Home     Forum     401k     401k Rollovers
    Register   Login   Members   Search   FAQs     Recent Posts    




Refinance to pay for college

Reply to topic
Money Talk > Personal Finance

Author Thread
Kevin Shulman
First Time Poster


Cash: $ 0.25

Posts: 1
Joined: 28 Aug 2010

Refinance to pay for college  Reply with quote  

I have a house worth $450,000.
I have a 4 1/8% loan .
The balance is $125,000, which will be paid off in 7 years.

My daughters are 17 and 14.
I have no college savings now.

Should I refinance now at the low rates back to 15 or 30 years,
and take out $150,000 to $200,000 in equity to pay for future
college expenses?
Post Sat Aug 28, 2010 4:32 pm
 View user's profile Send private message
oldguy
Senior Member


Cash: $ 748.85

Posts: 3641
Joined: 21 May 2006
Location: arizona
 Reply with quote  

Maybe.

Check govt student loans, they are notoriously cheap, the rate might be <3%, and the terms are nearly as long as a mortgage, about 20 yrs.

Perhaps you should do both - that depends on your other assets. You have $325,000 of your Net Worth in real estate. If your other investments are only $100,000 that means 3/4 of your NW is in RE - so you are poorly diversified. But if you have $700,000 in investments, that means only 1/3 of your NW is in RE, that's better.
Post Sun Aug 29, 2010 1:00 am
 View user's profile Send private message
moonraker1
Full Member


Cash: $ 16.00

Posts: 79
Joined: 21 Aug 2010

 Reply with quote  

Whichever saves you money, then do it first. If i were you, i would pay college in cash and refinance the house in a lower interest rate. Right now is around 5%.
Post Mon Aug 30, 2010 4:10 am
 View user's profile Send private message
BryanM
First Time Poster


Cash: $ 0.20

Posts: 1
Joined: 30 Aug 2010

 Reply with quote  

Nowadays, it's very crucial to have fund for you children's future education. Nevertheless, it's an advantage to refinance your house at the low rates. Now, my advice is to consider the pros and cons of the two, before you choose which will come first. It's really hard to be in such circumstance, especially when money is involved. No one wants to regret in the end, so it's better to think it twice, thrice or as much as possible a millions times.
Post Mon Aug 30, 2010 4:47 am
 View user's profile Send private message
James00
New Member


Cash: $ 1.00

Posts: 5
Joined: 22 Sep 2010

 Reply with quote  

The best option for you is to take student loan for your daughter's studies.
Post Tue Oct 12, 2010 7:04 am
 View user's profile Send private message
CaliChristian
Full Member


Cash: $ 9.45

Posts: 60
Joined: 29 Jul 2010
Location: California
 Reply with quote  

The best investment, nowadays, is in education. So whatever you do decide, I commend you on thinking about your daughters' education and future.
Post Tue Oct 12, 2010 10:06 pm
 View user's profile Send private message
topuser
New Member


Cash: $ 0.60

Posts: 3
Joined: 13 Oct 2010

 Reply with quote  

I guess that you know better what you have to do in the future.
It is recommended to think about their education, too.
Next year you will have a student in family.
Post Wed Oct 13, 2010 2:42 pm
 View user's profile Send private message
littleroc02us
Moderator


Cash: $ 384.35

Posts: 1891
Joined: 09 Feb 2009

 Reply with quote  

I would say yes to your question, if you don't expect your kids to work and cover any of their college expenses and if you want to put your house at risk, if you were to become jobless. Personally, I would make a deal with them that you will pay half of their college expenses up to a certain cap based on the average cost of state schools.

Risk comes from not knowing what you're doing. (Warren Buffet)
Post Thu Oct 14, 2010 4:02 pm
 View user's profile Send private message

Reply to topic
Forum Jump:
Jump to:  
  Display posts from previous:      





Money Talk © 2003-2018