Student Loan Question
02-01-2008, 10:41 PM
#51
On Reserve
Joined APC: Dec 2007
Posts: 10
Buy A House
I think the best thing anybody with any debt can do is buy a house. If you're wife can qualify and your credit is still okay you should both buy the cheapest house you can find together. If your credit is messed up, then she should buy it on her own without you on the deed. Right now, most banks will give you a 6% loan on a 30 year mortgage. If you can find the right seller, they can even help you with the financing and could even put 10-20 thousand dollars cash in your hand from the sale. Once you own a piece of property, you can take out a home improvement loan. I live in CVG-- the city is offering all kinds of matching funds to do home improvements-- I just got 30K at 3% to fix up a house-- part of the money went into the rehab, the rest went to pay for airi ben.
Right now is the perfect time. I recomend being careful- because the threat of foreclosure is very real, but if there are two of you... or even someone else who will cosign a loan for you, I don't think you can go wrong buying a house. You have to pay rent to live somewhere anyway-- most likely what you pay for a mortgage will be less than that, and then within a year, you can borrow back all of the money that you have paid into the house as equity.
Step one-- find someplace cheap to buy-- something that you are comfortable enough to live in for 3 years, but something that justifiably needs work. (You have to be willing to do the work yourself)
step 2-- ask the seller if they are willing to finance the house-- be honest with them about your credit situation--- a lot of older retireees are so ancious to get out of their places they will help you out---
step 3 if the seller will help you-- agree to a higher than asking price for the house --mayby 10 to 15 over what they want-- borrow the total amount, the extra 10 to 15 would then go to pay your ove due loans immediatly and get you out of collections from Sallie Mae or Key Bank
since a mortgage is spread out over 30 years at a great rate (5.8 - 7%) the loan amount is really a low monthly payment.
step 4 --9 months later, after you have been making solid payments and doing some minor cosmetic improvements to the place-- get the house reappriased-- If you have done any improvements to the house at all, the value will be more than you paid-- at this point, you want to apply for a home improvement loan-- get a contractor to write up an estimate to do some additional improvements-- with the financial equity (constant on time mortgage payments and sweat equity-- work that you have done arround the house) you have improved the value of the property, and your own credit risk to a lender. You can now get a decent rate on a home improvement loan for probably about 30-50k at 3%. Use that 30K to pay back the ballance of your school loan.. it will mean an increase in your monthly payment as a second mortgage, but 3% is way better than what ever you are paying now.
In about a year to 18 months, you have enough to pay back your entire flight school loan-- it will actually be absorbed into a 30 year mortgage that you should refinance again after making on-time payments for about 3 years--- If the housing market bounces back-- and you have been fixing up the house-- you will completely pay off your loan when you sell the house and buy something bigger and better when its time to upgrade to CA (same 3 years)
Right now is the perfect time. I recomend being careful- because the threat of foreclosure is very real, but if there are two of you... or even someone else who will cosign a loan for you, I don't think you can go wrong buying a house. You have to pay rent to live somewhere anyway-- most likely what you pay for a mortgage will be less than that, and then within a year, you can borrow back all of the money that you have paid into the house as equity.
Step one-- find someplace cheap to buy-- something that you are comfortable enough to live in for 3 years, but something that justifiably needs work. (You have to be willing to do the work yourself)
step 2-- ask the seller if they are willing to finance the house-- be honest with them about your credit situation--- a lot of older retireees are so ancious to get out of their places they will help you out---
step 3 if the seller will help you-- agree to a higher than asking price for the house --mayby 10 to 15 over what they want-- borrow the total amount, the extra 10 to 15 would then go to pay your ove due loans immediatly and get you out of collections from Sallie Mae or Key Bank
since a mortgage is spread out over 30 years at a great rate (5.8 - 7%) the loan amount is really a low monthly payment.
step 4 --9 months later, after you have been making solid payments and doing some minor cosmetic improvements to the place-- get the house reappriased-- If you have done any improvements to the house at all, the value will be more than you paid-- at this point, you want to apply for a home improvement loan-- get a contractor to write up an estimate to do some additional improvements-- with the financial equity (constant on time mortgage payments and sweat equity-- work that you have done arround the house) you have improved the value of the property, and your own credit risk to a lender. You can now get a decent rate on a home improvement loan for probably about 30-50k at 3%. Use that 30K to pay back the ballance of your school loan.. it will mean an increase in your monthly payment as a second mortgage, but 3% is way better than what ever you are paying now.
In about a year to 18 months, you have enough to pay back your entire flight school loan-- it will actually be absorbed into a 30 year mortgage that you should refinance again after making on-time payments for about 3 years--- If the housing market bounces back-- and you have been fixing up the house-- you will completely pay off your loan when you sell the house and buy something bigger and better when its time to upgrade to CA (same 3 years)
06-03-2008, 12:17 AM
#52
Line Holder
Joined APC: Jan 2008
Posts: 94
Hey guys, need some help and would like to bring this thread back from the dead. I would like to hear your horror stories about loans and how you fixed them. I'm about 55k in debt and would like to hear some options from the crowd. Did you do a consolidation loan? If so is it working? Who is it by? Please add links! Thank you!
06-03-2008, 12:46 AM
#54
Gets Weekends Off
Joined APC: Aug 2006
Position: B777 FO FDX, C130 ANG
Posts: 538
Guard
Get into the Guard and use the student loan repayment program. I think it is 20K. You should have been in while you were in school, but it is a good deal. Find a job that is relatively safe and in need, and put your money you earn in school towards the debt too. Then go back to the airline at year 2 pay.
06-03-2008, 12:47 AM
#55
Line Holder
Joined APC: Mar 2008
Posts: 63
Originally Posted by acs020
Hey guys, need some help and would like to bring this thread back from the dead. I would like to hear your horror stories about loans and how you fixed them. I'm about 55k in debt and would like to hear some options from the crowd. Did you do a consolidation loan? If so is it working? Who is it by? Please add links! Thank you!
Has anyone used this route before? Did it all work out good? Does the VA give you living expense money also while going to school?
06-03-2008, 08:02 AM
#56
Need More Flight Time!
Joined APC: Jan 2006
Position: Flight Simulator X
Posts: 400
I gave up on the whole flying career because it makes zero financial sense at this point. I'm fortunate enough to get back into the technology game and making my pre-dream-of-airline-pilot-career days salary. Still paying the huge debt I left CAPT with but at least my credit rating is excellent and making my monthly insane payments.
I advise anyone who is considering a career in aviation to leave the dream of flying for a career aside and get the financial math worked out first. Once the math makes sense, you can go on with that dreamy eyed endeavor. Taking on this huge debt effectively placed me out of any possibility of making the career work on what they pay FOs. But I have CAPT's mismanagement to thank for that one. Had they met their 10-12 month program promise (not to mention those 7-9 guaranteed regional airline interviews that they didn't have), I might have made it. Do the math first.
For those who are in my shoes, I've looked everywhere and short of consolidating my 15 years variable to 30 years fixed, I found no other options. Going 15 to a 30 fixed made no sense either because at the end of the day, what you bought is time and a lower monthly payment (in my case, a savings of about $100 a month). And if you only make the minimum payments, it'll cost you a lot more over time. Everyone's situation is a bit different. So you'll have to do the math to figure out what solution out there will work out best for you.
And once again, for those looking to get started, do the math before you find yourself on this message board like me looking for answers to a problem, ultimately, that I created. Had I not attended CAPT, I'd still be happily flying, making some serious bank, and kickin' it big time. Oh well...live and learn.
I advise anyone who is considering a career in aviation to leave the dream of flying for a career aside and get the financial math worked out first. Once the math makes sense, you can go on with that dreamy eyed endeavor. Taking on this huge debt effectively placed me out of any possibility of making the career work on what they pay FOs. But I have CAPT's mismanagement to thank for that one. Had they met their 10-12 month program promise (not to mention those 7-9 guaranteed regional airline interviews that they didn't have), I might have made it. Do the math first.
For those who are in my shoes, I've looked everywhere and short of consolidating my 15 years variable to 30 years fixed, I found no other options. Going 15 to a 30 fixed made no sense either because at the end of the day, what you bought is time and a lower monthly payment (in my case, a savings of about $100 a month). And if you only make the minimum payments, it'll cost you a lot more over time. Everyone's situation is a bit different. So you'll have to do the math to figure out what solution out there will work out best for you.
And once again, for those looking to get started, do the math before you find yourself on this message board like me looking for answers to a problem, ultimately, that I created. Had I not attended CAPT, I'd still be happily flying, making some serious bank, and kickin' it big time. Oh well...live and learn.
06-03-2008, 08:09 AM
#57
Gets Weekends Off
Thread Starter
Joined APC: Jul 2007
Position: CRJ900/FO
Posts: 159
Originally Posted by evh347
UPDATE...
I was able to refinance with http://educationfinancepartners.com/ at a variable 7.36% over 30 years...a far cry from the 11.2% I was at with Great Lakes. I'm now looking at a monthly payment of $375...again, a far cry from the $642/mo with Great Lakes. Sallie Mae and Citibank's interest rates were higher so I let those options go. I came close to trying www.nelnet.net/private/default.asp as an option...they seemed to have good interest rates too, but at the time that I applied with them I was beyond 30-days current and their online application service immediately denied my application. For anyone not in that situation, I'd recommend checking them out.
All of that came at the price of having my parents co-sign for me and borrowing $2000 from them to get the account 30-days current. All of you people out there waiting for the problem to go away...don't, because it only gets more difficult to refinance this thing if it's not within 30-40 days past due.
There goes my tax return...ah, well...my tax return was gone anyways had I done nothing. Thank god for the Bush $1200 tax rebates coming in May/June. The good thing is that the Feds might be dropping interest rates soon due to the foreclosure chaos sweeping the nation, so that might help me too.
I was able to refinance with http://educationfinancepartners.com/ at a variable 7.36% over 30 years...a far cry from the 11.2% I was at with Great Lakes. I'm now looking at a monthly payment of $375...again, a far cry from the $642/mo with Great Lakes. Sallie Mae and Citibank's interest rates were higher so I let those options go. I came close to trying www.nelnet.net/private/default.asp as an option...they seemed to have good interest rates too, but at the time that I applied with them I was beyond 30-days current and their online application service immediately denied my application. For anyone not in that situation, I'd recommend checking them out.
All of that came at the price of having my parents co-sign for me and borrowing $2000 from them to get the account 30-days current. All of you people out there waiting for the problem to go away...don't, because it only gets more difficult to refinance this thing if it's not within 30-40 days past due.
There goes my tax return...ah, well...my tax return was gone anyways had I done nothing. Thank god for the Bush $1200 tax rebates coming in May/June. The good thing is that the Feds might be dropping interest rates soon due to the foreclosure chaos sweeping the nation, so that might help me too.
Life seems so much brighter without the bill collectors calling every day. Don't wait, get out any way you can.
Last edited by evh347; 06-03-2008 at 08:52 AM.
06-03-2008, 08:26 AM
#58
Prime Minister/Moderator
Joined APC: Jan 2006
Position: Engines Turn Or People Swim
Posts: 39,293
Originally Posted by Flying Ninja
I advise anyone who is considering a career in aviation to leave the dream of flying for a career aside and get the financial math worked out first. Once the math makes sense, you can go on with that dreamy eyed endeavor. Taking on this huge debt effectively placed me out of any possibility of making the career work on what they pay FOs. But I have CAPT's mismanagement to thank for that one. Had they met their 10-12 month program promise (not to mention those 7-9 guaranteed regional airline interviews that they didn't have), I might have made it. Do the math first.
) of being a "hobbiest" who only does aviation for fun, and is undercutting the industry. Quite the contrary...I always wanted to fly, but couldn't swing it economically without committing what I considered financial suicide. When I could pay for it all, and float myself through the regional years, only then did I go for it. I did the math pre-9/11...the numbers have obviously changed but the principle still applies. The math is even more important now, because in the old days if you got a little sideways financially, all you had to do was gut it out to year 2 at the major and all your problems would be solved. Not anymore...unless you have solid, high-level, connections at FDX/UPS/SWA you need to plan your finances based on a regional career, with a possible transition to corporate. If you get lucky later, great...but don't be a typical pilot-idiot and automatically assume that YOU will end up in the top 10% of the industry. Hope for the best (I'm an optimist), but plan for the not-so-best.
06-03-2008, 09:41 AM
#59
Need More Flight Time!
Joined APC: Jan 2006
Position: Flight Simulator X
Posts: 400
I just went to http://educationfinancepartners.com/ to seek out their private student loan consolidation and got this:
"We're sorry. We are temporarily not accepting applications."
Tough times I guess. I also went to ACS (https://www.acs-education.com/CS/Jsp/general/home.jsp). You're pretty much buying time with their program. In my case, I would be paying them almost 45% of my principal at the end of 30 years. Granted, there are no pre-payment penalties (something to look out for), but it's not a chance I'm willing to take.
Still interested in other suggestions, however!
"We're sorry. We are temporarily not accepting applications."
Tough times I guess. I also went to ACS (https://www.acs-education.com/CS/Jsp/general/home.jsp). You're pretty much buying time with their program. In my case, I would be paying them almost 45% of my principal at the end of 30 years. Granted, there are no pre-payment penalties (something to look out for), but it's not a chance I'm willing to take.
Still interested in other suggestions, however!
06-03-2008, 10:36 AM
#60
looking for underboob
Joined APC: Aug 2007
Position: NYC 7ER LCA
Posts: 900
Originally Posted by evh347
Glad to see this thread is still going. Another quick update...my refinance with ACS (https://www.acs-education.com/CS/Jsp/general/home.jsp), also "Education Finance Partners", turned out to be one of the best decisions. Interest rates fell as previously thought and my monthly payment (for the next 36 months) fell to $231.65 at a variable 5.11% interest rate. I never thought a "variable" rate would be so beneficial for me. Now, remember that I was struggling with "US Bank/Great Lakes" 11.2% just 5 months ago.
Life seems so much brighter without the bill collectors calling every day. Don't wait, get out any way you can.
Life seems so much brighter without the bill collectors calling every day. Don't wait, get out any way you can.
They freed me from Sallie Mae which is a horrible company
Best thing is my loan is around 4.5% and my payments never change just the time line which is around 17 more years
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