Have Student Loan Debt? A Solution May Exist For You

Mortgage and Lending with NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 IL Lic 031.0006220/WI



Have Student Loan Debt?

A Solution May Exist For You 



I'm sure you've seen these headlines or others like them ...


"Debt-Locked: Student Loans Force Millennials to Delay Life Milestones


"Yes, student debt is delaying homeownership"


It's a sad fact.  Student Loan Debt is a huge concern for many consumers in the present economy. And because of that, it's become a huge concern for the commercial and governmental sectors too.  Rightfully so.

In a previous article, "Student Loan Debt Guidelines Simplified by Fannie Mae", I spoke of Fannie Mae, (the GSE, Government Sponsored Enterprise that oversees and ensures mortgage liquidity and guidelines to many Banks, Lenders, and Mortgage Providers) and how their recent clarification of rules made regarding the calculation of Student Loan Debt addressed this very issue. 

Those new clarifications were favorable for home buyers with Student Loans.  In fact, the new changes may be instrumental in making home buying a reality for many that thought it impossible before.


The April 25, 2017, changes provided Mortgage Underwriters with the ability to accept the Student Loan Debt payment amount listed on an applicant's Credit Report.  
Or in those cases where the payment amount doesn't show on the applicant's  Credit Report, they can now use 1% of the outstanding debt or a manually calculated, fully amortizing payment.  That is welcomed change and in flexibility.

But there is also another valuable too often overlooked feature to be found within these recent Fannie Mae changes.  

That's the "Student Loan Cash-Out Refinance Option". 
Although a Cash-Out Refinance to pay off debts (of any kind) has long been available for homeowners holding equity in their home, Fannie Mae's 2017 springtime changes contain a new option for those with Student Loan Debt to consider.
In the case of this new option:

  • The Borrower must pay off at least one (1) Student Loan in its entirety
  • Proceeds of the Cash-Out Refi must be paid directly to the Student Loan Service Provider at Closing
  • Student Loan Debt must be paid-in-full with the proceeds of the Cash-Out Refinance  (Partial payments are not permitted)
  • The new option "forgives" or "eliminates" certain costs normally charged to the Borrower that is conducting the Cash-Out Refinance
  • The saved costs can result in either a Lower Interest Rate or additional "cash out" at Closing time.
As with many new loan programs, there will be a bit of a learning curve as to the "ins and outs" associated with it.  But for current homeowners with specific criteria, there can be some much-needed relief found by pursuing a Student Loan Cash-Out Refinance.

Those that can benefit from this Student Loan Cash-Out Refi are:
  • Current homeowners with (sufficient) equity
  • Homeowners of any Property or Occupancy Type
  • Homes cannot be For Sale at the time of disbursement
  • Personally obligated Student Loan Borrowers
  • Those looking to reduce/eliminate higher interest rate Student Loans 
  • Those looking to reduce/eliminate higher Student Loan payments
  • Parents (the Homeowner) who may have co-signed on a student loan for a son/daughter and is willing to take on the debt as "mortgage debt" rather than a Student Loan. (Currently, there is a tax benefit to doing so).  
The takeaway from the info above should be this:  Whether someone with Student Loan Debt dreaming of buying a home in IL or WI ... or a current homeowner hoping for some debt relief ... it's worth your time to talk with me (or your own LO) to get the facts regarding the existence of any financing options that could be of benefit to you.  You won't know what's possible until you do.

More changes are needed to address the serious Student Loan Debt issue.  These are not nearly enough and they've been too long in coming.  But it's a positive that we're finally beginning to see some small steps being taken to address Student Loan Debt and the stranglehold it places on those that possess it.

Contact me to learn if these changes impact your ability to lower your monthly Student Loan payments, their interest rate, to eliminate your Student Loan Debt, or if other options exist to help you buy or save money ...

* Looking to find what solutions and possibilities exist for you?  Hoping to Buy or Refinance a Home in New Lenox or elsewhere in the Chicagoland-IL-WI area?  Contact me!  I'll put my 40+ years of Mortgage experience and expertise hard to work on your behalf.
I'm easily found at:
Gene Mundt
Mortgage Originator - nmls #216987 - IL Lic. 031.0006220 - WI Licensed
American Portfolio Mortgage Corp.
nmls #175656
Direct: 815.524.2280
Cell/Text: 708.921.6331
eFax: 815.524.2281
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Gene Mundt

 Mortgage Originator  -  NMLS #216987    

                                 IL Lic. #031.0006220  -  WI License #216987                                                                                                    

NMLS #175656


Gene Mundt, Mortgage Originator,  40+ years of #mortgage experience, will offer you exemplary mortgage service and advice when seeking:  #Conventional, #FHA, #VA, #Jumbo, #USDA, and Portfolio Loans in #Chicago and the greater Chicagoland region, including:  The #Lincoln-Way Area, #Will County, (#New Lenox, #Frankfort, #Mokena, #Manhattan, #Joliet, #Shorewood, #Crest Hill, #Plainfield, #Bolingbrook, #Romeoville, #Naperville, #Wilmington, #Peotone, etc.), #DuPage County, the City of Chicago, #Cook County, and elsewhere within IL and Wisconsin. 


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Re-Blogged 3 times:

Re-Blogged By Re-Blogged At
  1. Danielle O'Brien 10/04/2017 01:31 PM
  2. Debra Leisek 10/05/2017 12:47 AM
  3. Gabe Sanders 10/14/2017 11:47 PM
Lending / Financial
Illinois Will County New Lenox
Chicago Area Real Estate BUZZ!
1st Time Buyers
Buyer Information - What Buyers Need to Know in Today's Market
buying a home
firsttime home buyers
student loan debt
mortgage underwriting rules regulations
buying a home when you have student loans
recent fannie mae changes
student loan debt solutions
home buying millennials

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Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Gene I am all about identifying a problem and then coming up with a solution, excellent suggestion and post, Endre

Oct 04, 2017 11:15 PM #15
Debra Leisek
Bay Realty,Inc Homer Alaska - Homer, AK

This is such good information and will be helpful to many I was really surprised to see this

Parents (the Homeowner) who may have co-signed on a student loan for a son/daughter and is willing to take on the debt as "mortgage debt" rather than a Student Loan. (Currently, there is a tax benefit to doing so).

This can be a boon to a lot of people who have co-signed!!


Oct 05, 2017 12:44 AM #16
Barbara Todaro
RE/MAX Executive Realty - Franklin, MA
"Franklin MA Homes"

Good morning, Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi I've heard some figures for student loan debt, and all I can do is shake my head and be thankful my children are now adults.... so far, their children have scholarship money.... one has no student loan debt and has a full boat available to him with a 3.0 minimal GPA....

college tuition MUST come down.... I was in college in the 1960's and tuition at the University of Bridgeport in Ct was $2,000/ year.... 

Oct 05, 2017 03:25 AM #17
Sally K. & David L. Hanson
Keller Williams 414-525-0563 - Brookfield, WI
WI Realtors - Luxury - Divorce

Soooo important for agents to research the options for getting mortgages.....!

Oct 05, 2017 04:18 AM #18
John Wiley
Right Move Real Estate Group- EXP Realty - Fort Myers, FL
Lee County, FL Real Estate GRI, SRES,GREEN,PSA

Student loan debt is a big issue. Thanks for sharing the recent changes that can assist people in getting a loan for home purchase.

There are OPTIONS!

Oct 05, 2017 04:25 AM #19
Jason Anderson
Platinum Realty - Jenks, OK
Realtor®, Organizational Expert

Interesting information. I have not kept up as much as I usually do with mortgage/finance info this year. I will look further into this as it can be very helpful for many individuals.

Oct 05, 2017 05:05 AM #20
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Thanks for the valuable and useful information, Gene.  I'm saving this post.

Oct 05, 2017 05:36 AM #21
Sharon Tara
Sharon Tara Transformations - Portsmouth, NH
New Hampshire Home Stager

I'm so glad I never had a school loan....it can be a real problem for a lot of people. This is very informative and I'm sure very helpful to many Gene!

Oct 05, 2017 06:30 AM #22
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

Student debt is a trillion dollar problem. Any help on this subject is welcomed. One builder I know of is offering $15k toward student debt reduction if you buy their product. We need solutions here and now to mitigate the ripple affect down the line from this debt load acquired at an early age that burdens for life?

Oct 05, 2017 06:41 AM #23
Corinne Guest
Barrington Realty Company - Barrington, IL
The Choice of Professionals for Luxury Home Buying

Great information. My son sees me as his answer, LOL. Likely next year I will pay it off, I want him to be loose not tight on funds when he buys a home.

Oct 05, 2017 07:53 AM #24
Andrea.B Ferreira 954-303-8289 CRS
Keyes Co. - Davie, FL
Miami Dade, Broward and Palm Beach County in FL

My husband and I decided to help our boys when they finished the college, Not fair for parents spend US$50K and before graduation get the feedback as of " it is not what I like to do.. I would like to pursue a new carrier." So my older is paying his own and the younger is rushing for scholarship.. at the end if they have no student loan we will give them cash to buy a house or whatever they decide... so far is working fine but good to know there are more options out there. Thank you for sharing and have a good day

Oct 05, 2017 09:19 AM #25
Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of Manchester NH's Leading Agents

Those are some fantastic updates and changes Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi , it is sure to help those loaded with student loan debt who are ready to buy their first home

Oct 05, 2017 10:33 AM #26
Margaret Goss
Baird & Warner Real Estate - Winnetka, IL
Chicago's North Shore & Winnetka Real Estate

So glad to hear this - there is so much news about young people being squeezed out of the market because of this. The real problem, to me, is the cost of a college education.

Oct 05, 2017 01:36 PM #27
Gary 'Banana' Houghtaling
Phoenix Property Shoppe - Phoenix, AZ
Phoenix Real Estate Agent

Gene - Anna mentioned this to me last night.  A guy at my office was just talking about all the school debt he has so next time I see him I'm going to mention it.

Oct 05, 2017 04:24 PM #28
Dorie Dillard
Coldwell Banker United Realtors® ~ 512.346.1799 - Austin, TX
Serving Buyers & Sellers in NW Austin Real Estate

Good evening Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi ,

So glad to see this post featured! Great information for those so burden with student debt.

Oct 05, 2017 04:35 PM #29
Paul McFadden
Paratex - Seattle, WA
Pest Control, Seattle, WA.

Nice to see your featured article here. Great info. too. Hope you're well!

Oct 05, 2017 07:49 PM #30
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

It’s nice to know that this post is getting so much traction and I was everybody all the best in the student loan situation they might have.

Oct 05, 2017 11:45 PM #31
Mike Bjork
American Pacific Mortgage - Redondo Beach, CA

Great info, Gene!  A lot of young people can benefit from this.

Oct 06, 2017 01:01 PM #32
Corey Martin
Martin Presence Group - Ruston, LA
Real Estate and Management Solutions

Student loans are becoming a huge problem. But these tips could help! Thanks for sharing!

Oct 07, 2017 06:08 PM #34
Karen Cooper
Karen Cooper | Sr Retail Loan Originator ! NMLS # 223305 | 360 Mortgage Group LLC Austin Texas - Leander, TX
Helping Homeowners w/Home Loans in 23 US States

Great info you are getting out there, Gene, and congratulations on the feature!

Oct 12, 2017 04:42 AM #35
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708.921.6331 - 40+ yrs experience
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