Scared to Death of my Student Loans

[Anonymous]

Hi all,

I recently earned a Master's Degree and landed a new job.  The job is entry level and the pay range is 35k - 40k annually.  I had almost no loans for undergraduate school <10k but grad school took me 50% longer to complete (thanks to procrastination and needing to work).  This, in addition to the fact that I paid for the entire stint with Student Loans has gotten me in debt  >100k, <110k. 

I really have no other debt.  I have no expenses other than my $893 rent + food + utilities.  My mother passed away 2 months ago and left a large sum of money.  I have paid off her car, put aside some for investment and now I would really like to pay off her house <50k and purchase one for myself.  The problem is that I am rebuilding my credit and the score is 651.

Am I even eligible for a decent loan and if so, can I afford one?

Any guidance would be appreciated!

TDO  

[Tons_of_Debt]

How much money did your mom leave you? How much is the house worth? How much was the original loan?

1. Pay off her house.

2. Pay off your student loans.

3. Buy a new house

[Anonymous]

My mom left (in total) 270k. With only 240k being liquid.  I had to cover funeral expenses and take care of other family business.  At this point I have 120k liquid and am expecting 30k but I plan on rolling this over into an IRA so that it is not taxed.  Her home is definitely worth at least 100k with the original loan being 70k.  

I do have enough to pay off her home and my student loans in full but then will have nothing left.  I don't think it's a good idea to distribute all of my money like this.   

Knowing these facts what would you suggest?

[BungalowMo]

I would pay off her home first.  Can you LIVE there??  That will save you the rent you're paying & toss $500/mo at your student loans, put a nice chunk of the liquid into an IRA.

Buy yourself a nice dinner....  all work & no play makes us all a little *bitchy*.  Ya have to relax sometimes too.

[Anonymous]

Hey there!

Wish I could live in her place it is beautiful and would cost me (almost) nothing.  Guess I forgot to mention her home is in Mississippi and I live in Chicago - NO chance of me going back there.

What now?

[BungalowMo]

Well....do you have any family or friends down there??  Renting a home out when you live so far away could be very bad.  With no one to oversee the place, it could be a nightmare. 

Is it in a nice enough neighborhood?  Maybe you can get with a realtor, have the place appraised so you know the real value and then try & sell it.

[Anonymous]

Oh, I could NEVER sell it. The neighborhood is vert nice. Most of my family is there and my aunt lives a block away.  My grandparents are moving in (April) and I know they will take care of it so I have no option (and I really want to) but to keep the house. 

My main concern here, because the house is not optional, is dealing with these scary students loans that I never thought I would really have to deal with and purchashing a place of my own.  Just wondering if you guys think I can afford it - or even get one for that matter?  Or might I be better off continuing to rent until my credit score reaches my goal and I can get a grip on these sutdent loans???

Thanks for taking the time to respond!  

[BungalowMo]

With over 100k in loans I wouldn't think about purchasing a home yet.  I'd find something fairly small, cheap & close to the train station & start paying those down.  You can take the train to work, right?  That way you won't need to deal with a vehicle & those costs either.

What are the total monthly student loan payments?  Who is the lender?

[Anonymous]

I OWN two vehichles already (each fairly new) but I never drive them as I take public transit to work everyday.  So there are really no gas or maitenance expenses and if I do incur them they are very minimal.  As for the school payments, I just graduated in May so I have until next May (7 months or so) to begin those payments.  They are with Sallie Mae and I have spoken to a Financial Advisor about getting those refinanced at a lower interest rate. Not sure what the payments will be but I am guessing no less than 500 and no more than 700/month.

[durak]

If you are going to have debt you have the best kind, so I wouldn't be in a hurry to pay either of these things off.  Also, the housing market is still in decline in most areas so no need to rush out and buy a house.  You should talk to an investment advisor.  Find some dividend paying stocks, buy some gold and just wait this economy and housing market out for a couple years.

It all depends on whether you can survive month to month with 100k student loan debt. What are your payments?