All Forum Posts by: Ally Garcia

Thank you so much everyone for the insight and advice. I am a very very new to RE and investing in general and using Bigger Pockets as a general guideline for weighing options. Really appreciate ya'll taking the time to help me out in this situation. I'm going to ask for some followups but I apologize in advance if they seem silly or common sense to you. I am not use to RE terms so it will help if you just spell things out for me. Got my training wheels on and determined to make this work! :) 

@Yoochul C.
You said "If you're buying a condo.... would be nice if you could somehow add in the 35k in student loans. Or wait till you get some appreciation and do a cash out refi and pay off the loan assuming interest rates stay lower than your student loan rate."
Did you mean adding my $35k in student loans into or on top of a mortgage loan? What is that called? Do you mean getting a mortgage loan with small downpayment and pay off student loans at the same time - that will eventually wrap my student loan into a mortgage which is a typically lower interest rate that most student loans? How would I do that?

As for the second option, do you mean get the mortgage loan, pay PMI, student loans, AND mortgage and after 5 years (or whatever is required) I refinance my mortgage loan and use that money to pay off my student loan? Please explain. Thanks!

@Justin Fox
You said "Refinance the student loan to a lower rate and buy a property. If you get a good deal and good tenants you could split your cashflow between reinvesting and paying down your loan principle faster if you wanted. Seems like you have a healthy emergency savings plan, just do the same for your rental carrying costs and you'll be fine. I think you'll find that paying down 35k faster, just to get that same money back later, isn't worth it. No need to read a book. Using debt for income producing assets, good. Using debt for liabilities, bad. Have healthy savings account(s) to hedge against risk. Oh and don't carry a balance on credit cards."
I have a 3 month emergency plans, no balance on credit cards, no car payments, have good credit, and for REI only have about 3-5% down for $450k. My only debt is student loans. 
From your response above, did you mean that I should refinance my student loans and buy a duplex with tenants? I was thinking of getting a 2-3 bedroom, my boyfriend and I sharing 1 room and renting the others out. If I do go that route, are you suggesting to use that cashflow to pay off the mortgage (obviously) as well as my student loans at the same time, or just the mortgage? How would I use my debt for income producing assets exactly? 

@Jordan Decuir
You said "I am taking the approach of not accelerating the payments/payoff of my student loans and instead opting to use the cash to jnvest in real estate. The assumption that I am operating on is that my return is and will be much greater than the interest I am paying on the student loans as a result and it is working out very well for me. To eah their own however."
So are you paying off the bare minimum of your student loans and just  having to pay it off longer over time? And taking that money you are saving into a downpayment for a home or REI with a program like RealtyShares or Betterment?

@Frank Jiang How long ago did you buy your first primary for 5%? Just trying to gauge how long it took for you to refinance and try to get rid of your PMI. In regards for lowering my LTV, I live in LA so I think it's a hot market here.

@Charles Moore You recommend stop contributing to retirement savings all together? Or just my 401k roth? I think I will cancel my 401k roth and move to an IRA roth. As for the loan I am not thinking of keeping it long term, just to get my to my future house.

@Drew Cameron thats a great idea! do you happen to know which grants? would i apply/need to get those grants before getting pre-approved?

@Marcus Auerbach I definitely want to read a book investment book. I was debating between Kiyosaki, Dave Ramsey, or Ramit Sethi. Which is Kiyosaki's book?

@Manolo D.

They would just be roommates paying me for rent. Only I would be on the title. They will not be helping me with down payment, tenants.

Wow thanks for all the input! Really do appreciate it.

@Frank Jiang I think I am going to cancel my 401k and just start a Roth IRA instead. Really upsetting my job does not match at all. I rather take it into my own hands then. That being said, I've never dabbled into investing so I am pretty clueless. I hear that Betterment and Wealthfront are good options for automated investing based on my customized profile. What do you think?

Have you heard of Realtyshares? An investment option but for real estate. Not sure which way I will go. If you have any recommendations I would love to hear them!

In regards to the monthly mortgage my bother and boyfriend would just be roommates paying me for rent. Only I would be on the title. They will not be helping me with down payment.

Do you think a FHA or conventional would work better for me? The only thing with FHA I can never cancel mortgage insurance and less people accept it.

Or avoid mortgage insurance altogether while putting no money down by utilizing a combo loan. If you keep I first loan at 80% LTV or less, and add a second loan of 20% or less, I can still obtain 100% financing without paying PMI. Along with that, I'll most likely snag a lower blended mortgage rate by splitting the loan up.

am 28yrs old in LA working in marketing.

Right now I have about $20k in a high yield online savings and money market, and not exactly sure which I should focus on more - paying off student loans, saving to buy a house, or buy a smaller property like a condo now while interest rates are low.

So far I have been following a PIP plan:

P - Preparing for the unexpected by having an emergency fund 3-4 months of worth of living expenses (part of my $20k) and the proper insurance

I - Investing for the future by contributing 6% of my salary to 401k Roth after-tax (however unfortunately with no match)

P - And my only debt to pay off is my low interest rate student loans ($35k at 6.08% interest rate). I have no other debt! At the current rate I am paying it off I will be done in about 7-8 years (and I am also looking into refinancing for a better deal to find possible better options).

I also have a good high credit score so I want to take that to my advantage as well. I want to invest more in my future and I think real estate might be the best option. I want to take advantage the historic low interest housing rates and purchase a small condo before they rise (which will be around the election). As of now after my emergency fund, I have about 3-4% down of $450k (another part of my $20k), which I know is not ideal but I would want to take advantage of the low interest rates, plus I would be living with my boyfriend and brother who would be helping me pay it off/splitting it 3 ways.

If I do go this route and purchase something in 6 months which would the most cost effective way:

- Get a FHA with as little as 3.5% down, however it would hurt me that I could never cancel mortgage insurance, however at least it would be a tax-deductible expense when you itemize deductions on Schedule A.

- A conventional loan (also tax deductible) and try to take advantage of being able to cancel it with Automatic termination when my mortgage balance reaches 78% of the original value of the property (no appraisal) or Final termination when I reach the midpoint of my loan when it's interest-only product, have a balloon payment, or were given forbearance by my lender.

- Or avoid mortgage insurance altogether while putting no money down by utilizing a combo loan. If you keep I first loan at 80% LTV or less, and add a second loan of 20% or less, I can still obtain 100% financing without paying PMI. Along with that, I'll most likely snag a lower blended mortgage rate by splitting the loan up.

- I can look into the Bank of America No Fee Mortgage, a so-called no cost loan that doesn’t require mortgage insurance, presumably even if the loan exceeds 80% loan-to-value. The TD Right Step mortgage also allows a three percent down payment with no mortgage insurance required. However, these programs typically have the mortgage insurance built into the interest rate, so it’s not really free. Most homeowners these day opt for a second mortgage instead of doing one loan to avoid high interest rates and private mortgage insurance. The only real downside is the associated fees with a second mortgage, and the two separate payments.

So there are options to make it work if jumping on real estate is the best way to use my savings. Also, since I would be a first time home buyer I would work all the bells and whistles that come with it - including no closing costs. So I do not plan on paying that at all (I know of a lender that has done this for other family members who were firs time buyers). So should I get pre-approved now just to see where I stand so I can have a more realistic idea or no since it effects my credit?

I want to invest more in my future and I think now is a great opportunity for this since interest rates are the lowest it has been, but I'm not sure if jumping into real estate now is the way to go - or pay off student loans aggressively and get them out of the way or keep saving or invest in other systems. Looking for some serious direction.

Thanks again,

Ally

am 28yrs old in LA working in marketing.

Right now I have about $20k in a high yield online savings and money market, and not exactly sure which I should focus on more - paying off student loans, saving to buy a house, or buy a smaller property like a condo now while interest rates are low.

So far I have been following a PIP plan:

P - Preparing for the unexpected by having an emergency fund 3-4 months of worth of living expenses (part of my $20k) and the proper insurance

I - Investing for the future by contributing 6% of my salary to 401k Roth after-tax (however unfortunately with no match)

P - And my only debt to pay off is my low interest rate student loans ($35k at 6.08% interest rate). I have no other debt! At the current rate I am paying it off I will be done in about 7-8 years (and I am also looking into refinancing for a better deal to find possible better options).

I also have a good high credit score so I want to take that to my advantage as well. I want to invest more in my future but I don't know which way to focus:

1. Paying off student loans more aggressively, most of my savings

2. Invest in a more diverse portfolio like Betterment, Wealthfront, or RealtyShares

3. Save more for a house and still pay my student loans but at a lower amount

4. OR take advantage the historic low interest housing rates and purchase a small condo before they rise (which will be around the election). As of now after my emergency fund, I have about 3-4% down of $450k (another part of my $20k), which I know is not ideal but I would want to take advantage of the low interest rates, plus I would be living with my boyfriend and brother who would be helping me pay it off/splitting it 3 ways.

If I do go this route and purchase something in 6 months which would the most cost effective way:

- Get a FHA with as little as 3.5% down, however it would hurt me that I could never cancel mortgage insurance, however at least it would be a tax-deductible expense when you itemize deductions on Schedule A.

- A conventional loan (also tax deductible) and try to take advantage of being able to cancel it with Automatic termination when my mortgage balance reaches 78% of the original value of the property (no appraisal) or Final termination when I reach the midpoint of my loan when it's interest-only product, have a balloon payment, or were given forbearance by my lender.

- Or avoid mortgage insurance altogether while putting no money down by utilizing a combo loan. If you keep I first loan at 80% LTV or less, and add a second loan of 20% or less, I can still obtain 100% financing without paying PMI. Along with that, I'll most likely snag a lower blended mortgage rate by splitting the loan up.

- I can look into the Bank of America No Fee Mortgage, a so-called no cost loan that doesn’t require mortgage insurance, presumably even if the loan exceeds 80% loan-to-value. The TD Right Step mortgage also allows a three percent down payment with no mortgage insurance required. However, these programs typically have the mortgage insurance built into the interest rate, so it’s not really free. Most homeowners these day opt for a second mortgage instead of doing one loan to avoid high interest rates and private mortgage insurance. The only real downside is the associated fees with a second mortgage, and the two separate payments.

So there are options to make it work if jumping on real estate is the best way to use my savings. Also, since I would be a first time home buyer I would work all the bells and whistles that come with it - including no closing costs. So I do not plan on paying that at all (I know of a lender that has done this for other family members who were firs time buyers). So should I get pre-approved now just to see where I stand so I can have a more realistic idea or no since it effects my credit?

I want to invest more in my future and I think now is a great opportunity for this since interest rates are the lowest it has been, but I'm not sure if jumping into real estate now is the way to go - or pay off student loans aggressively and get them out of the way or keep saving or invest in other systems. Looking for some serious direction.

Thanks again,

Ally

am 28yrs old in LA working in marketing.

Right now I have about $20k in a high yield online savings and money market, and not exactly sure which I should focus on more - paying off student loans, saving to buy a house, or buy a smaller property like a condo now while interest rates are low.

So far I have been following a PIP plan:

P - Preparing for the unexpected by having an emergency fund 3-4 months of worth of living expenses (part of my $20k) and the proper insurance

I - Investing for the future by contributing 6% of my salary to 401k Roth after-tax (however unfortunately with no match)

P - And my only debt to pay off is my low interest rate student loans ($35k at 6.08% interest rate). I have no other debt! At the current rate I am paying it off I will be done in about 7-8 years (and I am also looking into refinancing for a better deal to find possible better options).

I also have a good high credit score so I want to take that to my advantage as well. I want to invest more in my future but I don't know which way to focus:

1. Paying off student loans more aggressively, most of my savings

2. Invest in a more diverse portfolio like Betterment, Wealthfront, or RealtyShares

3. Save more for a house and still pay my student loans but at a lower amount

4. OR take advantage the historic low interest housing rates and purchase a small condo before they rise (which will be around the election). As of now after my emergency fund, I have about 3-4% down of $450k (another part of my $20k), which I know is not ideal but I would want to take advantage of the low interest rates, plus I would be living with my boyfriend and brother who would be helping me pay it off/splitting it 3 ways.

If I do go this route and purchase something in 6 months which would the most cost effective way:

- Get a FHA with as little as 3.5% down, however it would hurt me that I could never cancel mortgage insurance, however at least it would be a tax-deductible expense when you itemize deductions on Schedule A.

- A conventional loan (also tax deductible) and try to take advantage of being able to cancel it with Automatic termination when my mortgage balance reaches 78% of the original value of the property (no appraisal) or Final termination when I reach the midpoint of my loan when it's interest-only product, have a balloon payment, or were given forbearance by my lender.

- Or avoid mortgage insurance altogether while putting no money down by utilizing a combo loan. If you keep I first loan at 80% LTV or less, and add a second loan of 20% or less, I can still obtain 100% financing without paying PMI. Along with that, I'll most likely snag a lower blended mortgage rate by splitting the loan up.

- I can look into the Bank of America No Fee Mortgage, a so-called no cost loan that doesn’t require mortgage insurance, presumably even if the loan exceeds 80% loan-to-value. The TD Right Step mortgage also allows a three percent down payment with no mortgage insurance required. However, these programs typically have the mortgage insurance built into the interest rate, so it’s not really free. Most homeowners these day opt for a second mortgage instead of doing one loan to avoid high interest rates and private mortgage insurance. The only real downside is the associated fees with a second mortgage, and the two separate payments.

So there are options to make it work if jumping on real estate is the best way to use my savings. Also, since I would be a first time home buyer I would work all the bells and whistles that come with it - including no closing costs. So I do not plan on paying that at all (I know of a lender that has done this for other family members who were firs time buyers). So should I get pre-approved now just to see where I stand so I can have a more realistic idea or no since it effects my credit?

I want to invest more in my future and I think now is a great opportunity for this since interest rates are the lowest it has been, but I'm not sure if jumping into real estate now is the way to go - or pay off student loans aggressively and get them out of the way or keep saving or invest in other systems. Looking for some serious direction.

Thanks again,

Ally

I am 28yrs old in LA working in marketing.

Right now I have about $20k in a high yield online savings and money market, and not exactly sure which I should focus on more - paying off student loans, saving to buy a house, or buy a smaller property like a condo now while interest rates are low.

So far I have been following a PIP plan:

P - Preparing for the unexpected by having an emergency fund 3-4 months of worth of living expenses (part of my $20k) and the proper insurance

I - Investing for the future by contributing 6% of my salary to 401k Roth after-tax (however unfortunately with no match)

P - And my only debt to pay off is my low interest rate student loans ($35k at 6.08% interest rate). I have no other debt! At the current rate I am paying it off I will be done in about 7-8 years (and I am also looking into refinancing for a better deal to find possible better options).

I also have a good high credit score so I want to take that to my advantage as well. I want to invest more in my future but I don't know which way to focus:

1. Paying off student loans more aggressively, most of my savings

2. Invest in a more diverse portfolio like Betterment, Wealthfront, or RealtyShares

3. Save more for a house and still pay my student loans but at a lower amount

4. OR take advantage the historic low interest housing rates and purchase a small condo before they rise (which will be around the election). As of now after my emergency fund, I have about 3-4% down of $450k (another part of my $20k), which I know is not ideal but I would want to take advantage of the low interest rates, plus I would be living with my boyfriend and brother who would be helping me pay it off/splitting it 3 ways.

If I do go this route and purchase something in 6 months which would the most cost effective way:

- Get a FHA with as little as 3.5% down, however it would hurt me that I could never cancel mortgage insurance, however at least it would be a tax-deductible expense when you itemize deductions on Schedule A.

- A conventional loan (also tax deductible) and try to take advantage of being able to cancel it with Automatic termination when my mortgage balance reaches 78% of the original value of the property (no appraisal) or Final termination when I reach the midpoint of my loan when it's interest-only product, have a balloon payment, or were given forbearance by my lender.

- Or avoid mortgage insurance altogether while putting no money down by utilizing a combo loan. If you keep I first loan at 80% LTV or less, and add a second loan of 20% or less, I can still obtain 100% financing without paying PMI. Along with that, I'll most likely snag a lower blended mortgage rate by splitting the loan up.

- I can look into the Bank of America No Fee Mortgage, a so-called no cost loan that doesn’t require mortgage insurance, presumably even if the loan exceeds 80% loan-to-value. The TD Right Step mortgage also allows a three percent down payment with no mortgage insurance required. However, these programs typically have the mortgage insurance built into the interest rate, so it’s not really free. Most homeowners these day opt for a second mortgage instead of doing one loan to avoid high interest rates and private mortgage insurance. The only real downside is the associated fees with a second mortgage, and the two separate payments.

So there are options to make it work if jumping on real estate is the best way to use my savings. Also, since I would be a first time home buyer I would work all the bells and whistles that come with it - including no closing costs. So I do not plan on paying that at all (I know of a lender that has done this for other family members who were firs time buyers). So should I get pre-approved now just to see where I stand so I can have a more realistic idea or no since it effects my credit?

I want to invest more in my future and I think now is a great opportunity for this since interest rates are the lowest it has been, but I'm not sure if jumping into real estate now is the way to go - or pay off student loans aggressively and get them out of the way or keep saving or invest in other systems. Looking for some serious direction.

Thanks again,

Ally