02
My husband and I have a combined income of $ 160,000 a year and are planning to buy a house in the Boston area . Housing is very expensive here , and a two bedroom apartment goes for between $ 400 to 450.000 . We currently have about $ 30,000 to be used for the down payment. My dilemma is that my graduate school is offering me $ 20,000 in student loans over the next year and a half (I'm on a full scholarship ) at the rate of 6.8 % . I do not need them for their expenses , but does it make any sense for them to take to help with the costs of houses ( down payment, closing costs , or even furniture / decor ) . We will not have 20% less , but we are close to not having to pay PMI for long. MedlinePlus MedlinePlus Besides that I have $ 10,000 in student loans ( mostly variable rate , just consolidated at around 2.48% ) , we are completely debt free . We bought the car in cash , and not expect to have to replace in the short term ( a Honda 2005) . Our debt-to- income is very low and our credit is great . I am also eligible for $ 17,500 in loan forgiveness for a few years , as I am a special education teacher urban . It is also important to note that we work very safe and there are no plans to make major changes , such as Special Ed teacher for Boston Public Schools . MedlinePlus MedlinePlus What do you think ? We would like to buy soon , to take advantage of the market and the tax credit .
Answer1*****Answered at 2012-11-06 00:08:08
You have a $160000 a year income and you cant save up another $50000? My advice to you is to cut the waste in your monthly spending. What do spend in restaurants/clothes/movies/vacations a month? Look to where your money is going and then create a monthly budget and stick to it. Make saving up for you down payment a priority. You can save up more than enough for a down payment in about 12 months. I know you want a house really bad but make sure the house is a blessing and not a curse. Great job on paying cash for the car and like you said you are going to need money for decorating and upkeep after the purchase. By cutting your lifestyle a little bit now that will free up the money you were putting aside for the down payment every month to help you fund the decorating/repair funds that you will need to start as homeowners. Good luck.
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