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Discussion Starter · #1 ·
I have relocated for work and they offered a lot of relocation benefits. One of these is paid closing costs for the purchase of a new home. My wife and I still have about 63,000 in student loan debt. (60K of this is hers, 3K is mine, which we will pay off in about 10 days)

With rates on 15 yr fixed mortgages where they are, and paid closing costs through the company, is it worth it to buy a home (offer on closing costs is only good through the end of the year) or continue piling the free cash on the student loan debt?
 

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Can you treat the mortage as rent? We are military. We rent in places that we know we will be less than 3 years. Places that we will be 3 or more, we buy. We pay nothing down and treat it as rent. So if a mortage is less than rent, go for it. If you are going to pay a premium be careful. Keep in mind that you should be able to rent out your place in case you have to move. Make sure your job is secure.
 

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Is there a limited time offer on the closing costs payment?

If you've never owned a home before, you need to understand that owning a home carries with it all kinds of expenses you won't be expecting or thinking about, which can really put a damper on the debt snowball.

Generally speaking I think it's a better idea to get out of debt completely before you buy a new home. If that means you pay the closing costs instead of your employer, that, in my book, is a better option than buying a house, having your employer pay a few grand for you, then your furnace goes belly up and you're out 10k out of pocket that you don't have cause you weren't debt free and didn't have a fully funded Emergency Fund first.
 

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Is there a limited time offer on the closing costs payment?
(offer on closing costs is only good through the end of the year)
 

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I think the closing costs are something that you can actually get the seller to pay, so to me, that perk doesn't necessarily scream "go buy a house."

There's lots of other things that would come into play, like how much you make, how long it would take you to pay off the student loan, how likely you are to stay in the area and how expensive the house that you want is.

And are the student loans your only debt?
 

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Discussion Starter · #6 ·
Student loan debt is our only debt. We have paid off about 158,000 (including selling a previous home in our old location) in about 18 months. We make about 100K take home. Right now we are able to shovel about 3,500 a month at debt.
I hadnt thought about the seller paid closing costs, we had arranged for that in our last home. Thanks everyone. More input is certainly welcome.
 

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The 100k is both you and your spouse combined, yeah? Considering how much you and the spouse have paid off and how much money you have to work with, I'd consider buying. But, I'd probably look for something that could be handled on half your income, just to be safe. If there's a chance that one of you might become unemployed by choice or not so much by choice, it will be nice to have the flexibility. Plus I you get something that's reasonable based on a 100k income level, your student loan payoff will slow down a lot. Plus if you have to move again you're not going to want to be stuck paying a ginormous mortgage on a house you can't live in.

Ive done the math on a 30 vs 15 year mortgage and paying a 15-yr payment on a 30 yr mortgage equals almost exactly the same if the interest rates are the same. Be sure to do the calculations for the whole cost of the loan based on the interest rates at each term. If the interest rate isn't a lot better for a 15 year vs a 30 year, it might benefit you to just get a 30 year mortgage and pay on it like a 15 year mortgage so that if times get lean you can drop your payment amount without worrying about losing your house.

Anyway that's what Id probably do. Consider buying a house, but small house, and do it cautiously. And the only reason I'd do that is because youve already been at the debt paydown thing for so long. It seems like you are level-headed enough not to mess up, but you still have old man economy to worry about, you know?
 
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If I were in your shoes, I wouldn't let the 63K student loands stop me from buying a house, but I would consider all the other stuff first - how long are you going to live there, do you want to handle the extra upkeep associated with a house, etc. It sounds like you've owned a house before so you should have a pretty good handle on those questions, and a good understanding of all the other things that go along with home ownership.

After that, if you still want a house, I'd try and buy before the end of the year - but if I didn't see anything I liked, I'd hold out rather than just settling in order to get the free closing costs.
 
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