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Question for the Money Doctors

Question submitted on Apr 21, 2014.

Question

What are this couple's best options regarding student loan debt and preparing to purchase a home?
Wife is working full time. Husband has one more year of residency in Internal Medicine and will finish with about $200k in student loan debt (avg 7% interest rate). They want to purchase a house. How should they balance saving for a downpayment with paying down student loans?

Answer

Whether to save for a downpayment on a home or pay off your student loan debt is a personal decision. Depending on your husband's income after completing his residency, you may be able to pay down the student loan fairly quickly.

I know that both of you have worked hard and you have delayed gratification, but persevere a little longer and pay off that student loan debt. Then you can save for a downpayment and purchase a home and furnishings with the knowledge that you have shown self discipline and can live on your budget.

If you decide not to wait to purchase a home I hope that you will at least have a game plan to pay off the student loan debt as quickly as possible. You won't regret it.


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