In this episode, we discussed how to refinance student loans into a mortgage without it being considered a cash-out refinance.
Unfortunately, there’s no such thing as bankruptcy for student loans. Unless you qualify for some government special program that will pay it down, you have to pay them off no matter how long it takes. And for most people, it takes a long time.
Now, if you have a home and you want to refinance your house, generally speaking, most people will consider it a cash-out refinance. So, basically, you can pull money out of your house and use it to pay off your student loans and have it priced as a non-cash-out refi.
The big restriction here is that you have to pay off an entire student loan in order for you not to get hit with a cash-out price hit. If you have four loans you can pay off two of those loans, three of those loans even, and have it not counted as a cash-out refinance if you pay 100% of those three loans. You just can’t pay off two and a half loans. All the money that is pulled out of the home has to pay off 100% of the loan(s) it’s pulled out to pay, whether it’s one student loan that you have or two of four that you plan on paying out. So, no partial payments.
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Be sure to ask us for a free quote on your next mortgage. We’ll personally work with you and help you through the whole process.
Signature Home Loans LLC does not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only. You should consult your own tax, legal, and accounting advisors before engaging in any transaction. Signature Home Loans NMLS 1007154, NMLS #210917 and 1618695. Equal housing lender.BACK TO LIST