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bstough
Posts: 1
Registered: ‎08-21-2007
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Student loans question

I want to buy a house / condon in 2 - 4 years and wonder should I pay off my student loans in one lump sum or should I pay them over a year to improve my credit score.  I have the funds to paydown the debt now without affecting my quality of life in any way. They also represent only about 10% of my annual gross income. I just graduated college, have a 730 FICO score and would like to optimize my ability to get a low interest rate in a couple years. Thoughts?
 
Thanks
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Brammy
Posts: 5,436
Registered: ‎03-10-2007
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Re: Student loans question



bstough wrote:
I want to buy a house / condon in 2 - 4 years and wonder should I pay off my student loans in one lump sum or should I pay them over a year to improve my credit score.  I have the funds to paydown the debt now without affecting my quality of life in any way. They also represent only about 10% of my annual gross income. I just graduated college, have a 730 FICO score and would like to optimize my ability to get a low interest rate in a couple years. Thoughts?
 
Thanks


 
JMHO with your scores you should not hav any problems financing a house.  The onyl way I would see paying them off is to have more disposable income for household things in my new place.  Remember once you own you are lookin at the landlord in the mirror every morning.

Established Contributor
orhippychic
Posts: 562
Registered: ‎08-16-2007
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Re: Student loans question

I agree. I'm kind of new around here but from what I've learned so far, not only do you have an excellent score, but paying the debt on time over time will only make it better. From my experience, interest rates are very low on Ed loans, so it wouldn't hurt to make several large payments over the next 12 months or so just to solidify your history. It won't cost you much in interest and the benefits could save you thousands in interest on your future home. Either way you choose, it looks like your in great shape. Congrats!
09/28/07 EQ 498 EX 537 TU 477
12/27/07 EQ 526 EX 562 TU 541
02/26/08 EQ 526 EX 589 TU 579
11/09/08 EQ 562 EX 648 TU 578
Valued Contributor
netpanther
Posts: 1,694
Registered: ‎08-07-2007
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Re: Student loans question

[ Edited ]
My credit union advisor told me that in home loans unless you have delinquent payments that student loans are considered- how should i put this- the least of their worries as long as you show current, paid on time if you did have to pay on them and never in default.
 
She said that most student loans are a mix of federally backed similar to VA loans- I know I have some that are subsidized and about half not subsidized. I locked them in at a SUPER low rate a couple of years ago- so as far as any loan - well they are my only loans per say that are open, I have a great rate- so to me it makes sense to keep all my CC utils low as possible, work on CLI over the next couple of years, and worry about grad school. I am at the high 660-670's and working to get where you are in the 700's.
 
I agree w/ the above poster that once you buy a house you are definitly the landlord. And for some reason the first year there is some serious sinking in feeling that you are now a homeowner.
 
I say you are in good shoes either way- the one way I could see that you might want to pay them off is if you could finally invest the money in some kind of really good investment plan so you are "paying yourself first".


Message Edited by netpanther on 08-21-2007 05:01 PM
Regular Contributor
VLGaffEsq
Posts: 126
Registered: ‎05-12-2007
0

Re: Student loans question

There is no need whatsoever creditwise to pay off your student loans right now.  Instead, start saving for your down payment so you can buy in 2 years.  Simply make sure you always pay your bills and debts on time, and your FICO score will continue to remain high.  (Congrats on your excellent FICO score!)  I also say go for home ownership and be your own landlord...have no fear!  In my opinion, renting is for suckers (or for people who may have to move elsewhere in a few years) who help pay their landlords mortgage and let him alone reap the equity in the property.  The longer you pay on your student loans, the stronger that tradeline will appear on your credit report.  Good luck!

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