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.