Paying of loans

[DrReo]

I've been concerned about paying off student loans latley, the thought is constantly in my mind...

So, if one was to take about 300k out in loans. How long does it typically take to pay this off...? What's the typical income of a starting dentist in Texas/Midwest area? Also, what are typical interest rates for gov't and private loans.

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[sajjy]

I've been concerned about paying off student loans latley, the thought is constantly in my mind...

So, if one was to take about 300k out in loans. How long does it typically take to pay this off...? What's the typical income of a starting dentist in Texas/Midwest area? Also, what are typical interest rates for gov't and private loans.

DrReo, did you decide which school are you attending?

 

[yorkiepoo]

some people will be very frugal with themselves and pay it off in 5 years, while others will take 20+ years and pay it back slowly.

People will choose different paths. It depends on a lot of things... ie. where you are in life, if you are buying a home, if you have a 2nd income coming in, etc.

 

[DrReo]

DrReo, did you decide which school are you attending?

The title should say "off" and not "of", sorry.

I have not decided at this moment... I'm contemplating the HPSP scholarship.

 

[DENTEYE]

What are the issues in applying for a home loan with a job after graduation having to pay school private loan too. I heard that when we have a school loan we cant apply for a home loan. Pl clarify.

 

[pietrodds]

A little advice... think long and hard about not doing the HPSP. The military is not for everyone but if you think you can hack it there's something to be said about being debt free and even a little stash in the bank after 4 years following dental school. The debtload is right now for new grads is brutal and only going to get worse. Older dentists aren't retiring in droves and the opportunities aren't there like many think.

A second piece of advice... don't worry about buying a practice until you're out doing what you forsee yourself doing for the next 10 years. So if you plan to buy a practice, don't buy a house til that happens. Banks do look differently at student loans but that could change.

 

[texas_dds]

i disagree - i think its better to get a home loan before you are a solo practitioner. mortgage people would much rather look at a W2 from an associateship than making you jump through hoops proving self employment income (they make you have 2-3 years of numbers from your own business before they will consider it solid income)

 

[pietrodds]

i disagree - i think its better to get a home loan before you are a solo practitioner. mortgage people would much rather look at a W2 from an associateship than making you jump through hoops proving self employment income (they make you have 2-3 years of numbers from your own business before they will consider it solid income)

recent times have shown that a house is definitely not a solid investment strategy. A practice however is definitely a sound investment and will make you money. You also have to factor in that if you buy a house and your first job doesn't work out long term which happens over 90% of the time you'll have a restrictive covenant to not work in that given area... I've been down this road myself. If you bought a house, you're stuck living where you can't work when things go south. Almost all dentists out of school have a bumpy road getting into private practice and you're trying to manage school loans on top of that usually. Even if you have to rent for a year or two while the banks determine you a good candidate for a loan after you buy a practice, it's no big deal. In fact, you'll be better off because you'll have a good idea about what kind of house you can afford once you get your practice running the way you want.

Simply put, a house is not a good investment and a number of investment books will show you that long term you could be better off putting the money save from renting into mutual funds. There are benefits to home ownership and I'm not saying not to do it but do consider doing it because of some perceived notion that it's a great investment. The last 5 years everyone jumped on the bandwagon thinking buying real estate was a no brainer and look what happened. If you still feel that strongly, you can do what my friend did and sign a mortgage the day before you buy a practice because the previous poster is correct in that the banks take into consideration your W2s from you job.

I made this mistake myself and own a house, have no practice, and am excluded from practicing in my area where I live.