Author Topic: Refinancing or Purchasing for Student Loan Debt Pay Off  (Read 962 times)

jgkeeb

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Refinancing or Purchasing for Student Loan Debt Pay Off
« on: November 17, 2016, 07:21:39 PM »
Since graduation I've been focused on maximizing my income to a successful extent. Despite what many here would recommend I've been on income based repayment while I've grown my businesses and other investments.

I'm at a point where I need to address my wife and my student loans. Collectively we owe $85000. I pay ~$900 a month in loan payments which covers interest but make's no progress on principle.
I don't own a house but I'm 3 years into owning a $1.5 mil commercial warehouse with a 504 SBA loan. Here's my dilemma:

1) Is it too early in ownership to successfully refinance and pull out 85k in equity. Keep in mind SBA 504 loan has a PPP of ~ 2%. Initial response from a single bank is that I'm better off not refinancing given the difference in interest rate and terms between conventional and SBA loans.

2) Is it possible to qualify for a personal housing mortgage that would allow me to buy a house and pay off the student loans at the same time?

3) Are there any other creative or interesting strategies I should look into to shift the burden of paying these loans off? Maximizing my access to capital is how I've gotten to where I am, I'm trying to avoid making 12 months of $7500 payments. While it may be the best for me personally, it will obviously slow my businesses growth and reinvestment.

clarkfan1979

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Re: Refinancing or Purchasing for Student Loan Debt Pay Off
« Reply #1 on: November 19, 2016, 04:51:19 PM »
If you are growing a business, I don't think you want the income based repayment. If I understand it correct, when your income goes up, your payments go up and it doesn't mean that you pay off more principle. Income based repayment is going to be better for long-term low earners.

Switch to a 25 plan. Pay the minimum while you grow your business. The government loans are very flexible if you run into trouble.


Dicey

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Re: Refinancing or Purchasing for Student Loan Debt Pay Off
« Reply #2 on: November 20, 2016, 02:31:34 PM »
Total tangent here. Since SL's are not dischargeable via banktuptcy, but real estate loans are, I've always wondered about the scenario of buying property, fixing it up, or just waiting for it to appreciate, refinancing to get enough to pay off the SL's, then walking away from the property. Voila! No more SL's. If something like this is possible, then lenders are going to look at your situation with beady eyes.

Congrats on thinking outside the box with the commercial property, BTW

clarkfan1979

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Re: Refinancing or Purchasing for Student Loan Debt Pay Off
« Reply #3 on: December 03, 2016, 09:29:53 AM »
Total tangent here. Since SL's are not dischargeable via banktuptcy, but real estate loans are, I've always wondered about the scenario of buying property, fixing it up, or just waiting for it to appreciate, refinancing to get enough to pay off the SL's, then walking away from the property. Voila! No more SL's. If something like this is possible, then lenders are going to look at your situation with beady eyes.

Congrats on thinking outside the box with the commercial property, BTW

After a refinance there is going to be some equity in the property because a bank is not going to let someone refinance at 100%. What would be the motivation for someone to walk away from a property with equity?
« Last Edit: December 03, 2016, 09:33:10 AM by clarkfan1979 »