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  • debt paid off before buying home?

    We are a 2 physician household recently out of residency.

    pretax income combined around 420k.

    student loans 300k.

    Would like opinions of how far down the loans should be paid off before thinking of buying a home. Renting in HCOL area currently. Rent 3k/month. Homes we would look at around 700k.

    Other than emergency fund, should we wait until a certain amount saved in retirement as well?

    TIA.

     

  • #2




    We are a 2 physician household recently out of residency.

    pretax income combined around 420k.

    student loans 300k.

    Would like opinions of how far down the loans should be paid off before thinking of buying a home. Renting in HCOL area currently. Rent 3k/month. Homes we would look at around 700k.

    Other than emergency fund, should we wait until a certain amount saved in retirement as well?

    TIA.

     
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    If you really want a home, consider getting one in a few years after you and your spouse feel happy and secure in your jobs. In the meantime get an emergency fund, disability insurance (for at least one of you) and max the 401ks. Refinance the student loans assuming you're not going for PLSF or haven't already. Buying a house isn't necessarily something you have to put off until you have x amount of downpayment if you'll be happier in one before that. But there's no rush to get one now (unless there is).

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    • #3
      I think it's a good idea to really hammer down those loans for a couple years. Once you buy you won't have the same amount of cash to throw at them because a house inevitably costs more than just the mortgage ( and I'm guessing your mortgage payments and interest would be about 4k/ month, so more than rent). It's hard to pay a mortgage and student loans and save for retirement. It sounds like you guys are young and child free- in that case I'd rent a few more years for sure.

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      • #4
        Keep renting until you are sure you want to stay in current location and jobs!  I would vote for at least a year or two.  We are also 2 doc couple and rented initially but not in HCOL.  Usual advice, as long as possible rent.  Don't underestimate hidden costs of buying, furnishing and maintaining a new "doctor" home.  That said your student loan amount and house price don't seem unreasonable.  Depends on your student loan rates (refinance as mentioned above) and how aggressive you want to be repaying those.  The retirement accounts aside from tax-deferred (401k etc) are less important initially vs the loans..

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        • #5
          Kids or planning on kids? If you’ll be paying for daycare be sure to factor that in. It’s our 3rd biggest monthly cost (more than rent, less than loans and retirement). It’s one of the big reasons we’re focusing on student loans rather than home buying.

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