Row of townhouses in Alexandria, Virginia Grace Cary | Moment | Getty ImagesA new, more affordable repayment plan for federal student loan borrowers may come with another advantage: It could make it easier to become a homeowner.
Half of student loan borrowers — including 60% of millennial borrowers — who haven't yet purchased a home say their education debt is delaying them from doing so, according to a 2021 report by the National Association of Realtors.
Previously, someone who made $40,000 a year would have a monthly student loan payment of around $151.
watch nowIn the past, most mortgage lenders assumed that a borrower's monthly student loan payment was a certain percentage of their loan balance, even if the actual payment was lower, Kantrowitz said.
There's one catch: Many mortgage lenders won't use a $0 monthly student loan payment in their underwriting process, which the SAVE plan could leave many borrowers with.
Persons:
Alexandria , Virginia Grace Cary, Biden, Mark Kantrowitz, Christelle Bamona, Barmona, Kantrowitz, Bamona
Organizations:
Valuable Education, National Association of Realtors, Here's, Center for, SAVE, Finance, Lending
Locations:
Alexandria , Virginia