A recent joint study brought by the National Association of Realtors, together with the American Student Assistance, shows that Millennials are delaying homeownership for an average of seven years. The main reason? The pressing need to pay off student loans first.
Addressing the financial burden from student loans
Specifically, the study shows about 83% of non-homeowners believe that their student loan debt is delaying their dreams of buying a house for themselves.
Also, about three-quarters of the respondents said that their student loans make them feel financially insecure which becomes a factor why a lot are putting off home buying.
Together with that, about 85 percent of the respondents said that their student loans are directly affecting their ability to save for a down payment. And more than half of those respondents could not even qualify for a home loan because of their debt-to-income ratio.
In a press release, Jimmy Timmons addressed the gravity of student loan debt burdens and the millennial Americans’ struggle to prepare and buy a home of their own because of it.
“Americans are more burdened than ever by student loans, with $1.3 trillion in outstanding student loans spread out among 42 million borrowers.”
He added, “Particularly with millennial buyers, people who want to buy a home of their own are not feeling as though they can move forward. Our program is designed to relieve some of that burden and remove that barrier to owning a home.”
As an answer to address the country’s $1.4 trillion student debt load today, there is a new mortgage program brought by Lennar Homes and Eagle Mortgage. That is the Eagle Home Mortgage’s Student Loan Debt Mortgage Program.
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What is the new mortgage program all about?
The Eagle Home Mortgage’s Student Loan Debt Mortgage Program allows borrowers up to $13,000 that can be used to pay off student loans.
For those who purchase newly-built homes from Lennar Homes, the mortgage would get up to 3 percent of the home’s purchase price for paying off the student loan debt.
When qualifying for this mortgage, borrowers can choose mortgages with down payments as low as 3 percent and its loan maximum amount it $424,100.
Other than these offers, borrowers could see if they are eligible for incentives like getting credits for closing costs.
But interested borrowers would have to check this program out as soon as possible since the program is still in its trial period for now with new Lennar homes all over the country.
As far as mortgages go, this is not the first time an organization or a lending authority took an initiative to help young adults to become homeowners while helping them pay off student loans.
Not long ago, Fannie Mae began to roll out cash-out refinance programs that allowed their borrowers to pay off student loans while refinancing to a mortgage with a lower interest rate.
The program was an expansion from the one they rolled out with SoFi back in November 2016.
Now, millennials have more opportunities to find a home for themselves while they’re paying off their student debts.
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