Payoff student loans or save for house?

**mndtrp** · 12-05-2011, 08:38 PM

Is this your first house? Buying a house has so many costs that most people don't think about. Down payments and meeting a monthly mortgage is one thing, repairs and tools are another. Mowers, hoses, higher utility bills, it could go on and on. Renting is not a bad idea, even if the monthly payment is similar.

First and foremost, though, I think you should get your emergency fund complete.

**peanut** · 12-06-2011, 11:13 PM

I've lived in bad neighborhoods before. I'd up and move now, but I'd rent, not buy. High crime is not where you want to be.

Paying off student loans and building an EF are higher priorities before buying another house. We didn't build our EF before buying a house and it took over 10 years to get a fully funded EF! Up until then we were always robbing Peter to pay Paul so to speak. Our CCs got a workout whenever there was an emergency. So yeah, get the EF in place before the house.

**GirlBoyGirl** · 12-07-2011, 08:47 AM

mntrp, no this would not be our first house but you are right about hidden costs, thats why I want to save as much money as possible before we buy our next house. I would like to cover all the closing costs and then have at least 20% down. I was hoping to have a big downpayment and then possible get a 15 year loan.

peanut, I should explain that our house is not in a high crime area. This city is very large in size and has very wealthy, neighborhoods and then very poor neighborhoods with gang activity and it is all the same district. So anyway, our house is a safe area but the schools my kids would go to are not safe.

**Sumacaroni** · 12-07-2011, 09:42 AM

I repeat the FFEF before buying a house advice, wish we had done it that way. My student loans are through the government and we're able to pay off early. I think $40K is too great a debt to focus on anything but paying them down but I guess it depends on your income-to-debt ratio if you'll qualify for the type of home loan you wish in order to purchase a home while carrying around a load of student debt.

Good luck whatever you decide!

**peanut** · 12-07-2011, 10:17 AM

In that case, stay put and go gazelle on the student loans. Here in Canada my DD and SIL can't even look at getting a mortgage until those a paid off. The banks won't even consider them. Sounds like things might be different in the US.

**GirlBoyGirl** · 12-07-2011, 10:43 AM

Originally Posted by peanut

In that case, stay put and go gazelle on the student loans. Here in Canada my DD and SIL can't even look at getting a mortgage until those a paid off. The banks won't even consider them. Sounds like things might be different in the US.

Wow, yes here in the states student loans are looked at as "good debt" and do not interfere with the home buying process. Also, our EF is fully funded now which is why we are looking at which to do next. We decided though to pay down the student loans and put a little towards the house at the same time. We would like to go ahead and list this house for sale, even if it sits for a long time, just in the off chance someone does want it then we will have at least closing costs.

Thank you everyone!

**tmffv** · 12-12-2011, 12:48 AM

Wow, yes here in the states student loans are looked at as "good debt" and do not interfere with the home buying process.

When we purchased our home this past spring, my student loan debt kept me from being on the mortgage. I had just graduated and was starting a new job soon, but that income could not be used yet for consideration. I had not other debt besides school loans. So my husband took the loan out in his name only.