May 11, 2017
For those that weren’t fortunate enough to earn a “full
ride” academic scholarship to college or had college paid for as an athlete,
chances are student loans were taken out. Especially so for those who go on for
an advanced degree. And while taking out the student loan took care of much of
the bill and there were no immediately monthly payments made, at some point
they become due. And the longer term student loans can stay there for a very
long time until the loan is paid off.
However, for those who are considering refinancing their
current mortgage to get a better rate, change loan terms or switch from a
variable to a fixed rate while also having student loans outstanding, take a
look at pulling out some equity and getting rid of those student loans. For instance,
say you have an adjustable rate mortgage and are finally convinced rates won’t
go lower any time soon. You call your lender and talk about refinancing. Your
credit report also shows a few student loans outstanding. Your loan officer
asks if you’d ever thought of paying those off during the refinance process.
You run the numbers with the loan officer and do decide that indeed it is time
to pay off those loans. You’re going to refinance anyway, why not take the
Your loan officer will take care of the necessary paperwork
needed to pay off these loans by requesting a payoff amount from the lender you
send your student loan payments to. There really isn’t anything else you need
to do in this regard except document your loan file at the direction of your
loan officer, lock in a rate and close on your loan.
If your student loans only have a year or so left before
being paid off completely you probably don’t want to pay them off with proceeds
of a refinance, effectively extending the term of the student loan. But if the
student loans do have several years left on them and you would like to
eliminate those additional monthly payments, it’s something you should speak to
your loan officer about.
For more information or questions about mortgage loans, please call (855) 757-8748.