Bay Realty Blog: Have Student Loan Debt? A Solution May Exist For You

Have Student Loan Debt? A Solution May Exist For You

This is some very good information from Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi  regarding Student Loan debt relief if you are a home owner

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Parents (the Homeowner) who may have co-signed on a student loan for a son/daughter and is willing to take on the debt as "mortgage debt" rather than a Student Loan. (Currently, there is a tax benefit to doing so).



Have Student Loan Debt?

A Solution May Exist For You 



I'm sure you've seen these headlines or others like them ...


"Debt-Locked: Student Loans Force Millennials to Delay Life Milestones


"Yes, student debt is delaying homeownership"


It's a sad fact.  Student Loan Debt is a huge concern for many consumers in the present economy. And because of that, it's become a huge concern for the commercial and governmental sectors too.  Rightfully so.

In a previous article, "Student Loan Debt Guidelines Simplified by Fannie Mae", I spoke of Fannie Mae, (the GSE, Government Sponsored Enterprise that oversees and ensures mortgage liquidity and guidelines to many Banks, Lenders, and Mortgage Providers) and how their recent clarification of rules made regarding the calculation of Student Loan Debt addressed this very issue. 

Those new clarifications were favorable for home buyers with Student Loans.  In fact, the new changes may be instrumental in making home buying a reality for many that thought it impossible before.


The April 25, 2017, changes provided Mortgage Underwriters with the ability to accept the Student Loan Debt payment amount listed on an applicant's Credit Report.  
Or in those cases where the payment amount doesn't show on the applicant's  Credit Report, they can now use 1% of the outstanding debt or a manually calculated, fully amortizing payment.  That is welcomed change and in flexibility.

But there is also another valuable too often overlooked feature to be found within these recent Fannie Mae changes.  

That's the "Student Loan Cash-Out Refinance Option". 
Although a Cash-Out Refinance to pay off debts (of any kind) has long been available for homeowners holding equity in their home, Fannie Mae's 2017 springtime changes contain a new option for those with Student Loan Debt to consider.
In the case of this new option:

  • The Borrower must pay off at least one (1) Student Loan in its entirety
  • Proceeds of the Cash-Out Refi must be paid directly to the Student Loan Service Provider at Closing
  • Student Loan Debt must be paid-in-full with the proceeds of the Cash-Out Refinance  (Partial payments are not permitted)
  • The new option "forgives" or "eliminates" certain costs normally charged to the Borrower that is conducting the Cash-Out Refinance
  • The saved costs can result in either a Lower Interest Rate or additional "cash out" at Closing time.
As with many new loan programs, there will be a bit of a learning curve as to the "ins and outs" associated with it.  But for current homeowners with specific criteria, there can be some much-needed relief found by pursuing a Student Loan Cash-Out Refinance.

Those that can benefit from this Student Loan Cash-Out Refi are:
  • Current homeowners with (sufficient) equity
  • Homeowners of any Property or Occupancy Type
  • Homes cannot be For Sale at the time of disbursement
  • Personally obligated Student Loan Borrowers
  • Those looking to reduce/eliminate higher interest rate Student Loans 
  • Those looking to reduce/eliminate higher Student Loan payments
  • Parents (the Homeowner) who may have co-signed on a student loan for a son/daughter and is willing to take on the debt as "mortgage debt" rather than a Student Loan. (Currently, there is a tax benefit to doing so).  
The takeaway from the info above should be this:  Whether someone with Student Loan Debt dreaming of buying a home in IL or WI ... or a current homeowner hoping for some debt relief ... it's worth your time to talk with me (or your own LO) to get the facts regarding the existence of any financing options that could be of benefit to you.  You won't know what's possible until you do.

More changes are needed to address the serious Student Loan Debt issue.  These are not nearly enough and they've been too long in coming.  But it's a positive that we're finally beginning to see some small steps being taken to address Student Loan Debt and the stranglehold it places on those that possess it.

Contact me to learn if these changes impact your ability to lower your monthly Student Loan payments, their interest rate, to eliminate your Student Loan Debt, or if other options exist to help you buy or save money ...

* Looking to find what solutions and possibilities exist for you?  Hoping to Buy or Refinance a Home in New Lenox or elsewhere in the Chicagoland-IL-WI area?  Contact me!  I'll put my 40+ years of Mortgage experience and expertise hard to work on your behalf.
I'm easily found at:
Gene Mundt
Mortgage Originator - nmls #216987 - IL Lic. 031.0006220 - WI Licensed
American Portfolio Mortgage Corp.
nmls #175656
Direct: 815.524.2280
Cell/Text: 708.921.6331
eFax: 815.524.2281


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Gene Mundt

 Mortgage Originator  -  NMLS #216987    

                                   IL Lic. #0006220  -  WI License                                                                                                     

NMLS #175656


Gene Mundt, Mortgage Originator,  40+ years of #mortgage experience, will offer you exemplary mortgage service and advice when seeking:  #Conventional, #FHA, #VA, #Jumbo, #USDA, and Portfolio Loans in #Chicago and the greater Chicagoland region, including:  The #Lincoln-Way Area, #Will County, (#New Lenox, #Frankfort, #Mokena, #Manhattan, #Joliet, #Shorewood, #Crest Hill, #Plainfield, #Bolingbrook, #Romeoville, #Naperville, #Wilmington, #Peotone, etc.), #DuPage County, the City of Chicago, #Cook County, and elsewhere within IL and Wisconsin. 


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Comment balloon 5 commentsDebra Leisek • October 05 2017 07:47AM


Good morning Debra. If there is a solution loan available, Gene is the source! Enjoy your day!

Posted by Wayne Martin, Real Estate Broker - Retired (Wayne M Martin) over 3 years ago

Good morning, Debra Leisek great choice for a reblog....I'll leave a comment on the original post....

Posted by Barbara Todaro, Previously Affiliated with The Todaro Team (RE/MAX Executive Realty - Retired ) over 3 years ago

Interesting facts about student loans.  I have always felt this was a sleeping giant.

Posted by Peter Mohylsky. Beach Expert, THE BEACH IS OPEN (PrimeSouth Properties) over 3 years ago

With the rising costs of college, student loans will be something we struggle with for a loooooooong time.

Posted by Doug Rogers, Your Alexandria Louisiana Agent (Bayou Properties) over 3 years ago

Yes Wayne Martin  he is certainly a very good source! 

Thank you Barbara Todaro That is a very nice dress! You look marvelous!

You are right Peter Mohylsky and not a jolly giant at all!

Hello Doug Rogers it is amazing how far out of control this has gotten. thank you!

Posted by Debra Leisek ( Bay Realty,Inc Homer Alaska) over 3 years ago

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