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I'm in school p/t for education. I'm also working p/t, but w/long hours, long commute, and travel requirements, it's basically normal f/t hours.<br><br>
What are people's thoughts on getting a mortgage so that I could take more classes, make the career change sooner? We currently own outright.<br><br>
I know it's not ideal, but the current situation is so tough on me and the kids. I don't get home until 7:30 or 8 o'clock at night. Improving my hours is not possible at my current job, or in my current field.<br><br>
If I got a loan & quit my current job I might be able to get a truly p/t job to bring in some $$ & pay off the loan faster while also getting through school faster.<br><br>
Thoughts?
 

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As someone with a ton of student loan debt (private schools for both undergrad and grad school--although I got the lowest rate in history for my consolidation!), I think that this is one of those instances in which it might make sense to take out a mortgage. I understand the old caveat of "don't turn unsecured debt into secured debt, especially if it's your home on the line," but this would be a chance for you to improve your situation, your family life and to invest in yourself, your education and the well being of your DC in a way that is tax deductible. People refinance all the time to take cash out so one parent can SAH, so what's the difference here? None! <img alt="" class="inlineimg" src="http://www.mothering.com/discussions/images/smilies/smile.gif" style="border:0px solid;" title="smile"><br><br>
I'd say if you can get a good fixed rate mortgage (or HELOC), go for it, but be realistic and conservative about how much you really need and don't borrow any more than that. It seems like a better deal than student loans, especially with the recent rate hikes, and SLs are probably your only other option, other than keeping up the hectic pace of life you seem to have now! Good luck and let us know how it turns out!
 

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If I understand what you are thinking about doing, I would proceed very, very slowly with this idea.<br><br>
What you are saying is that you would get a loan (based on a certain level of income) and then decrease this level of income (I'm assuming you're staying in this job right now because the money is good?) just at the time when you are required to pay the money back. I don't understand how just finding a different part-time job that doesn't require so much commuting isn't the first option.<br><br>
Risky.<br><br>
First of all, you are not going to be getting a mortgage, you will be getting a home equity loan, using your home as leverage. This means that you are not going to be getting these great low rates you see advertised. You'll most likely be paying a prime + X%. You may have available to you, student loans that would be a lower rate. Maybe, maybe not. I've been reading the last few days about education loans and realize that you *probably* are not eligible for government subsidized loans.<br><br>
Secondly, if you get a HELOC loan, you have just taken a completely secure asset and potentially put it on the chopping block. I'm not a big advocate of owning a home outright, but you already do. It is yours and if you are ever in dire straits, nobody can kick you out.<br><br>
Thirdly, mortgage interest is tax deductible, but you have to itemize on your taxes to get it (and I'm not so sure Congress is going to protect this little perk for much longer). Student loans are a deduction that doesn't require you to itemize your deductions (what is this called, accountants, "line item deduction"?)<br><br>
I feel it is a risky trade - equity for education. A lot of people do it, though. A lot of people lose a lot of money because if it.<br><br>
I'd explore every other option of financing school before doing this. I totally understand WHY you'd want to do it, though. Your situation sounds brutal. I hope you find a good solution soon and still are able to keep this wonderful security you have by owning your home. Good luck!
 

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Discussion Starter #4
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<div>Originally Posted by <strong>velochic</strong> <a href="/community/forum/post/7976716"><img alt="View Post" class="inlineimg" src="/community/img/forum/go_quote.gif" style="border:0px solid;"></a></div>
<div style="font-style:italic;">If I understand what you are thinking about doing, I would proceed very, very slowly with this idea.<br><br>
What you are saying is that you would get a loan (based on a certain level of income) and then decrease this level of income (I'm assuming you're staying in this job right now because the money is good?) just at the time when you are required to pay the money back. I don't understand how just finding a different part-time job that doesn't require so much commuting isn't the first option.<br><br>
Risky.<br><br>
First of all, you are not going to be getting a mortgage, you will be getting a home equity loan, using your home as leverage. This means that you are not going to be getting these great low rates you see advertised. You'll most likely be paying a prime + X%. You may have available to you, student loans that would be a lower rate. Maybe, maybe not. I've been reading the last few days about education loans and realize that you *probably* are not eligible for government subsidized loans.<br><br>
Secondly, if you get a HELOC loan, you have just taken a completely secure asset and potentially put it on the chopping block. I'm not a big advocate of owning a home outright, but you already do. It is yours and if you are ever in dire straits, nobody can kick you out.<br><br>
Thirdly, mortgage interest is tax deductible, but you have to itemize on your taxes to get it (and I'm not so sure Congress is going to protect this little perk for much longer). Student loans are a deduction that doesn't require you to itemize your deductions (what is this called, accountants, "line item deduction"?)<br><br>
I feel it is a risky trade - equity for education. A lot of people do it, though. A lot of people lose a lot of money because if it.<br><br>
I'd explore every other option of financing school before doing this. I totally understand WHY you'd want to do it, though. Your situation sounds brutal. I hope you find a good solution soon and still are able to keep this wonderful security you have by owning your home. Good luck!</div>
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I should clarify. I was working f/t at my current job before DS was born. The starting teacher's salary will be a pay cut from my f/t salary, but an increase from my p/t salary. On my f/t salary, we were able to save quite a bit, and basically had "extra." The starting teacher salary will not be lavish, but will be comfortable for us. My current p/t salary is a smidge tight, but kind of manageable.<br><br>
My tuition is fairly low, so it's not the tuition that's the problem but our living costs. I don't think I'd want a HELOC, b/c that seems like an invitation to keep it open forever. We could take probably less than 20% out on our home, as a home equity loan, to get us through the next couple of years while I studied. If I found a p/t job w/better hours, we would just expedite paying back the loan.<br><br>
Thanks for all the thoughts! Still thinking, thinking...I'm definitely not going to rush into this!
 

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Are you taking out student loans? I quit working when ds1 was born with the intent of staying home FT. Money got tight, so we decided I should do home daycare. I started the certification process and decided I just couldn't do it. I looked into funding school and the loans/grants I was eligible for was more than enough to pay for my schooling. School loans can be used to pay books, tuition, and other living/educational expenses like computers, transportation (either car, carpayments or public transportation expenses).<br><br>
We crunched the numbers, maxed student loans and used that to supplement dh's income for 3 years. I'm now a 1st year teacher and will be starting to pay back that money soon. I'm not happy how far in debt it took us, but I needed to go back to work eventually and I wanted to do something I liked, would be rewarding, etc. It was the only way I'd ever make it back to school as working FT and school would be nearly impossible for me with a family.
 

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If you took out a mortgage it would mean a monthly mortgage payment and paying interest on top of it. If I were in your postition I would take out student loans, they have no interest or payments due until 6 months after you finish school. Then you could either pay them off slowly after that or you could take out a mortgage on you home THEN when you would have an easier time making the payments. It would save you the most in the long run, and in my opinion would be the best financial decision.
 

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How will you make the payments on the loan while you are not working?<br><br>
Is there a way to take out student loans instead? I believe that would be better for you for a couple of reasons- deferred payment, lower interest rates, deductible off the top of income was a line item deduction to AGI.
 

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<div style="margin:20px;margin-top:5px;">
<div class="smallfont" style="margin-bottom:2px;">Quote:</div>
<table border="0" cellpadding="6" cellspacing="0" width="99%"><tr><td class="alt2" style="border:1px inset;">
<div>Originally Posted by <strong>JaneyHD</strong> <a href="/community/forum/post/7981187"><img alt="View Post" class="inlineimg" src="/community/img/forum/go_quote.gif" style="border:0px solid;"></a></div>
<div style="font-style:italic;">I should clarify. I was working f/t at my current job before DS was born. The starting teacher's salary will be a pay cut from my f/t salary, but an increase from my p/t salary. On my f/t salary, we were able to save quite a bit, and basically had "extra." The starting teacher salary will not be lavish, but will be comfortable for us. My current p/t salary is a smidge tight, but kind of manageable.<br><br>
My tuition is fairly low, so it's not the tuition that's the problem but our living costs. I don't think I'd want a HELOC, b/c that seems like an invitation to keep it open forever. We could take probably less than 20% out on our home, as a home equity loan, to get us through the next couple of years while I studied. If I found a p/t job w/better hours, we would just expedite paying back the loan.<br><br>
Thanks for all the thoughts! Still thinking, thinking...I'm definitely not going to rush into this!</div>
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Okay, bear with me here. I'm trying to understand this:<br><br>
1. You now have a part-time job and you're just comfortable making ends meet at this point, but the hours are hell and you want to quit to get through school faster.<br>
2. You want to take out a loan which you will have to immediately start paying back.<br>
3. You will use the very money that you just took out in a loan to pay back that loan, but with interest. But you will have a little more comfort money.<br><br>
These days banks don't just give you a home equity loan. They open a home equity line of credit. They *want* you to use as much of it as possible and they're not going to to take no for an answer. If you went to get a loan, they would likely say, "You can borrow up to 80% of your equity. Here's a debit card... start buying!" You might say, "No, I only want $10,000." And they'll say, "Then stop spending at $10,000." You'll have to discipline yourself about how much to spend.<br><br>
My opinion - what you're doing is too risky. Get an education loan or tighten the wallet.
 
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