Author Topic: Need some advice regarding loans vs mortgage vs 401k  (Read 1851 times)


  • 5 O'Clock Shadow
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Need some advice regarding loans vs mortgage vs 401k
« on: January 18, 2014, 08:54:28 PM »
Relatively new to the forum and I have tried to search existing posts but needed something more specific to my situation and appreciate any help.

1. Have about 150K in student loans. $75K at 2.8% and $75K at 2%.
2. Considering buying a house in the next year. Target price is 500K and I will need 100K for the down payment. Living in california so COL is super high.

I have 150K in cash. Does it make sense to:

1. Pay the loan off entirely in the next 3 months after saving for an emergency fund? This just gives me peace of mind being debt free. I can delay buying a house because I believe the prices in Southern California will come down in the next year when rates go up.

2. Pay off $75K at 2.8% and just save the remaining for the down payment? right now the money is just sitting in a savings account and I'm paying $300 in interest on the loans every month.

3. Don't pay off any loan and use the cash for a higher down payment when I buy the house?

Also, does it make sense to max at your 401k before saving for down payment for a house?


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