I am 30 year old married, no kids, renter, have about 323k in student loans. So far was paying based on IBR plans but now with a new job finally qualify for refinance. I have about 50k in investment account, 13k Roth, and 3.5k in emergency saving fund. No other debt (except for monthly credit card bill which are always paid off.) Been in school and training forever it seems ( 7 years).
Options for loan re-fi
1) SOFI loan at 3.44 % for 10 years fixed. Monthly payments about $3303.
2) SOFI loan at 2.99% for 7 years fixed, Monthly payments about $4295.
SO-FI advised me to go with 10 year plan as to free up monthly cash flow, this way if I wanted to buy a house or save up etc I have cash for it.
Way I see is there is about 1000 difference per month between two options. If I set aside 12k from savings to pay for the difference, I can go with the 7 year option and it would not affect my cash flow.
Second option is to just pay extra 1000 a month when I can and not pay when I want to use it for something else etc. I ran an amortization table, it comes out to be 7.8 years. So this way it would just cost me extra 7-8 months x 4295 a month in exchange for flexibility.
Other options would be to use the 50k in investment account to make a one-time payment to bring the monthly payments down.
My Income is 209k and I get paid about $9700 a month post taxes benefits etc.
Some Goals would be to max out 401k at 18k a year. Start saving for a down payment on house etc. Was looking to get life insurance Term for now and consider option later as life changes.
I can realistically manage rent + bills + everything else on about 2800-3100 a month.
What I was thinking of doing is take a 7 year term. Withdraw $1000 a month over next 1-2 years from current investment account. $9700-3300-3000(living expense) = $3400 a month saved. Would use this in short term to beef up a bit the emergency savings and then start saving for other Goals. I probably would not do extra payments on a 7 year term as 3% to borrow money is pretty cheap factor in inflation etc. I rather add that to 401k or IRA or something else and reap tax benefits.
I welcome any constructive feedbacks.
Submitted August 15, 2017 at 05:28PM by ch3rryc0ke2 http://ift.tt/2w7ZEjo
