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| *Loan,banking and credit>>>mortgage loan |
I am trying to consolidate my fiance's student loan debt into our mortgage. Good or bad idea? |
We plan on consolidating our debt into the mortgage to pay her student loan interest off at a cheaper rate while trying build a little equity. Bad Idea. I find it hard to believe you'd get a better rate on a student load by using the mortgage (unless she didn't go through the gov't but only through a bank or used credit cards otherwise, the rates are extremely low and you can take lots of time to pay back). Trying to build a little equity? You must already have some equity otherwise you couldn't do this. They are not going to consolidate it into a loan for more than the property is worth. Why waste that equity you have now already on something low interest, that you can take a lot of time to pay back. I'd say bad. No one can take your home if you default on a student loan, but folding it into a mortgage makes it a collateralized loan, and if you miss payments because of the higher amounts, you could lost the house. It will delay your effort at building equity as well, and indeed could increase your debt to exceed the value of the property. Is student loan interest tax deductible like mortgage interest? Rotten idea Bad, once you get married or sign the contract the house becomes your and his responsibility. I know you are in love and think it will last forever, but should something go wrong, you will have paid off HIS loan (good for him) but have less equity in the house. Wait until you get married, but its not a bad idea if it saves you money monthly and the APR on your mortgage is better than the student loan. Using your home equity like that (in my opinion) is NEVER a good idea.....First do you really want to pay on a student loan and credit cards for the next 30 years?...And second, Unless you are planning on staying in that house for a long time (next 6-10 years) you may be borrowing more than you can sell the house for....So just in case you need a bigger house or loose your job and can not afford it or get a job transfer or what ever reason you may not be able to move....And that stinks!....Your home equity (in my opinion) should only be used to move up to a bigger house or perhaps start investing in rentals....Cash out your equity and buy some rental houses and let the renters pay your house payment and your student loans for you in their rent.....Good Luck....Just PLEASE be careful not to get upside down in your house (owe more than it is worth) |
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