Wednesday June 28, 2017
Are you in the market for a new home or townhome in Dallas but concerned that your student loan debt will make it difficult to balance all of your expenses? New policies announced this year by Fannie Mae can help borrowers refinance their debt and potentially qualify for a lower mortgage rate. Fannie Mae says the solutions provide three flexible payment solutions to future and current homeowners and, in turn, allow lenders to serve more borrowers.
Debt Paid by Others
Under this policy, if a third party, such as an employer or parent, is helping pay off a borrower’s student loan, mortgage lenders can now use that information when calculating the borrower’s debt-to-income ratio to qualify for a home loan. The borrower will just have to submit documentation that a third party has made these payments for the past year.
Student Loan Cash-Out Refinance
This policy will help borrowers who currently own a home convert their student debt into housing debt at a lower interest rate. The Wall Street Journal reports borrowers can refinance their mortgage through lenders backed by Fannie Mae to pull some equity out of their home to pay off their student loans. Fannie Mae says the rate on the refinancing is likely lower than what is usually available.
Student Debt Payment Calculation
This third policy 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, which can help improve your credit and give you the opportunity to qualify for a mortgage loan.
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