Consolidating student loan into mortgage

15 Aug

Do you feel like your life is on hold because you’re trapped by all your debt payments? Consolidating your debt could be the answer you’re looking for.

It can help lower your monthly payments and get you out of debt faster so you can be in the driver’s seat of your own finances.

What the banks actually underwrite to is what the monthly payment is," explains Jay Dacey, a mortgage broker at Metropolitan Financial Mortgage Co. Whether student loans are included in debt-to-income ratio depends on the type of loan and whether the payments are current or have been deferred.

If the buyer applies for a conventional mortgage or VA loan, guaranteed by the U. Department of Veterans Affairs, any student loans will be included, even if the payments have been deferred, explains David Krichmar, a mortgage banker at Core Lending in Conroe, Texas.

In some situations, lenders will approve mortgages with debt-to-income ratios up to 43% or even higher. The house payment is an important part of debt-to-income ratio.

No matter what type of debt consolidation loan option you’re looking into, it is important to understand how to consolidate debt.

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Mortgage » Basics »Hero Images/Getty Images It's no secret that student loans can make buying a home a challenge.

For such installment loans, the important factors are how much total debt you owe and, of course, most importantly if you have missed any payments. It can be helpful if you have education debt from multiple lenders or student loan guaranty companies.

To consolidate student loan debt, you get a single loan that is then used to pay in full your outstanding debt from the various lenders who provided you with student loans.