I recently got married.  My wife has $100k of student loan debt from her Masters and also a house with $100k of equity.  We are looking to get on a good track to pay it off.  We see ourselves moving in approximately two years and I will be eligible for a VA loan in January.  A couple of tracks we're considering:


1. Home Equity line of Credit or Refinance. Tap into $50-60k of equity for the student loan which would leave about $40k to pay off.  Or pay off the entire loan with equity but that would make our monthly payment a little high for comfort.


2. Move. The housing market in our area (Atlanta) is very strong. Since we see ourselves moving in two years, should we consider moving early to avoid double closing costs (refinance then a new mortgage in two years). I will be eligible for the VA loan in January.


3. Sit on the student loan as it is and pay off as we can.


What is the best track to go down in order to get these student loans under control? I am leaning towards option #1 but would be open to any suggestions. Thanks.


Pay your bills first.

There are a lot of variables at play here, so it’s difficult to give you specific guidance without knowing your whole situation.


However, I can definitely understand your desire to get out from under the student loan debt.  Just don’t let that desire rush you into a move that doesn’t make sense for you and your wife. Take your time and evaluate all of your options.


Here are a few things to consider up front:


Move when it’s right.  Typically, people move because of a job change or to relocate to a new neighborhood or a bigger/different type of home.  If your plans for a couple years from now involve a bigger financial commitment, or may be subject to near term changes (employment, etc.), it wouldn’t seem prudent to accelerate your move.  


Home equity vs. Refinance. Typically, a home equity loan has much lower closing costs than refinancing…in the hundreds rather than thousands of dollars!


Are you taking advantage of student loan options? Depending on what you mean by “get these student loans under control” there may be options in the student loan arena that could help.  Income based repayment plans and consolidation are a couple of potential approaches that might help shore things up for you guys.  Among other things, your options will depend on the types of loans (Federal vs. private). Federal loans offer a number of features and flexibility that would make me hesitant to turn them into another type of debt (mortgage).


So, there’s so more food for thought…you could also talk through your specific situation with one of our representatives (800-771-9960). Good luck.