New associate banter

(On Campus Interviews, Summer Associate positions, Firm Reviews, Tips, ...)
Forum rules
Anonymous Posting

Anonymous posting is only appropriate when you are revealing sensitive employment related information about a firm, job, etc. You may anonymously respond on topic to these threads. Unacceptable uses include: harassing another user, joking around, testing the feature, or other things that are more appropriate in the lounge.

Failure to follow these rules will get you outed, warned, or banned.
User avatar
thesealocust
Posts: 8441
Joined: Mon Oct 20, 2008 8:50 pm

Re: New associate banter

Postby thesealocust » Sat Oct 05, 2013 4:10 pm

Fresh Prince wrote:Another "tip" (because I'm bored). One area I've been reading about (but haven't tested the waters of, which is why I put scarequotes around "tip") is Lending Club. No, don't borrow money through it. Rather, lend through it. From what I've seen, returns on a diversified lending portfolio beat standard student loan interest rates pretty easily.


I've heard the problem is defaults are statistically much more likely towards the end of the loan period, so people feel like financial wizards for a few months/years and then the actual return stabilizes a more sane level relative to the risk.

It's also an opportunity to be a very active investor because you can choose your own loans and try to figure out your own criteria, but it's competitive in that respect as well.

User avatar
guano
Posts: 2268
Joined: Mon Feb 18, 2013 9:49 am

Re: New associate banter

Postby guano » Sat Oct 05, 2013 4:12 pm

Fresh Prince wrote:Last tip.

If you have good credit and a sizable amount of cash for a downpayment, buy a house. When applying for a mortgage, ask for the bank to increase the size of the mortgage to pay off the student loan. If there's the right combination of real estate value in the property, equity from the down payment, and size of loan payoff, a bank will definitely consider this (I encountered success with Wells Fargo in the past).

Pros:
1) Lock in interest at around 3.5% interest.
2) Take advantage of those nice tax deductions related to home ownership and mortgage payment.
3) Combine your "rent" payments and "student loan payments" in one.

This is definitely advantageous if you can score property with a ton of investment upside.

The only con I could think of at the time was that if the government offered some sort of comprehensive student loan forgiveness program, you wouldn't be able to take advantage of it because your loans would no longer be "student loans."

Actually, you're losing money on the transaction. That extra cash you were sitting on should have been used to pay down your loan rather than sitting in savings earning you 0.25%

User avatar
Joe Quincy
Posts: 404
Joined: Thu May 16, 2013 10:42 am

Re: New associate banter

Postby Joe Quincy » Sat Oct 05, 2013 4:18 pm

guano wrote:
Fresh Prince wrote:Last tip.

If you have good credit and a sizable amount of cash for a downpayment, buy a house. When applying for a mortgage, ask for the bank to increase the size of the mortgage to pay off the student loan. If there's the right combination of real estate value in the property, equity from the down payment, and size of loan payoff, a bank will definitely consider this (I encountered success with Wells Fargo in the past).

Pros:
1) Lock in interest at around 3.5% interest.
2) Take advantage of those nice tax deductions related to home ownership and mortgage payment.
3) Combine your "rent" payments and "student loan payments" in one.

This is definitely advantageous if you can score property with a ton of investment upside.

The only con I could think of at the time was that if the government offered some sort of comprehensive student loan forgiveness program, you wouldn't be able to take advantage of it because your loans would no longer be "student loans."

Actually, you're losing money on the transaction. That extra cash you were sitting on should have been used to pay down your loan rather than sitting in savings earning you 0.25%


Not to mention, this violates FHA rules as well as, I believe, Fannie/Freddie rules unless your loan to value ratio stays under the limit (it definitely can't exceed the value of the property). So you're not likely to succeed if the bank plans to sell off the mortgage or have it underwritten. If it does stay under the limit, you may as well have simply paid off the loans with the cash and taken out a mortgage for 95% of the house or whatever. I don't think it would even save you P&I insurance because of how they calculate it.
Last edited by Joe Quincy on Sat Oct 05, 2013 4:19 pm, edited 1 time in total.

User avatar
Old Gregg
Posts: 5413
Joined: Thu Sep 01, 2011 1:26 pm

Re: New associate banter

Postby Old Gregg » Sat Oct 05, 2013 4:19 pm

Doesn't that assume you would do an FHA loan?

User avatar
Old Gregg
Posts: 5413
Joined: Thu Sep 01, 2011 1:26 pm

Re: New associate banter

Postby Old Gregg » Sat Oct 05, 2013 4:21 pm

guano wrote:
Fresh Prince wrote:Last tip.

If you have good credit and a sizable amount of cash for a downpayment, buy a house. When applying for a mortgage, ask for the bank to increase the size of the mortgage to pay off the student loan. If there's the right combination of real estate value in the property, equity from the down payment, and size of loan payoff, a bank will definitely consider this (I encountered success with Wells Fargo in the past).

Pros:
1) Lock in interest at around 3.5% interest.
2) Take advantage of those nice tax deductions related to home ownership and mortgage payment.
3) Combine your "rent" payments and "student loan payments" in one.

This is definitely advantageous if you can score property with a ton of investment upside.

The only con I could think of at the time was that if the government offered some sort of comprehensive student loan forgiveness program, you wouldn't be able to take advantage of it because your loans would no longer be "student loans."

Actually, you're losing money on the transaction. That extra cash you were sitting on should have been used to pay down your loan rather than sitting in savings earning you 0.25%


You assume I had the cash in a savings account, but point taken.

User avatar
Old Gregg
Posts: 5413
Joined: Thu Sep 01, 2011 1:26 pm

Re: New associate banter

Postby Old Gregg » Sat Oct 05, 2013 4:23 pm

Joe Quincy wrote:
guano wrote:
Fresh Prince wrote:Last tip.

If you have good credit and a sizable amount of cash for a downpayment, buy a house. When applying for a mortgage, ask for the bank to increase the size of the mortgage to pay off the student loan. If there's the right combination of real estate value in the property, equity from the down payment, and size of loan payoff, a bank will definitely consider this (I encountered success with Wells Fargo in the past).

Pros:
1) Lock in interest at around 3.5% interest.
2) Take advantage of those nice tax deductions related to home ownership and mortgage payment.
3) Combine your "rent" payments and "student loan payments" in one.

This is definitely advantageous if you can score property with a ton of investment upside.

The only con I could think of at the time was that if the government offered some sort of comprehensive student loan forgiveness program, you wouldn't be able to take advantage of it because your loans would no longer be "student loans."

Actually, you're losing money on the transaction. That extra cash you were sitting on should have been used to pay down your loan rather than sitting in savings earning you 0.25%


Not to mention, this violates FHA rules as well as, I believe, Fannie/Freddie rules unless your loan to value ratio stays under the limit (it definitely can't exceed the value of the property). So you're not likely to succeed if the bank plans to sell off the mortgage or have it underwritten. If it does stay under the limit, you may as well have simply paid off the loans with the cash and taken out a mortgage for 95% of the house or whatever. I don't think it would even save you P&I insurance because of how they calculate it.


Keep in mind it's pretty hard to score a mortgage for 95% of purchase price. In my experience, 20%-25% DP is the magic range, unless you're getting an FHA loan.

User avatar
Joe Quincy
Posts: 404
Joined: Thu May 16, 2013 10:42 am

Re: New associate banter

Postby Joe Quincy » Sat Oct 05, 2013 4:55 pm

Fresh Prince wrote:Doesn't that assume you would do an FHA loan?


Doesn't really matter. Fannie/Freddie follow FHA rules and almost all mortgages are underwritten by them. Even if that isn't the plan, most banks want the option of off-loading the loans to them or securitizing them (again FHA rules are default). And without an FHA loan, you'd likely need 15-20% down and they won't loan beyond that ratio so this plan would not work.
Last edited by Joe Quincy on Sat Oct 05, 2013 5:01 pm, edited 1 time in total.

User avatar
Joe Quincy
Posts: 404
Joined: Thu May 16, 2013 10:42 am

Re: New associate banter

Postby Joe Quincy » Sat Oct 05, 2013 4:56 pm

Fresh Prince wrote:
Joe Quincy wrote:
guano wrote:
Fresh Prince wrote:Last tip.

If you have good credit and a sizable amount of cash for a downpayment, buy a house. When applying for a mortgage, ask for the bank to increase the size of the mortgage to pay off the student loan. If there's the right combination of real estate value in the property, equity from the down payment, and size of loan payoff, a bank will definitely consider this (I encountered success with Wells Fargo in the past).

Pros:
1) Lock in interest at around 3.5% interest.
2) Take advantage of those nice tax deductions related to home ownership and mortgage payment.
3) Combine your "rent" payments and "student loan payments" in one.

This is definitely advantageous if you can score property with a ton of investment upside.

The only con I could think of at the time was that if the government offered some sort of comprehensive student loan forgiveness program, you wouldn't be able to take advantage of it because your loans would no longer be "student loans."

Actually, you're losing money on the transaction. That extra cash you were sitting on should have been used to pay down your loan rather than sitting in savings earning you 0.25%


Not to mention, this violates FHA rules as well as, I believe, Fannie/Freddie rules unless your loan to value ratio stays under the limit (it definitely can't exceed the value of the property). So you're not likely to succeed if the bank plans to sell off the mortgage or have it underwritten. If it does stay under the limit, you may as well have simply paid off the loans with the cash and taken out a mortgage for 95% of the house or whatever. I don't think it would even save you P&I insurance because of how they calculate it.


Keep in mind it's pretty hard to score a mortgage for 95% of purchase price. In my experience, 20%-25% DP is the magic range, unless you're getting an FHA loan.


Exactly. That's why this plan isn't feasible. While it would have worked in 2007, it just won't pass the new rules.

If you have 40% of the purchase price to maintain the ratio and have enough equity for them to pay off the loan (assuming it is 20% of the home value), why wouldn't you just pay off the loan and finance 80% of the house. Pre-crash, many banks would loan 120%+ of the home value assuming it would appreciate. Now getting 90% is like pulling teeth.

The only scenario I see this working in is if your parents, etc sold you the house at a discount for tax purposes. Then you'd be buying it for less than its value and would instantly have equity that could be tapped.

Sure you could maybe do this if you had like $5K in loans but the savings wouldn't really make it worth the effort. If you have $200K in student loans, you'd need a hell of a down payment to have enough equity.
Last edited by Joe Quincy on Sat Oct 05, 2013 5:05 pm, edited 2 times in total.

Anonymous User
Posts: 273083
Joined: Tue Aug 11, 2009 9:32 am

Re: New associate banter

Postby Anonymous User » Sat Oct 05, 2013 5:02 pm

Fresh Prince wrote: Keep in mind it's pretty hard to score a mortgage for 95% of purchase price. In my experience, 20%-25% DP is the magic range, unless you're getting an FHA loan.


An exception is the VA loan. You actually don't need a down payment for those.

User avatar
Joe Quincy
Posts: 404
Joined: Thu May 16, 2013 10:42 am

Re: New associate banter

Postby Joe Quincy » Sat Oct 05, 2013 5:03 pm

Anonymous User wrote:
Fresh Prince wrote: Keep in mind it's pretty hard to score a mortgage for 95% of purchase price. In my experience, 20%-25% DP is the magic range, unless you're getting an FHA loan.


An exception is the VA loan. You actually don't need a down payment for those.


Correct, but the funding fee makes them less attractive if you have a down payment (which this scenario requires). And, they follow FHA rules for ratio and condition of the property so they still wouldn't loan beyond the value of the house. There are also strict rules about pulling out equity for VA loans so the bank couldn't do this even if they wanted to...they are explicitly prohibited from rolling other debts into a new mortgage.

Not to mention you'd hit the upper dollar limit for VA loans if you were both financing a house in most markets and paying off any significant amount of student loans...if the rules permitted it.

User avatar
Old Gregg
Posts: 5413
Joined: Thu Sep 01, 2011 1:26 pm

Re: New associate banter

Postby Old Gregg » Sat Oct 05, 2013 6:35 pm

Way too tired to discuss/debate this right now (esp considering how apparently dogged Quincy is about these things), but will delve into the details when I have more patience/energy.

User avatar
Joe Quincy
Posts: 404
Joined: Thu May 16, 2013 10:42 am

Re: New associate banter

Postby Joe Quincy » Sat Oct 05, 2013 6:59 pm

.
Last edited by Joe Quincy on Sat Oct 05, 2013 9:40 pm, edited 1 time in total.

jd20132013
Posts: 997
Joined: Sat Oct 09, 2010 4:41 pm

Re: New associate banter

Postby jd20132013 » Sat Oct 05, 2013 7:24 pm

How are you guys holding up w/r/t keeping a solid workout schedule?

Do you think you're able to carve out 45-60 minutes 3-4 times a week?

dixiecupdrinking
Posts: 3139
Joined: Sun Oct 26, 2008 2:39 pm

Re: New associate banter

Postby dixiecupdrinking » Sat Oct 05, 2013 9:23 pm

jd20132013 wrote:How are you guys holding up w/r/t keeping a solid workout schedule?

Do you think you're able to carve out 45-60 minutes 3-4 times a week?

So far so good. Being willing to drag yourself out of bed at 6:30 AM helps, though I think that will dry up once the days start getting shorter and my work days start getting even longer.

DwightSchruteFarms
Posts: 284
Joined: Wed Jul 14, 2010 1:19 am

Re: New associate banter

Postby DwightSchruteFarms » Mon Oct 07, 2013 3:00 pm

jd20132013 wrote:How are you guys holding up w/r/t keeping a solid workout schedule?

Do you think you're able to carve out 45-60 minutes 3-4 times a week?


It took me 4 minutes to realize that you were not asking a question related to fantasy football. Sorry, but w/r/t, during the months between August and February, have an entirely different meaning for many of us haha

User avatar
Stanford4Me
Posts: 6043
Joined: Thu Jan 10, 2008 1:23 am

Re: New associate banter

Postby Stanford4Me » Mon Oct 07, 2013 3:32 pm

jd20132013 wrote:How are you guys holding up w/r/t keeping a solid workout schedule?

Do you think you're able to carve out 45-60 minutes 3-4 times a week?

I'm not a morning person so it has taken some time for me to successfully wake up early for a workout. I could workout after work, but I've usually got a lot of evening engagements.

jkay
Posts: 399
Joined: Mon May 03, 2010 2:47 pm

Re: New associate banter

Postby jkay » Tue Oct 08, 2013 10:33 pm

Sweet real estate investing advice. If it was still 2005.

Headybrah
Posts: 300
Joined: Mon May 25, 2009 5:14 pm

Re: New associate banter

Postby Headybrah » Wed Oct 09, 2013 9:16 pm

how long till one can expect to do cool stuff like taking depositions in big law?

User avatar
Big Shrimpin
Posts: 2468
Joined: Fri Oct 24, 2008 12:35 pm

Re: New associate banter

Postby Big Shrimpin » Wed Oct 09, 2013 9:32 pm

Headybrah wrote:how long till one can expect to do cool stuff like taking depositions in big law?


I did a few about 9 months in or so.

Totally unimportant 30(b)(1)/30(b)(6) witnesses, though.

Anonymous User
Posts: 273083
Joined: Tue Aug 11, 2009 9:32 am

Re: New associate banter

Postby Anonymous User » Thu Oct 10, 2013 4:24 pm

Started as a patent agent at a firm in DC about a month ago. I just took a look at my timecard and noticed that I've been billing about 50 hours a week. The kicker: I'm a 2LE.



Ugh. Bye bye grades.

Anonymous User
Posts: 273083
Joined: Tue Aug 11, 2009 9:32 am

Re: New associate banter

Postby Anonymous User » Thu Oct 10, 2013 4:28 pm

Posted this in another thread but figure this might be a better place to get an answer:

Quick question for you guys who have more recent experience with this. How much are you paying for healthcare (and how many people do you have covered) and what percentage is your firm subsidizing?

I am in the position of having an offer on the table that provides 100% payment of unbelievably good health/dental/life insurance and I am having difficulty valuing that benefit.

User avatar
IAFG
Posts: 6665
Joined: Mon Jun 15, 2009 1:26 pm

Re: New associate banter

Postby IAFG » Thu Oct 10, 2013 4:32 pm

Anonymous User wrote:Started as a patent agent at a firm in DC about a month ago. I just took a look at my timecard and noticed that I've been billing about 50 hours a week. The kicker: I'm a 2LE.



Ugh. Bye bye grades.

She doesn't even go here!

Anonymous User
Posts: 273083
Joined: Tue Aug 11, 2009 9:32 am

Re: New associate banter

Postby Anonymous User » Thu Oct 10, 2013 4:39 pm

Starting as a first year associate in NY. Am I crazy for thinking about a $2,400 apartment by myself? (no debt)

User avatar
gk101
Posts: 3675
Joined: Fri May 30, 2008 6:22 pm

Re: New associate banter

Postby gk101 » Thu Oct 10, 2013 4:40 pm

Anonymous User wrote:Starting as a first year associate in NY. Am I crazy for thinking about a $2,400 apartment by myself? (no debt)


With no debt, that sounds extremely reasonable for NYC.

User avatar
thesealocust
Posts: 8441
Joined: Mon Oct 20, 2008 8:50 pm

Re: New associate banter

Postby thesealocust » Thu Oct 10, 2013 4:44 pm

Anonymous User wrote:Starting as a first year associate in NY. Am I crazy for thinking about a $2,400 apartment by myself? (no debt)


Nope, that's absolutely in the range people pay.




Return to “Legal Employment”

Who is online

The online users are hidden on this forum.