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Author: Leguleius Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 886533  
Subject: Financial Cross-Roads... Need advice Date: 12/27/1999 5:43 PM
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Here's the short version:

I'm right out of professional school. Put myself through, and worked during school, but still have about $65,000 in student loan debt (which I pay out in $475/mo payments), as well as about $4,000 in credit card debt (down from about $8,000 two months ago when I started to become "Foolish" by reading these boards).

I've recently become engaged, and my fiance' and I found out three weeks later that we have a child on the way. (We are overjoyed, although our families wish we hadn't put the "cart before the horse," so to speak). Being a firm believer in LBMM, I saved a great deal on the engagement ring by purchasing it using cash and buying from an acquaintance who is a diamond wholesaler. At any rate, I've still got about $2500 in savings, and my fiance' has $3500, but is herself a student, and will be for the next three years.

We both drive used cars that are paid off in full, and are reasonably cheap to maintain. Her credit is pristine, while my own has one "late-pay" indication from a few years back. Other than a few small store-card debts, we don't have any other pressing obligations.

Right now, we'd like to buy a house. I'm torn, however, as our limited cash situation right now means we'd have to take an 80-20 piggyback loan and pay more interest. Part of me thinks it would be better to my own reserves to pay off the credit card debt (which is currently at 14% interest), and then save for a more substantial down payment in about a year or two. The other part of me is looking at housing in my area, and recognizing that if it keeps appreciating the way it has for the last few years, we'll soon be priced out of the market (housing is going up more than 10% a year). I'm tempted to do anything possible to get into a house at the current market rates (including paying higher interest for low down-payment loans), and then re-fianance once the home has appreciated and/or we've save some more cash.

In the meantime, we want to put ourselves in the best position to care for our child when it arrives. Any advice?
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