No announcement yet.

Selling home and need to refi student loans

  • Filter
  • Time
  • Show
Clear All
new posts

  • Selling home and need to refi student loans

    In my last year of residency, signed up for a fellowship next year and will finish June 2017.

    I have 315k student loans, mix of private and fed, because of poor advice did not consolidate all to federal at beginning of residency and therefore plan to pay them off vs forgiveness. Current interest rates are terrible, some are subsidized at 0% but most are 6.5%, a few 8.5%. Have been making some payments but not nearly enough to cover interest and it has grown considerably.

    Spouse (married six months ago) has been an attending for a few years, no school debt, makes 400k +, has tons in savings and we are very frugal overall together.

    Going to sell my house in a few months before fellowship and hoping to make (based on comparable on market) between $40-70k.

    I'm looking into refinancing my loans now that companies will give loans to residents. Will likely take that step in the next few weeks. If I get a good profit on my house, planning to max out my roth this year, and then throw the rest at my loans- or is there something else I should do?

    Will I still be hit with taxes next year on the profit/gains from the house if I turn it over into my loans right away?

    Also, leaning towards going with the company Earnest and doing a variable interest rate as it is about 2% lower than fixed. You have the option to switch between variable/fixed rates every 6 months with this. Have always viewed variable rates as risky (let's face it, they are), but it could save me considerable $$ vs fixed.

    Thanks! Appreciate the website/forum as I feel helpless with this stuff, just starting to get my finances in order now that I have options to refinance in residency/fellowship

  • #2
    I agree with the plan. My priority would be to pay down the loans as quickly as possible, obviously using the extra payments first toward the higher interest loans. The sooner you erase the debt, the more independent you will feel and be. Good luck!


    • #3
      If you make money on the house you will be hit with taxes (percent depends on time owned, ie, capital vs. short term gains) no matter where it goes. I did earnest on a variable, they seem risky...but I just dont see it in reality. In order for it to be higher than your fixed quote you'd need about 8 rate hikes, which even given the most aggressive fed dot plot would be two years, but that wont happen anyway. Then you have to think about the interest you already saved up to that point, and of course you can change if the macro scenario changes.