A 53-year-old warehouse manager and his 54-year-old wife carry about $370,000 in non-mortgage debt, including roughly $215,000 to $220,000 in law school loans, plus a $365,000 mortgage on a home worth in the mid-$400,000s. Their take-home pay is nearly $10,000 per month, with a $2,600 mortgage payment. If they pay $2,000 per month toward debts, the payoff timeline is about 15 years, and retirement planning is not funded while a $1,200 monthly 401(k) contribution has been stopped. Increasing payments to $7,000 to $8,000 per month can reduce the payoff window to roughly 3 to 4 years, requiring higher income and possibly selling the house.
"“If you pay $2,000 a month toward your debts, it's gonna take you 15 years,” he told the caller. The husband had already said he would live in a trailer or an RV to escape it. His wife was not there yet."
"“I would make it a goal to be out of this thing in less than 4 years, and that's going to take $8K a month getting thrown at this debt, which means upping the income. And maybe selling the house is just part of that game plan.”"
"At $2,000 a month against $370,000 in debt, it takes about 15 years just to clear principal, and that ignores interest accruing on student loans, credit cards, and auto debt during that decade and a half. At $7,000 to $8,000 a month, the payoff window collapses to roughly 3 to 4 years."
"The household carries $370,000 in non-mortgage debt, including roughly $215,000 to $220,000 in law school loans, on top of a $365,000 mortgage against a home worth in the mid-$400,000s. Take-home pay is almost $10,000 a month, with a $2,600 mortgage payment on top."
Read at 24/7 Wall St.
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