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TMP-SMX

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Can you afford to add 1300 plus utilities, repairs, maintenance, etc? I rented during medical school 1 year in an apartment and a house the other years. I guess it's a different question if you already own but don't want to put yourself in too much of a hole during school especially with kids. I racked up a lot of debt during residency (rented for 3/6 post med school years and had 3 kids). How does rent look for an apartment/rental home? Obviously financially it's probably going to be better to not take out the student loans but it depends on what your options are you need to focus on your courses.
 
OP
F
Oct 23, 2019
8
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Medical Student
Can you afford to add 1300 plus utilities, repairs, maintenance, etc? I rented during medical school 1 year in an apartment and a house the other years. I guess it's a different question if you already own but don't want to put yourself in too much of a hole during school especially with kids. I racked up a lot of debt during residency (rented for 3/6 post med school years and had 3 kids). How does rent look for an apartment/rental home? Obviously financially it's probably going to be better to not take out the student loans but it depends on what your options are you need to focus on your courses.
I'm still trying to get my head wrapped around what's coming (financially) and make the best decision; So to answer your question - I don't know if we can afford it. I'll give you more information that might help provide a better picture of the situation and an appropriate path moving forward:

Edit for anonymity.
 
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TMP-SMX

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No problem. Do you have any clue whether you might be planning for public service loan forgiveness? Also how old are kids? If they are preschool age it's possible you would be eligible for low cost or free pre-K depending on your area. We used it during residency for our first child for one year. WIC is out there as well depending on age of the child. We used it for one year when I was out of state with two kids.
 
OP
F
Oct 23, 2019
8
0
Status
Medical Student
@TMP-SMX I'm not planning to do PSLF but I'm open to it. However, it seems to me that I shouldn't plan on receiving it, based on some recent data reported earlier this year (please correct me if I'm wrong).

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Apr 10, 2018
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Look into cash out refinance loans. I don't really know how they work but they seem like the ideal thing for you to do. You may need to use your student loan to build a little more equity in your home. If I understand them right you will be able to take out a loan equal to 80% of your homes value. The first thing you will have to do is pay off your 1st loan. If your home is valued at 280 this will leave you with 130k cash and a higher mortgage payment.
 
OP
F
Oct 23, 2019
8
0
Status
Medical Student
Look into cash out refinance loans. I don't really know how they work but they seem like the ideal thing for you to do. You may need to use your student loan to build a little more equity in your home. If I understand them right you will be able to take out a loan equal to 80% of your homes value. The first thing you will have to do is pay off your 1st loan. If your home is valued at 280 this will leave you with 130k cash and a higher mortgage payment.
Thanks for the info. I'll have to make some time to look into that as I haven't heard of it before.
Edit for anonymity.
 
Last edited:
Apr 10, 2018
430
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Thanks for the info. I'll have to make some time to look into that as I haven't heard of it before. Not sure having a higher mortgage payment is good idea though considering that 130k would run out by 4th year and then trying to have allotted 30k COL cover the now increased living expenses. Or maybe I'm not understanding what you wrote.
Yeah, it's a 130k loan you could take out against your home. You could likely make mortgage payments with that and live off the student loans. Residency would be rougher if your still a single supporter.
 

TMP-SMX

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Residency will be very tough with two children and one income. Refinancing at least to save a small amount of loan money is an option now but your interest rates aren't going to be great after you start school and have no income so you'd have to do that before starting.
 

dpmd

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I think the biggest thing to consider is how likely you are to significantly reduce your monthly expenses by renting. It doesn't really sound like you can. Therefore not moving (and therefore eliminating moving expenses and selling costs) will likely put you in a better position. Then, when it comes time to move for residency you can decide whether to sell at that time and use the proceeds to reduce debt at that time (and hopefully property values are even better) or for whateve else you might need. The cash out refi is possibly better than not taking it and relying more on student loans as the rate will likely be better but you are correct that it means a higher payment now whereas student loans wouldn't need to be paid yet. For any possible government help, having a big dollar amount in your savings would be more hurtful than just having your home as an asset (because they will use currently assessed value from property taxes rather than the likely higher current value) so that is a factor to look at. Your home value may not even be looked at for certain benefits available to those with kids. If you did a rent versus buy calculator using numbers pretending like you would buy for the amount you paid versus current rent I bet it would advise you to buy if you plan to stay for 4 more years. Finding a calculator online to verify would be helpful to you though because you will see the projected costs for both scenarios. Just because they don't have a sell versus keep calculator (though I did find one that is sort of for that) doesn't mean you can't use the buy versus rent one and extrapolate.
 

dpmd

Relaxing
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Sep 14, 2006
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Thanks for the info. I'll have to make some time to look into that as I haven't heard of it before. Not sure having a higher mortgage payment is good idea though considering that 130k would run out by 4th year and then trying to have allotted 30k COL cover the now increased living expenses. Or maybe I'm not understanding what you wrote.
The idea with the cash out refi out would be to reduce loan amount but by the whole amount you bring out. You would keep enough cash to ensure you can keep paying your bills the whole time.
 
OP
F
Oct 23, 2019
8
0
Status
Medical Student
Thank you for the informative and thoughtful replies, everyone!

My family and I have a lot to think about. Fortunately we have time before a decision needs to be made. The financial aid award letter should be official in early April next year and it will assist with how to move forward. Until then, we're going to work on a 30k/yr living expenses budget, look into the refi option, and learn more about government assistance programs.

Thanks again for taking the time to help, everyone!
 
Apr 10, 2018
430
141
Status
Non-Student
Thank you for the informative and thoughtful replies, everyone!

My family and I have a lot to think about. Fortunately we have time before a decision needs to be made. The financial aid award letter should be official in early April next year and it will assist with how to move forward. Until then, we're going to work on a 30k/yr living expenses budget, look into the refi option, and learn more about government assistance programs.

Thanks again for taking the time to help, everyone!
Don't forget the loan money isn't taxed so it's like you have a 45k a year salary.
 
Apr 10, 2018
430
141
Status
Non-Student
Have you thought about pa school? It sounds like it would set you up better to retire at 59.5 than medical school would. Plus you wouldn't need to rough it out for eight years. Pa school could set you and your wife up to each max your 401k from 40 to 59.5 which should set you guys up to retire at 59.5. take a hard look at where your finances will be after medical school. 300k in debt at 40 will be an uphill battle even with a 300k salary if you want to retire at 60.
 
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