Personal Investment & Financial Planning Q`s/Pay off student loan, or buy a house

Advertisement


Question
i would like a professional opinon. My wife and I have 7 student loans totaling 80k+. We received a lump sum of 16,000 from a relative.

My question is should we use this for a downpayment on a home, or should we pay off one of our loans. I have one loan of 15k with a 10.6 interest rate, the highest rate of them all. Should I just use the money to pay that off, this would save me 283 a month. Or should we purchase a house?

what would your opinion be?

thanks

Answer
My advice is to pay off that very expensive student debt.  You can continue to save for the home down payment with the savings in cash flow, but the interest rate on your student debt is very expensive in today's interest rate environment.  And student debt can not be expunged in a personal bankruptcy (of course hopefully that would never become an issue).

Good luck.

Personal Investment & Financial Planning Q`s

All Answers


Answers by Expert:


Ask Experts

Volunteer


John Guilford Kerr, CFP, CFA

Expertise

I can answer questions related to personal financial planning, asset allocation, private equity investment analysis, fixed income, mutual fund, ETF, and stock questions, estate planning (basic), education planning, insurance planning, and business financial planning.

Experience

I have thirty-eight years of experience in finance, in the U.S. and internationally, for both public and private corporations. I have specialized in personal and small business financial planning and investment advisory services since 2005.------ - ten years commercial banking, New York, Paris, Houston, Charlotte, Atlanta---- - six years treasurer of a publicly traded health care company, Philadelphia----- - six years international project finance (Bechtel), San Francisco, Manila, London----- - five years head of international hotel development (Hyatt), Chicago---- - eleven years personal financial planning.----- Registered Investment Adviser, Hawaii---- FINRA General Securities Representative - Series 7---- FINRA Uniform Combined State Law - Series 66---- Resident Producer Insurance License, Hawaii-, Accident and Health or Sickness, Life, Variable Life and Variable Annuities

Organizations
CFA Institute of Hawaii---- Certified Fiancial Planner Board of Standards, Inc-----. National Association of Personal Financial Advisers----- Financial Planning Association----- National Association of Tax Professionals

Publications
Project Finance Yearbook - 1997 / 1998 "Manila Water & Sewerage System Concession"----- "The Road To Helsinki, An Analysis of European International Relations Leading to the Conference On Security and Cooperation in Europe"' published 2015.

Education/Credentials
Certified Financial Planner, Certified Financial Planner Board of Standards, Inc.---- Chartered Financial Analyst, CFA Institute----- Certificate in Financial Planning, Boston University---- Masters in Foreign Affairs - University of Virginia---- Bachelors of Arts, Government - Ohio University

©2016 About.com. All rights reserved.