Do You Have Student Loans?

If you have student loans that have been on hold for the past three years, your payments are about to resume. Some have replaced the student loan payments they would of had the past few years with new debts, such as car loans, maybe a new home or higher credit card debts. There is no doubt that the “pause” being over may impact many American families.

If you have student loans that are set to restart, you’re also probably already being contacted by companies offering to help reduce or restructure the debt. Please be very careful and research any company thoroughly. With a federally backed student loan, you may have options available and once you refinance or restructure the debt into a private (non-federal) debt, you may lose those options.

In light of how many people are going to be faced with this, I have added a debt calculator to my blog where you can enter some basic information and see if you potentially qualify for other programs. There is no mortgage required for this! If you’ve been a long-time reader of The Mortgage Porter, you know that I care about the financial well-being of people beyond the financing of their home.

Speaking of mortgages, during the past three years when no mortgage payments were due with federally backed student loans, lenders would use a small percentage of the balance to factor in a payment for debt-to-income ratios (qualifying for a mortgage). Once the actual payments kick in, lenders will have to use that actual payment. If you are in the process of buying a home or considering buying a home, please contact your lender as soon as possible.

If you already own a home, you may be able to do a cash-out refi to pay off the student loan. Based on current guidelines, the cash-out refi would be treated as a rate-term (non-cash out) refinance.

As always, if I can be of any assistance to you or anyone you know, please reach out to me.