Don’t Let Student Loan Debt Hold You Back

  • Getting a Mortgage Just Got Easier

  • Refinance Now and Save Considerable Money

  • You May Be Able to Trade Higher Rates For Lower Rates

student-loan-debt.jpg
Asset 2_3x.png

43 Million Americans Have Student Loans

Asset 1_3x.png

$1.6 Trillion In Student Loan Debt Outstanding

 

Source: US Dept of Education

Asset 3_3x.png

6 out of 10 college seniors who graduated from public and private non-profit colleges in 2019 have student loan debt.

 

Source: Institute for College Access & Success

Why It Just Became Easier For Students, and Past Students, to Get A Mortgage

When taking out a mortgage you are assessed on your ability to repay. If you have student loan debt, this debt is taken into consideration when estimating how much of a mortgage you can qualify for. 

 

Until recently, the FHA assumption was that if you had student loans you weren’t repaying yet, and the monthly required payment was unknown, 1% of the total amount would be your estimated payment. Knowing that you had to pay this amount toward your student loan would reduce the amount of mortgage you could then afford.

The good news is that this 1% rule has been reduced to .5% on all FHA loans. 
With fewer dollars being estimated as future student loan payments, you now have access to more mortgage credit.

Refinance to Pay Off Student Loans

Mortgages often offer lower rates than student loans. Thus, swapping a student loan for a larger mortgage can often save considerable sums of money. 

Special refinance programs have been designed to directly pay off student loans at a lower cost than typical cash out refinancing. 

Student Loan Cash Out Refinance Program

  • At least one student loan must be paid off. (Proceeds must be paid directly to the student loans servicer at closing.) 

  • Only student loans for which the borrower is personally obligated can be paid through the transaction. 

  • Student loan debt must be paid in full with the proceeds. (Partial payments are not permitted.)