Coldwell Banker Premier Realty

Student Loan Debt as a Challenge to Homeownership


New Fannie Mae Solutions
Posted: April 25, 2017 at 12:00 AM by John McClelland

Housingwire.com reports that Fannie Mae has come up with several solutions to help with student loan debt, which has been problematic for a large swath of potential mortgage borrowers. Forbes has published statistics that find that total student loan debt in the U.S. is $1.31 trillion with 44.2 million borrowers. In Nevada, the average student loan debt is $23,462. Even with these basic figures, we can start to get a view of the scope of the challenge.

In an attempt to tackle this issue, Fannie Mae's three main components are as follows (Directly Quoting Housingwire.com):


Student loan cash-out refinance: Offers homeowners the flexibility to pay off high interest rate student debt while potentially refinancing to a lower mortgage interest rate.

Debt paid by others: Widens borrower eligibility to qualify for a home loan by excluding from the borrower’s debt-to-income ratio non-mortgage debt, such as credit cards, auto loans, and student loans, paid by someone else.

Student debt payment calculation: Makes it more likely for borrowers with student debt to qualify for a loan by allowing lenders to accept student loan payment information on credit reports.

Please see the full article from housingwire.com, which gives some important explanations for each of these three main items. 



References:

Forbes.com
https://www.forbes.com/sites/zackfriedman/2017/02/21/student-loan-debt-statistics-2017/#4fb2af115dab

housingwire.com
http://www.housingwire.com/articles/39948-fannie-mae-announces-new-programs-to-break-through-student-loan-roadblock

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