Student Loan Debt – Stress Free Mortgage

Student loans have been a hot topic lately due to the forbearance and student loan forgiveness that started during Covid. What many do not know is that you may be able to refinance your home in order to pay off your student loans!
If you own your own home, you have the option of doing a cash out refinance to help pay off this debt. Additionally, if you are using the cash from your refinance to exclusively pay off student loans, the refinance is eligible as a rate and term loan. Which means you can get a better rate!
It is worth noting that if you are in the process of purchasing a home or refinancing, and your student loan is in forbearance or deferred, lenders still need to account for a monthly student loan payment for you to apply. If you don’t have a payment plan setup for your student loans, then we, as the lender, will use either 1% of the amount due or 0.50% of the amount owed on your student loans for an estimated monthly payment amount. This is so that your student loans can be shown in your monthly debts when applying for a loan.
Often, there are black and white views surrounding paying off debt through a refinance. Many assume that if they have a low interest rate on their first mortgage, they don’t have this option. However, it’s not that simple, and paying off these debts and potentially other credit card debt, will benefit you big time in the long run. Call Stress Free Mortgage at 661-295-0555 today to learn about how you can pay off your student loans!