Sell a house to finance Law School? Forum

[jared6180]

I am a non-trad student, the wife and I have been living in our house for a while now and neither of us particularly like it because of the constant care and money needed to keep up a 100 year old house. It is worth $140k and we owe about $68k. We are thinking about selling and moving into a small 2br townhouse until law school is over. We would use the proceeds of the property sale to prepay a year at a time at law school…roughly $30k for three years. After that I would pay the needed tuition that grants and scholarship money doesn't cover and attempt to make it through with no new debt.

Would you guys do this? Neither of us wants to face the $100,000 debt and we really don't LOVE the house anyhow…

[BlakcMajikc]

I am a non-grad student, the wife and I have been living in our house for a while now and neither of us particularly like it because of the constant care and money needed to keep up a 100 year old house. It is worth $140k and we owe about $68k. We are thinking about selling and moving into a small 2br townhouse until law school is over. We would use the proceeds of the property sale to prepay a year at a time at law school…roughly $30k for three years. After that I would pay the needed tuition that grants and scholarship money doesn't cover and attempt to make it through with no new debt.

Would you guys do this? Neither of us wants to face the $100,000 debt and we really don't LOVE the house anyhow…

Personally, I would consult a real financial advisor to review your mortgage, the real estate market in your area, and other observations about the equity from your house more generally.

[fratstar1]

depends where you're going, probably. I wouldnt.

[jared6180]

I am a non-grad student, the wife and I have been living in our house for a while now and neither of us particularly like it because of the constant care and money needed to keep up a 100 year old house. It is worth $140k and we owe about $68k. We are thinking about selling and moving into a small 2br townhouse until law school is over. We would use the proceeds of the property sale to prepay a year at a time at law school…roughly $30k for three years. After that I would pay the needed tuition that grants and scholarship money doesn't cover and attempt to make it through with no new debt.

Would you guys do this? Neither of us wants to face the $100,000 debt and we really don't LOVE the house anyhow…

Personally, I would consult a real financial advisor to review your mortgage, the real estate market in your area, and other observations about the equity from your house more generally.

I spoke to a local guy who is supposed to be the best. He thinks our plan is generally good if we plan to leave the city. The quicker we unload the house the quicker we get started building equity in our long term property. He also suggested selling now before we are up against a dead line will allow us to take more offers and put us in a better negotiating position.

I also spoke with an attorney here in town and his reasoning was, If you are planning to move away after law school, then sell now before you enter law school because selling a house is stressful, and compounding that stress with law school stress could lead to making a bad decision or taking less than we could get.

[kcdc1]

If you're staying local for school, live in it through school and then sell it at the end if you want to avoid paying interest on your student loans. Otherwise, yeah, sell unless you have compelling reasons not to. (I'm not selling my house because we want to move back in after law school, and we should be able to pay down my debt over a few years without selling the house.)

[BlakcMajikc]

I am a non-grad student, the wife and I have been living in our house for a while now and neither of us particularly like it because of the constant care and money needed to keep up a 100 year old house. It is worth $140k and we owe about $68k. We are thinking about selling and moving into a small 2br townhouse until law school is over. We would use the proceeds of the property sale to prepay a year at a time at law school…roughly $30k for three years. After that I would pay the needed tuition that grants and scholarship money doesn't cover and attempt to make it through with no new debt.

Would you guys do this? Neither of us wants to face the $100,000 debt and we really don't LOVE the house anyhow…

Personally, I would consult a real financial advisor to review your mortgage, the real estate market in your area, and other observations about the equity from your house more generally.

I spoke to a local guy who is supposed to be the best. He thinks our plan is generally good if we plan to leave the city. The quicker we unload the house the quicker we get started building equity in our long term property. He also suggested selling now before we are up against a dead line will allow us to take more offers and put us in a better negotiating position.

I also spoke with an attorney here in town and his reasoning was, If you are planning to move away after law school, then sell now before you enter law school because selling a house is stressful, and compounding that stress with law school stress could lead to making a bad decision or taking less than we could get.

Makes sense. And no interest in hiring a management company and renting out the place?

[KD35]

For a decision like this, I wouldn't trust the advice of strangers on the Internet.

[jared6180]

For a decision like this, I wouldn't trust the advice of strangers on the Internet.

I am actually hoping someone bring an option that I haven't thought of. The lawyer and financial guy addressed my direct questions and offered to help in any way they could without really offering any other options.

BlakcMajikc, I thought about the rental option, however if something goes wrong I am still on the hook for any and all repairs, and honestly, I worry about things going wrong with me and my wife living here, much less with renters who will obviously demand a very quick repair that will almost always cost a bunch of $$$. In my view, I see this as also minimizing risk of an emergency situation with very little funding available. Selling eliminates that risk, and puts the risk on the new owners.

I am hoping to go to an out of town school, not terribly far away, but far enough I don't want to drive back and forth everyday.

[Clearly]

Personally, I would do it. You're dropping the interest payments on the remaining mortgage, and avoiding interest payments for school.
Only reason I wouldn't is if you actually like the house and want it long term, or have reason to believe its value will go up in the near future enough to clear the interest you would have paid on student loans, and then some. In that case, take the loans, wait till the market is better in your area, and use the proceeds of the sale to pay the loans and keep whatever is left over.

[Dingo Starr]

When I read the title, I thought "WUT?"
Then I read the rest, especially the part where you are sick of the damn thing, and now I like it.
I would just change the living situation to a tricked out RV or, if you're crafty, tiny house. Save mo money, mo bettah!

[JJ123]

DO NOT rent the property out. You would face the possibility of losing the capital gains exclusion on the sale of your primary residence.

[nouseforaname123]

Please clarify: what is your expected out of pocket cost and what are your employment prospects at the school you will be attending?

[eljefe1]

yes. double the speculation. while you're at it, you should start short selling apple stock.


edit: short sell apple stock to finance future short selling of apple stock. Then invest in house to increase value. THEN sell house. Continue to short sell apple stock with proceeds.