Fannie Mae Eases the Burden on Home Buyers & Owners with Student Debt
Kenneth R. Harney
Here's some good news for home buyers and owners burdened with costly student loan debts: Mortgage investor Fannie Mae has just made sweeping rule changes that should make it easier for you to purchase a first home or do a "cash-out" refinancing to pay off your student debt.
Fannie's new policies could be game changers for large numbers of consumers. Roughly 43 million Americans are carrying student debt -- $1.4 trillion nationwide -- according to industry estimates. These not only are a drag on borrowers' ability to save money, but are a key reason why so many young, would-be home buyers remain renters -- or are camped out in their parents' homes.
There are three big changes that Fannie has made that could affect you:
If you're one of the 5 million-plus borrowers who participate in federal reduced-payment plans on your student loan, your actual monthly payments, as reported to the credit bureaus, will count toward your debt-to-income (DTI) ratio calculations. If your payments were originally supposed to be $500 a month but you've had them reduced to $100 through an "income-based repayment" plan, only the $100 will be added to your monthly debts for DTI purposes.Read More
Join Us. We are waiting for you!Sign Up Today!
We welcome you to our community where you can gather and share information on debts and issues which may have your life unsettled. Together we thrive!