questions about trump's student loan plan

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asian pharm

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I have a question about trump's student loan policy.

I m currently on the IBR plan with 10-15% of my discretionary income going towards student loan for 20 years, and rest to be forgiven. Now, trump has said that he is going to consolidate all the options out there (IBR,PAYE,ICR etc) to one where borrowers have to pay 12.5% of their discretionary income and the rest of the debt will be forgiven after 15 years. Now, here are my questions:

1) Did the above policy (12.5% of your income for 15 years, rest of the debt forgiven) already come into effect? If so, my loan servicer has not said anything about this!

2) What is the clause on the debt being forgiven? (is it going to be taxable? if so at what rate)

3) If I m on IBR and making regular payments and my loan is in good standing, then is that going to effect the amount I can borrow for buying my first home? I have 160K in student loans, all pharmacy school's debt......I did not had any undergrad loans.

Thank you all....Any feedback is appreciated.
 
6GodPharm said:
Just pay them off asap. Crazy how people resort to minimum payment and think it'll be forgiven 20 years from now. You have no idea whats going to happen tomorrow let alone 20 years from now.
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That's what I'm doing. In 23 years from now the most likely president and those in Congress will probably be in a similar situation as us as they will be from our generation. You could probably expect they'll support some kind of legislation pushing for leniency for those who owe a bunch of student loans. Yes it's a gamble but if it doesn't happen I have my own back up plan.

Instead of making full payments now on student loans I'd rather save for a home and end up renting a few rooms out to others.
 
That's cute you think that the elected officials will give to toots about what you're going through now or in 20 years. They are going to be trust fund kids from our generation that had everything handed to them. The ones that actually worked for what they had will either be in too small a minority to do anything or forgotten their struggle
 
asian pharm said:
I have a question about trump's student loan policy.

I m currently on the IBR plan with 10-15% of my discretionary income going towards student loan for 20 years, and rest to be forgiven. Now, trump has said that he is going to consolidate all the options out there (IBR,PAYE,ICR etc) to one where borrowers have to pay 12.5% of their discretionary income and the rest of the debt will be forgiven after 15 years. Now, here are my questions:

1) Did the above policy (12.5% of your income for 15 years, rest of the debt forgiven) already come into effect? If so, my loan servicer has not said anything about this!

2) What is the clause on the debt being forgiven? (is it going to be taxable? if so at what rate)

3) If I m on IBR and making regular payments and my loan is in good standing, then is that going to effect the amount I can borrow for buying my first home? I have 160K in student loans, all pharmacy school's debt......I did not had any undergrad loans.

Thank you all....Any feedback is appreciated.
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Payoff off your loans ASAP. You must be in fantasy land if you think the government will forgive your loans. With this new tax plan, the government will be over $10 trillion in debts.
 
asian pharm said:
I m currently on the IBR plan with 10-15% of my discretionary income going towards student loan for 20 years, and rest to be forgiven.
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Please check you Master Promissory Note and Income-Driven paperwork to see if it reflects 25 or 20 years. I'm pretty sure you have some graduate/professional loans in your student loan mix. These are treated differently in terms of (longer) forgiveness, just like they are treated differently in terms of (higher) interest despite graduate students being more likely to find jobs and less likely to default.

The President has reversed his policy on student loan forgiveness for graduate students. At a campaign event in October 2016, then candidate Trump announced that he wanted to allow all borrowers to pay 12.5 percent of their incomes on federal loans and receive loan forgiveness after 15 years. His budget request to Congress in May 2017 lengthens the loan forgiveness mark for borrowers with any amount of debt from graduate school to 30 years, but shortens the term to 15 years for borrowers with only debt from undergraduate studies. There is a need for clarity on how existing borrowers would be treated if they entered into the Unified IDR offered to new 2018 borrowers. Tax treatment of loan forgiveness under the Unified IDR has not been addressed specifically which means it will likely continue as taxable.

The information below is for reference only. Verify against your MPN and IDR documents.
There are notable differences for pre-2007 & post-2014 borrowers.
  • For REPAYE: Balances for graduate and professional degrees, or a combination of graduate and undergraduate degrees, are forgiven after 25 years of eligible payments. If you only have only undergraduate loans this would be 20 years.
  • For IBR: 25 years if you’re not a new borrower on or after July 1, 2014.
  • For PAYE (only applies to new borrowers as of 2007): 20 years.
  • ICR Plan: 25 years.
 
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1. no
2. no legislation has been passes- so who knows
3. yes - all debt reflects how much you can borrow for a home. If you are worried about being able to borrow enough for a home, you are looking at too expensive of a home

lesson from politicians - never trust what any of them say, Trump (or Obama, or anybody) can't just change the rules, it takes congress, which over the years has shown us how inept they are.

Plus - who knows what will happen 15 years from now when the terms are up and it is "forgiven" I am sure the law will change 5 times between now and then.

Lesson - just pay off the dang loans - that is the one thing you can control, I wouldn't bet on things staying status quo.
 
74777 said:
That's what I'm doing. In 23 years from now the most likely president and those in Congress will probably be in a similar situation as us as they will be from our generation. You could probably expect they'll support some kind of legislation pushing for leniency for those who owe a bunch of student loans. Yes it's a gamble but if it doesn't happen I have my own back up plan.

Instead of making full payments now on student loans I'd rather save for a home and end up renting a few rooms out to others.
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Yes, so I have 90k saved in 3 years, so far, by just living low key and being a good saver. At this point, I have been trying to decide on the million dollar question of buying a 2 bed 2 bath condo for like 200k avaialble in my area. I was gonna put all the 90K in down payment and only take a loan for 110K, and pay it off soon.
I am single and preferably stay single for years to come, and have no kids, so plan to rent out the other two rooms.

Now, the important question that I have been asking myself and others since past many months is this: Should I pay all of this 90K, in student loans and bring it down to 70K, or take another 110K in loans and buy a house and rent out the other two rooms. I have talked to manly people and everybody is saying different things, and I am really frustrated upon myself now for not being able to decide on this since almost 10 months now.
I have been actively looking for houses and know the basics of that now.
Can anyone give me some feedback?

Also, I want to mention that I work for Pharmaceutical industry and make only 72K. I worked for retail for a year, untill my feet gave up, and am very happy with my curent job. Its very interesting and there is a lot to learn and explore, Plus its a M-F 8-5, and no weekends shifts.
 
Another thing you could do is use your home equity to pay off your student loan. In that way you can benefit from the mortgage interest deduction on the balance of your student loans. As it stands our pay is too high to take advantage of the student loan interest deduction. Paying off student loans first isn't a bad idea but care, economy is booming and healthy and i expect inflation to pick up soon. Once that happens home prices will go up further. Pharmacist pay is hardly growing and it would be wise to participate in asset appreciation that comes along with rising inflation once or when that happens.

No one ever got rich paying off their student loans but many have made hundreds of thousands off home value appreciation. sort of a gamble lol

Now I'm a relatively new graduate so my advice will differ from those of all these other grumpy old men, but keep in mind many of them have made tons of $$$ from their homes and would probably prefer you not be as successful as them
 
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74777 said:
Another thing you could do is use your home equity to pay off your student loan. In that way you can benefit from the mortgage interest deduction on the balance of your student loans. As it stands our pay is too high to take advantage of the student loan interest deduction. Paying off student loans first isn't a bad idea but care, economy is booming and healthy and i expect inflation to pick up soon. Once that happens home prices will go up further. Pharmacist pay is hardly growing and it would be wise to participate in asset appreciation that comes along with rising inflation once or when that happens.

No one ever got rich paying off their student loans but many have made hundreds of thousands off home value appreciation. sort of a gamble lol

Now I'm a relatively new graduate so my advice will differ from those of all these other grumpy old men, but keep in mind many of them have made tons of $$$ from their homes and would probably prefer you not be as successful as them
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Bad bad bad idea. No. No no. If you loose your job and can't pay your mortgage. You lose your house and your equity. If you leave the debt as student loan debt. What are the creditors going todo? Take your degree away?
 
Dred Pirate said:
Bad bad bad idea. No. No no. If you loose your job and can't pay your mortgage. You lose your house and your equity. If you leave the debt as student loan debt. What are the creditors going todo? Take your degree away?
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Yes and you can lose your job as well. I'm sure you own a home. If i lose my job I pay $0 per month as part of my repayment plan.
 
74777 said:
Yes and you can lose your job as well. I'm sure you own a home. If i lose my job I pay $0 per month as part of my repayment plan.
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I don't get what you are saying. By your argument you should leave the debt on the student loan not transfer to a home equity loan. But your previous post says otherwise.
 
]Yes and you can lose your job as well. I'm sure you own a home. If i lose my job I pay $0 per month as part of my repayment plan. Look your ideas make sense for the 1980s. This is 2017 and there is a new ballgame in town.
 
74777 said:
]Yes and you can lose your job as well. I'm sure you own a home. If i lose my job I pay $0 per month as part of my repayment plan. Look your ideas make sense for the 1980s. This is 2017 and there is a new ballgame in town.
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you make no sense. If you loose your job. Your student loans go to zero if on irb and u keep your house. If you use a heloc to pay off your loans. You loose your job, then you loose your house because you can't pay the mortgage.
 
Dred Pirate said:
you make no sense. If you loose your job. Your student loans go to zero if on irb and u keep your house. If you use a heloc to pay off your loans. You loose your job, then you loose your house because you can't pay the mortgage.
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If equity in the house is used to pay off student loans payment of student loans is not an issue as there will be none. All that is left is the possibility of losing one's job, which doesn't just apply to me or asianpharm, but to everyone else as well. You took the risk and benefited from it I'm guessing, why can't asianpharm?
 
74777 said:
If equity in the house is used to pay off student loans payment of student loans is not an issue as there will be none. All that is left is the possibility of losing one's job, which doesn't just apply to me or asianpharm, but to everyone else as well. You took the risk and benefited from it I'm guessing, why can't asianpharm?
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You make no sense, I think you are very confused or do not communicate in English very well....dred pirate is correct.
 
@ Asian pharmacist: dead pirate speaks the truth. 867775309 is fake news.
 
74777 said:
If equity in the house is used to pay off student loans payment of student loans is not an issue as there will be none. All that is left is the possibility of losing one's job, which doesn't just apply to me or asianpharm, but to everyone else as well. You took the risk and benefited from it I'm guessing, why can't asianpharm?
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you are 1. a troll
2. don't understand what I am saying - if you pay off the house using equity - yes - you have no student loans, but you now have a home equity loan - you know you have to pay that????
 
Dred Pirate said:
you are 1. a troll
2. don't understand what I am saying - if you pay off the house using equity - yes - you have no student loans, but you now have a home equity loan - you know you have to pay that????
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You and the other grumpy old man have mortgages to pay off. What is the difference?
 
It blows my mind that there are pharmacist's making $120,000 a year who are making minimum payments on their student loans. Those are the people who do not deserve a dime in forgiveness.
 
BenJammin said:
It blows my mind that there are pharmacist's making $120,000 a year who are making minimum payments on their student loans. Those are the people who do not deserve a dime in forgiveness.
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I did for years - but then again interest rates were 1.7% - if I was smart, I still would have paid more. But then again, my payments are less per month now than if I actually did a forgiveness program
 
Dred Pirate said:
I am pretty sure I can talk more sense into my dog

PS - far from old kid
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Not surprised you would attempt to talk to your dog in the first place. Dogs don't understand english you silly


the OP wants to take out a 110k mortgage and pays 600-700 every month on student loans. the dti calculation is low and the op is not overextending. there is risk in buying a home obviously but this is a case where the risk does not exceed the risk you took when you bought your first home. the op would also get the benefit of mortgage interest deduction on the balance of student loans, asset appreciation (pharmacist wage growth is terrible), saving on rent payments. lastly the op would be renting out rooms to others. why are you suggesting this is worse of an idea than of you buying your first home? this is purely a number's game and right now it is in favor of the op
 
74777 said:
Not surprised you would attempt to talk to your dog in the first place. Dogs don't understand english you silly


the OP wants to take out a 110k mortgage and pays 600-700 every month on student loans. the dti calculation is low and the op is not overextending. there is risk in buying a home obviously but this is a case where the risk does not exceed the risk you took when you bought your first home. the op would also get the benefit of mortgage interest deduction on the balance of student loans, asset appreciation (pharmacist wage growth is terrible), saving on rent payments. lastly the op would be renting out rooms to others. why are you suggesting this is worse of an idea than of you buying your first home? this is purely a number's game and right now it is in favor of the op
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I never said don't buy a house, I said don't use the equity in a home to pay off loans - 2 completely different things
 
Dred Pirate said:
I never said don't buy a house, I said don't use the equity in a home to pay off loans - 2 completely different things
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you just told the op to pay off the loans as well as everyone else in this thread. is no one running the numbers here or are pharmacists just terrible with numbers

oh i get it. good at english, terrible with numbers. fair enough
 
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74777 said:
Not surprised you would attempt to talk to your dog in the first place. Dogs don't understand english you silly


the OP wants to take out a 110k mortgage and pays 600-700 every month on student loans. the dti calculation is low and the op is not overextending. there is risk in buying a home obviously but this is a case where the risk does not exceed the risk you took when you bought your first home. the op would also get the benefit of mortgage interest deduction on the balance of student loans, asset appreciation (pharmacist wage growth is terrible), saving on rent payments. lastly the op would be renting out rooms to others. why are you suggesting this is worse of an idea than of you buying your first home? this is purely a number's game and right now it is in favor of the op
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This is what I do not get. Why not use the majority of the money to pay off the loans and use some as a down payment for the house? If you take money out of your house, you are going to have to pay for (1) fees and (2) interest rate would be higher. It is not worth the hassle and the risk.

Considering the OP is making < $90 k a year, he is going to have this debt around his neck for many years. The pharmaceutical industry is not that stable as well. It is not worth the risk.


Sent from my iPhone using Tapatalk
 
74777 said:
you just told the op to pay off the loans as well as everyone else in this thread. is no one running the numbers here or are pharmacists just terrible with numbers

oh i get it. good at english, terrible with numbers. fair enough
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quote me where I told the OP to pay off his student loans and not buy a house? I said it is a horrible idea to take a home equity loan for the sole sake of paying off student loans,

dang you don't listen
 
Dred Pirate said:
1. no
2. no legislation has been passes- so who knows
3. yes - all debt reflects how much you can borrow for a home. If you are worried about being able to borrow enough for a home, you are looking at too expensive of a home

lesson from politicians - never trust what any of them say, Trump (or Obama, or anybody) can't just change the rules, it takes congress, which over the years has shown us how inept they are.

Plus - who knows what will happen 15 years from now when the terms are up and it is "forgiven" I am sure the law will change 5 times between now and then.

Lesson - just pay off the dang loans - that is the one thing you can control, I wouldn't bet on things staying status quo.
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If this is your response to the OP's question, the OP is gonna take it that you are suggesting to pay off loans first, then to buy a house. You're attempting to play with words but you might want to move beyond that as it's getting childish (aren't you supposed to be a old grumpy man?).

Wasn't necessarily suggesting the OP take out a HELOC although it is an option. I was suggesting it for the interest deduction (student loans not deductible with our income). Might work better with private loans as opposed to IBR government loans. I would suggest the OP look further into it to see if he/she would benefit from it (I would specifically benefit from it given my financial circumstances).
 
BMBiology said:
This is what I do not get. Why not use the majority of the money to pay off the loans and use some as a down payment for the house? If you take money out of your house, you are going to have to pay for (1) fees and (2) interest rate would be higher. It is not worth the hassle and the risk.

Considering the OP is making < $90 k a year, he is going to have this debt around his neck for many years. The pharmaceutical industry is not that stable as well. It is not worth the risk.


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For many people on IBR, 15-25 years of reduced monthly payments will not pay off the entire loan. It would be counterproductive to enroll in a repayment program that won't fully pay off the student loans while still attempting to make extra payments to pay it off (as you suggested). If the OP still made extra payments, he/she would ultimately lose that money after 20 years. In this scenario it's either make minimum IBR payments for 20 years or disenroll from the program and attempt to pay if off fully asap (I'm suggesting the former).

72k income
190k student loans

~150k will be paid off after 20 years on IBR. if assuming the remaining amount is taxed, ~50k additional payment after 20 years. Total: 200k --> this is an entirely reasonable amount to pay after 20 years on an original amount owed of 190k. This is also not taking into account the scenario that the remaining amount may be entirely forgiven after 20 years. We have people in Congress who are unaware of the current financial landscape of student loans yet much progress has been made on that end. Imagine in 20 years when a significantly larger amount of the population is indebted with student loans and those in Congress will more likely understand the situation and/or have firsthand experience with it. Either way is palatable; win-win.

For the OP's case, we are talking about a situation where his/her payments on IBR will lead to less paid after 20 years than if he/she were to attempt to pay it off fully after 5 years. In the meantime, the OP can save on rent, make profit from renting out rooms, deduct mortgage interest and property taxes, asset appreciation (God when does it end?), and experience a few other joys of owning a home.

Remember, one of the motivations for the introduction of IBR is to encourage home ownership for those with students loans. If you don't take the hint you will get left behind. Right now, inflation is unusually low, and with Trump's policies it is threatening to pick up. With pharmacist wages stagnant, it would be wise to participate in asset appreciation. Once inflation picks up you can say goodbye to owning a home for years until the next recession/financial crisis.

As for the OP working in the pharmaceutical industry -- are you suggesting those working in industry should not buy homes? That is for the OP to assess. For all we know the OP may have been working there for who knows how long.

(these numbers are off the top of my head* the OP knows his/her financial situation best)
 
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asian pharm said:
I have a question about trump's student loan policy.

I m currently on the IBR plan with 10-15% of my discretionary income going towards student loan for 20 years, and rest to be forgiven. Now, trump has said that he is going to consolidate all the options out there (IBR,PAYE,ICR etc) to one where borrowers have to pay 12.5% of their discretionary income and the rest of the debt will be forgiven after 15 years. Now, here are my questions:

1) Did the above policy (12.5% of your income for 15 years, rest of the debt forgiven) already come into effect? If so, my loan servicer has not said anything about this!

2) What is the clause on the debt being forgiven? (is it going to be taxable? if so at what rate)

3) If I m on IBR and making regular payments and my loan is in good standing, then is that going to effect the amount I can borrow for buying my first home? I have 160K in student loans, all pharmacy school's debt......I did not had any undergrad loans.

Thank you all....Any feedback is appreciated.
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3) DTI = debt/income



i'm estimating your current debt payment runs from 600-900 per month. With a monthly income of 6000, your DTI is at 10-15%. Once you factor in your expected mortgage payments it should be less than 45%. This helps determine how much you can borrow. On a mortgage loan of 110k this would not be an issue. In fact, it looks like you might be able to borrow up to $300,000. There are more factors that come into play like reserves, credit, type of mortgage loan, but this gives you a general idea.
 
74777 said:
For many people on IBR, 15-25 years of reduced monthly payments will not pay off the entire loan. It would be counterproductive to enroll in a repayment program that won't fully pay off the student loans while still attempting to make extra payments to pay it off (as you suggested). If the OP still made extra payments, he/she would ultimately lose that money after 20 years. In this scenario it's either make minimum IBR payments for 20 years or disenroll from the program and attempt to pay if off fully asap (I'm suggesting the former).

72k income
190k student loans

~150k will be paid off after 20 years on IBR. if assuming the remaining amount is taxed, ~50k additional payment after 20 years. Total: 200k --> this is an entirely reasonable amount to pay after 20 years on an original amount owed of 190k. This is also not taking into account the scenario that the remaining amount may be entirely forgiven after 20 years. We have people in Congress who are unaware of the current financial landscape of student loans yet much progress has been made on that end. Imagine in 20 years when a significantly larger amount of the population is indebted with student loans and those in Congress will more likely understand the situation and/or have firsthand experience with it. Either way is palatable; win-win.

For the OP's case, we are talking about a situation where his/her payments on IBR will lead to less paid after 20 years than if he/she were to attempt to pay it off fully after 5 years. In the meantime, the OP can save on rent, make profit from renting out rooms, deduct mortgage interest and property taxes, asset appreciation (God when does it end?), and experience a few other joys of owning a home.

Remember, one of the motivations for the introduction of IBR is to encourage home ownership for those with students loans. If you don't take the hint you will get left behind. Right now, inflation is unusually low, and with Trump's policies it is threatening to pick up. With pharmacist wages stagnant, it would be wise to participate in asset appreciation. Once inflation picks up you can say goodbye to owning a home for years until the next recession/financial crisis.

As for the OP working in the pharmaceutical industry -- are you suggesting those working in industry should not buy homes? That is for the OP to assess. For all we know the OP may have been working there for who knows how long.

(these numbers are off the top of my head* the OP knows his/her financial situation best)
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The latest GOP plan tax eliminates interest tax deduction on home equity loans. That would end your plan.

Wait a minute..you are assuming congress will forgive your student loan debt 20 years from now? Give me a break.

Even if Congress does, they will place income restrictions like student loan interest deduction.

It is your life. Do whatever you want.


Sent from my iPhone using Tapatalk
 
BMBiology said:
The latest GOP plan tax eliminates interest tax deduction on home equity loans. That would end your plan.

Wait a minute..you are assuming congress will forgive your student loan debt 20 years from now? Give me a break.

Even if Congress does, they will place income restrictions like mortgage interest deduction.

It is your life. Do whatever you want.


Sent from my iPhone using Tapatalk
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If tramp's policies do end it, that ends that part of my plan, but not the OP's.

Again even if the remaining amount is taxed after 20-25 years, for many on IBR with large student loans that scenario is still financially favorable to one where you pay it off fully asap. The math is not that intimidating. Don't be scared. You'll be fine.
 
If you think paying 7% interest and paying tax on the forgiven amount after 20 years is good idea then go ahead. Be my guest.


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BMBiology said:
If you think paying 7% interest and paying tax on the forgiven amount after 20 years is good
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mentos said:
Pay your bills, deadbeat!
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Nothing wrong with being smart about paying your bills. It astounds me that 99% of pharmacists here suggest paying off school loans is the financially smarter move to make here. I've seen posts where you guys suggest people attempt to fully pay off 250k+ in loans when IBR repayment programs out there will end up saving that person more over the long term while allowing more financial flexibility. Why is everyone trying to mislead these people into thinking they are saving more money by fully paying of the loans asap? At what point will you guys stop suggesting that attempting to pay off loans fully and aggressively is the wrong move? Because at some point it is the more financially irresponsible move to make with REPAYE and PAYE out there and other forms of IBR. 500k? 1mil? When the rph makes 50k? 25k? Unemployed?
 
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BenJammin said:
It blows my mind that there are pharmacist's making $120,000 a year who are making minimum payments on their student loans. Those are the people who do not deserve a dime in forgiveness.
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Many of you seem completely ignorant of the situation at hand. The OP and anyone else on IBR with lots of student loans don't care if they are ethically or morally obligated to pay off student loans - they want to make the decision that makes most financial sense in their case. In these scenarios IBR without fully paying off the loan is the preferable event even if the remaining amount were to be taxed after 15-20 years. These are by design to encourage home ownership and to save for retirement.

10 years down the road, there will be those who spent 10 years trying to aggressively pay off their loans and those who used IBR to purchase a home early. One thing is certain -- no one who spent those 10 years wasting money on rent and saving little for retirement will be basking in wealth like the rest of you who purchased homes 5 years ago are. Really unfair advice to those who owe a lot in student loans. There is risk for sure, but the risk is no different than the risk that comes with simply buying a home, a risk the rest of you took and benefited from.
 
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Well this is my story so you can learn from my mistakes. Bought a new house in 2008 for $355k as a new grad. Still had $55k in student loans. A few months later I got laid off and had to move 3 hours away for a job. Housing market continued to decline until 2011 when the value of my house bottomed out at $260k. Obviously I was way upside down so couldn't sell it. Finally realized I needed to change my ways to get out of this massive hole I was in. Started listening to Dave Ramsey and got really motivated to pay off all my debts including the mortgage. It taught me to focus on doing one thing at a time, and not to procrastinate and just get it done. If you keep worrying about what is mathematically the best way or whether to refinance or whatever, I'm telling you, you'll be wallowing in your debts forever.
 
pezdispenser said:
Well this is my story so you can learn from my mistakes. Bought a new house in 2008 for $355k as a new grad. Still had $55k in student loans. A few months later I got laid off and had to move 3 hours away for a job. Housing market continued to decline until 2011 when the value of my house bottomed out at $260k. Obviously I was way upside down so couldn't sell it. Finally realized I needed to change my ways to get out of this massive hole I was in. Started listening to Dave Ramsey and got really motivated to pay off all my debts including the mortgage. It taught me to focus on doing one thing at a time, and not to procrastinate and just get it done. If you keep worrying about what is mathematically the best way or whether to refinance or whatever, I'm telling you, you'll be wallowing in your debts forever.
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along the same thoughts - I bought a house for 330k in 05. Put in another 20k in improvements - sold it in 11 for 305k. I didn't lose my job or anything, but owning it wasn't practical anymore (you could argue it wasn't ever practical, but my mistake).

Now I have a $1000 a month mortgage, live within walking distance of work in one of the better cities in the southeast, have no student loan debt, and have at least 2k more free money each month than I did 10 years ago.

Buy smart.
 
Dred Pirate said:
along the same thoughts - I bought a house for 330k in 05. Put in another 20k in improvements - sold it in 11 for 305k. I didn't lose my job or anything, but owning it wasn't practical anymore (you could argue it wasn't ever practical, but my mistake).

Now I have a $1000 a month mortgage, live within walking distance of work in one of the better cities in the southeast, have no student loan debt, and have at least 2k more free money each month than I did 10 years ago.

Buy smart.
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Buy high sell low. Grew up in San Francisco. My parents bought their home in sf for 400k in 2001. Ballooned to 800k in 2007, then dipped back down to 400k in 2012, and is now worth 950k and theyre still not convinced they should sell it. Mom is a pharm tech and dad has half her salary yet they own a million dollar home. Really illustrates one of the major draws of home ownership, when the plan is sound

Anyways, to the OP. I think the major deciding factor here is whether or not you have stable employment.
 
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^ you know your parents lucked out right? They live in SF and greatly benefited from the tech boom. I am pretty sure they didn’t predict that but they sure benefited from it. Would they have gotten the same results if they purchased a house in Las Vegas? I don’t think so.

Besides, 2x your investment after 15 years is not a big deal nowadays...just look at how much the stock market has gone up.

Look, I love to see you pull the trigger and purchase a house in CA (assuming you would even qualify for a loan since you have a boatload of loans). Let’s see you take that kind of risk. Post it afterward. Come back and tell us how you did it.




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BMBiology said:
^ you know your parents lucked out right? They live in SF and greatly benefited from the tech boom. I am pretty sure they didn’t predict that but they sure benefited from it. Would they have gotten the same results if they purchased a house in Las Vegas? I don’t think so.

Besides, 2x your investment after 15 years is not a big deal nowadays...just look at how much the stock market has gone up.

Look, I love to see you pull the trigger and purchase a house in CA (assuming you would even qualify for a loan since you have a boatload of loans). Let’s see you take that kind of risk. Post it afterward. Come back and tell us how you did it.




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Funny you mention Vegas. Parents literally had purchased a vacation home in North Las Vegas in 2002 (2.4k sq ft, 6 bd, 6bath for 150k) and sold it. Homes there have almost doubled since then.

Currently saving for a home purchase and don't mind updating if anyone cares. Fannie Mae and Freddie Mac underwriting allow for those with large loans (think 200k+) to qualify as they take into account what the IBR payments are and they are less concerned with total amount owed (in a few cases they will consider that you owe nothing when it comes to the debt calculation but this is the case for those who are manipulative and know the loophole). However, guidelines have been changing frequently in this regard.
 
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BMBiology said:
^ you know your parents lucked out right? They live in SF and greatly benefited from the tech boom. I am pretty sure they didn’t predict that but they sure benefited from it. Would they have gotten the same results if they purchased a house in Las Vegas? I don’t think so.

Besides, 2x your investment after 15 years is not a big deal nowadays...just look at how much the stock market has gone up.

Look, I love to see you pull the trigger and purchase a house in CA (assuming you would even qualify for a loan since you have a boatload of loans). Let’s see you take that kind of risk. Post it afterward. Come back and tell us how you did it.




Sent from my iPhone using Tapatalk
Click to expand...


Kinda faulty logic with stock market. No way they would have had anywhere near 400k invested so they made more total money with the house for sure due to leverage. (But again they lucked out being in San Fran, however, the price has to do both with local and state govt regulations as well as tech boom)
 
^ You can also buy stocks on margin = leverage.

It is reasonable to assume they had paid off their mortgage (400 k plus interest) after 15 years. If that is the case, then yes they have put in 400 k to make 400 k.

My point is doubling your money in 15 years, even 400 k, is not just exclusive to housing since everything has gone up in value. I am pretty sure if they had been steadily putting in $400 k in their 401 k for the last 15 years, they would have more than double their investment by now.

It is foolish to make investment based on selective sampling. It is like me telling you to buy bitcoin because it had gone up more than 800% since Jan or to buy stocks because it has more than triple since 2009.


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BMBiology said:
^ You can also buy stocks on margin = leverage.

It is reasonable to assume they had paid off their mortgage (400 k plus interest) after 15 years. If that is the case, then yes they have put in 400 k to make 400 k.

My point is doubling your money in 15 years, even 400 k, is not just exclusive to housing since everything has gone up in value. I am pretty sure if they had been steadily putting in $400 k in their 401 k for the last 15 years, they would have more than double their investment by now.

It is foolish to make investment based on selective sampling. It is like me telling you to buy bitcoin because it had gone up more than 800% since Jan or to buy stocks because it has more than triple since 2009.


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you also have to figure in taxes/maintenance - especially in SF - what are the property taxes each year? Generally I would never count on my primary home as an investment - it is a means to an end - a place to provide shelter, etc. Over the course of the long haul a house generally will go up approximately at the same rate as inflation (some years much much more, some years it goes down). If the prices went up faster than the inflation - soon everybody would be priced out.
 
I can tell you right now that nothing is final and even the procedure for the current redemption is not yet ready . Department of Education and the Department of Health and Human Services are having joint working sessions on getting the revised policy together. The reason why I know this is that these changes have fairly drastic effects on the OPM (the entire Civil Service and incentive pay) and the DoD (through the new GI Bill limits), and we are required to react before it gets released. It's going to be interesting as the Planning, Evaluation, and Policy Development Assistant Secretary in DeptEd is not appointed yet and has a Civil Service tenant, which means that no substantial work can be signed off on at the moment.

Even if you do get paid back, you should never take out money that you can't make good on yourself if it comes to it. Margin loans and things like this that are contingent on third-party payoffs tend to carry risks that the bearers don't think through well enough.
 
with the way the tax reform is going we can feel comfortable that only people who make over 100k a year will have their loans forgiven - for those that are lower income - well you should have been smart enough to go into a profession that paid you more - no government assistance for you!
 
All the folks throwing rocks at people for not steroid-paying down their student loans, does this mean you all don't yet have a full family/dependents to feed?
 
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