Anybody roll student loans into their mortgage?

[DisgruntledVirus]

I wouldn't take on a 200K mortgage (mortgage +student loan) on your income.

You basically want to get a loan that is less than 6.8% (student loan interest). What are private loans charging nowadays?

Some other options:

- if you have a federal job, your loan will be forgiven after 10 years (google PSLF)
- if you REALLY want to, take out a 401k loan (rate should be around 4%) to pay your student loan. BUT if you lose your job, you HAVE to pay back your 401k loan

I need to look into the consolidation/refi and also private loan options for it. I have a 401k with a nice chunk in it, but it's no where close to how much my student loans are.

 

[Wreckem]

I need to look into the consolidation/refi and also private loan options for it. I have a 401k with a nice chunk in it, but it's no where close to how much my student loans are.

Republicans fucked over students when it comes to student loan interest rates when they pegged interest rates to 6.8% sub/unsud and 8.5% grad plus.

Private consolidation of federal student loans isn't really an option.

If your federal loans are from 2006 onward you are fucked when it comes to student loan interest rates. And if you have grad plus loans you interest rate will be over 7%.

 

[Leros]

Republicans fucked over students when it comes to student loan interest rates when they pegged interest rates to 6.8% sub/unsud and 8.5% grad plus.

Private consolidation of federal student loans isn't really an option.

If your federal loans are from 2006 onward you are fucked when it comes to student loan interest rates. And if you have grad plus loans you interest rate will be over 7%.

Good thing I started college in 2006. Oh wait....

 

[Born2bwire]

Student loans are typically backed by the US government, aren't they? This is why student loans typically have a low interest rate, the government takes the risk.

Your home loan will probably have a higher interest rate than your student loan.

What is the interest rate of your student loan and what interest rate are you expecting to receive for your home loan?

Not to mention that you have greater freedom in paying back the student loans. The OP can look into choosing a long term loan repayment or a repayment that is structured around his income if he wants to lower his payments.

 

[Wreckem]

Good thing I started college in 2006. Oh wait....

Well there is always the PSLF program, for which public service is BROADLY defined. Very broadly. So is "full time", as they require an avg of 30hr/week year round as "full time". Thats my plan.

I already have 9 of my 120 payments. Glad they don't have to be consecutive.

 

[SunnyD]

To be honest, I was actually just considering investigating something similar over the last few days. I think my student loans were consolidated many moons ago at like 6.5%, so I'm tempted to take out a HELOC to pay them off at the current ridiculously good interest rates.

 

[Wreckem]

To be honest, I was actually just considering investigating something similar over the last few days. I think my student loans were consolidated many moons ago at like 6.5%, so I'm tempted to take out a HELOC to pay them off at the current ridiculously good interest rates.

Now that is something someone can do so long as they have enough equity in their house. And right now it would be smart thing to do if they have student loans and the equity to cover them.

 

[LegendKiller]

Republicans fucked over students when it comes to student loan interest rates when they pegged interest rates to 6.8% sub/unsud and 8.5% grad plus.

Private consolidation of federal student loans isn't really an option.

If your federal loans are from 2006 onward you are fucked when it comes to student loan interest rates. And if you have grad plus loans you interest rate will be over 7%.

Isn't it great that they did this to students? They turned a non-dischargable loan program into a money mint for the government which can fund their debt at ever lower rates while screwing students with fixed rate debt. Then they peg the max borrowing amount at a very low rate versus tuition inflation forcing students to load up on private loans at even higher rates.

I got lucky when I got into my consolidation just before they changed the rates.

 

[Sho'Nuff]

Let me get this straight. You want to obtain a 120k mortgage on a 80k house (LTV of 1.5) AND have a debt to income ratio of 3 (120k/40k)? Two comments:

1. Ain't going to happen. New lending rules won't let it (particularly with low credit).

2. It is an absofrickinlutely HORRIBLE idea. First, that debt to income ratio will make your life very difficult, and IMO it is better to rent cheap and eat than buy more than you can afford and starve. Second, by rolling the student loan debt into the mortgage, you will be paying it down over a much longer period of time (likely 30 years, vs. 10 years), which will likely negate any benefit that you might see from the lower mortgage interest rate.

Be careful OP. This is a BIG decision and you don't want to F it up. Stop talking to your parents and call a financial advisor who doesn't have a biased opinion as to what you "should" do. Many/most are willing to donate 5-10 minutes to help out a young person with a big decision.

 

[zerocool84]

no. what's scary is its his parents that suggested it.

His parent's generation are the ones that got us into this mess so it's to be expected.

 

[DisgruntledVirus]

Let me get this straight. You want to obtain a 120k mortgage on a 80k house (LTV of 1.5) AND have a debt to income ratio of 3 (120k/40k)? Two comments:

1. Ain't going to happen. New lending rules won't let it (particularly with low credit).

2. It is an absofrickinlutely HORRIBLE idea. First, that debt to income ratio will make your life very difficult, and IMO it is better to rent cheap and eat than buy more than you can afford and starve. Second, by rolling the student loan debt into the mortgage, you will be paying it down over a much longer period of time (likely 30 years, vs. 10 years), which will likely negate any benefit that you might see from the lower mortgage interest rate.

Be careful OP. This is a BIG decision and you don't want to F it up. Stop talking to your parents and call a financial advisor who doesn't have a biased opinion as to what you "should" do. Many/most are willing to donate 5-10 minutes to help out a young person with a big decision.

There is a reason this thread is asking for advice and input on this. The last thing I want to do is be like the people who got fucked over in the 08 crash because they were in over their heads.

 

[yh125d]

There is a reason this thread is asking for advice and input on this. The last thing I want to do is be like the people who got fucked over in the 08 crash because they were in over their heads.

Well while the rolling together idea isn't great, you should still be able to afford an 80k mortgage unless the student loan payments are huge which at only 40k they probably aren't.


With that much to put down I doubt you'll have much trouble getting a loan unless you have a collection or something

 

[Nintendesert]

That's the federal rate. Its gone up a lot recently. I have good enough credit to get a <2% interest rate on an auto loan and I still can't find a place willing to give me a reasonable consolidation on my student loans.

Sorry to hear that. That suuuucks. I had 1.4 on mine. I can't imagine paying that high on a student loan. D:

 

[Wreckem]

Sorry to hear that. That suuuucks. I had 1.4 on mine. I can't imagine paying that high on a student loan. D:

You finished during the "good old days", when interest rates were based on a formula and not fixed at 6.8%/8.5%. And while you may have had some tuition increases, you probably didn't have the massive ones that have occurred over the past several years.

Students starting in the mid-2000s and later got royally fucked over three ways by high student loan interest rates, much higher tuition costs, and a shitty job market.

 

[Sho'Nuff]

There is a reason this thread is asking for advice and input on this. The last thing I want to do is be like the people who got fucked over in the 08 crash because they were in over their heads.

Understood and appreciated. FWIW, I was not chastising you in my prior post (though it may have come off that way). Rather, I want to give you an unequivocal, no bullshit response to your question. Namely that rolling student loan debt into a mortgage is probably not feasible and is certainly a bad idea. The best way to get rich is to live within your means, save regularly, and avoid most debt like the plague (mortgages, excepted. Very hard to own a home without one).

I would try very hard to pay down that student loan (which is already 100% of your income) and THEN buy a home. Getting into a situation where your debt to income ratio is above 2.5 (regardless of interest rate) is a bad idea.