The new Fannie Mae guidelines also recognize the realities of men and women who would like to buy homes but are paying off student loans.According to Fannie Mae the changes: College graduates own homes at a higher rate than others, regardless of how much loan debt they have according to a report issued this month from the Federal Reserve Bank of New York.The second you refinance into a mortgage, you just made that a secured debt.
Add the current mortgage’s balance, the student loan's balance and reasonable closing costs.Divide this balance by your home’s estimated value.It’s also attractive to get rid of that monthly student loan payment. “One thing we stress big time: It worries me, taking unsecured debt and making it secured,” said Desmond Henry, a personal financial adviser based in Kansas.“If you lose your job, with a student loan, there is nothing they can take away."If you are concerned about your financial future, you want to be really careful about putting your home at risk." There are roughly 8.5 million homeowners with student loans, Fannie Mae said.
Interest rates on private student loans can be as high as 8 percent, compared with under 4 percent on a 30-year fixed-rate mortgage.
CLEVELAND, Ohio - Homeowners can now refinance their mortgages to pay off student loan debt, according to new guidelines issued by Fannie Mae, the largest backer of mortgage credit in the country.
And new policies will help more borrowers with student debt qualify for a home loan.
A cash-out refinance is necessary to consolidate the school loans with the current first mortgage.
A second mortgage can also be used to consolidate the loans if refinancing the first mortgage would cause its interest rate to increase.
It’s awfully tempting to trade a 6.8% interest rate on your federal student loan for a 4.75% interest rate on a mortgage.