A recent report shows that our current Real Estate Slump Is Having An Impact On Student Loans. The reason for this is that students are having to depend more on student loans to pay for their education. This is a result of not only higher educational cost, but also because parents are not able to take out home equity loans on their homes to help pay for their childrens education.
Government data showed that student loans have increased by almost 48% since 2008. As housing values began to decrease, so did the availability of funds from parents to assist their children. This shift in debt will most likely have a future impact on the ability of our younger generation to be able to qualify to purchase a home of their own.
This shift in the responsibility in debt is also being seen in the number of delinquent student loans which will further impact the ability of younger borrowers to purchase a home. Even though students loans are normally in payment deferment until 6 months after students graduate, the inability to find jobs is making it very tough to make payment on these loans when they go into repayment. A payment deferment can be given for unemployment, but that does not keep the interest on student loans from accumulating, which cause the loan amount to go up, which result in higher monthly payments once repayment starts.
Another problem that delinquencies on student loans create, is that student loan delinquencies are only second to mortgage delinquencies when trying to qualify for a mortgage, especially a Government Mortgages. Lenders will require a Borrower trying to do a FHA, VA, or USDA Mortgage to not have late payments on student loans for at least a minimum of 12 months. In some cases (depending on the number of student loan delinquencies) the Lender may require 24 months of no student loan delinquencies. It is easy to see that as this problem increase so will its impact on the number of homes sold to First Time Homebuyers.
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Who To Call For Your Mortgage Needs In Connecticut:
George Souto NMLS# 65149 is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 gsouto@mccuemortgage.com, or visit my McCue Mortgage Homepage.
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