Recently I had the opportunity to Broker the refinance of an Owner Occupied home, however Student Debt (Sallie Mae/Navient) killed the Loan!
1. It seems that Massachusetts and New Hampshire host the Owners of the some of the highest Average student Debt.
Maybe they’re some of the smartest folks that could use that education? Maybe they feel they could gain “forgiveness” of the debt by working in public service?
Maybe they feel their career paths would accommodate a quick repayment after graduation? You tell me!
2. As you probably know within the “4 Corners of the Box” that constitute the qualifications of a Mortgage, “Debt to Income” back ratios rule!
3. The “generous” interest rates that the Federal Loan guaranteed programs for 10 year repayment can equate to a significant monthly expense.
Combined high monthly repayment and a restrictive “Back-end ratio” most folks (and their co-signers) are locked (trapped?) into a lengthy freeze of their financial options!
According to Nate Howard,
an Existing Federally backed loan gives the Borrower (and COSIGNER) these Options:
Term extension plans.
Income based repayment options.
Loan forgiveness plans.
Loan consolidation options.
While private Refinancing doesn’t offer all those Federal Options and Plans it usually DOES provide you with a lower interest or payment! And maybe an opportunity to remove a Co-Signer from the note….
As a Loan Officer I’m glad to help check your Credit for errors or opportunities to increase your score, then in turn we’ll look into refinancing and lowering your monthly obligations! While I do not refinance Student Loans or advise amortizing short term debt into long term, there may be a several options that do make sense.
By the Bye – One of the quick-check guidelines Nate mentions to see if refinancing is practical: Does your yearly Income exceed your Student Loan?
For Questions or to run your Scenario, Mike Hurney NMLS#43341 Cell 781-405-1845