Sofi announced a program with Fannie Mae to refinance homeowners with sufficient equity to cover some or all of their student loan debt. It’s estimated that such a program may benefit as many as 8.5 million households throughout the US. Now, that’s a lotta people.
With the current low mortgage rates, many homeowners now have the opportunity to reduce their total monthly debts by refinancing their higher rate student loans into their home mortgage. It’s like giving a raise to themselves. Plus, at least for now, the interest paid on the new combined refinanced mortgage and student loan balance is tax deductible.
This provides SoFi with a continued stream of refinance business as other traditional refi opportunities are projected to dry up over the next few months. Smart move by SoFi, especially with the Fed strongly hinting at a rate hike in December. BTW, that’s right after the elections (strange how that works).
Even with this hike, the mortgage rate will still be lower than most student loan rates. So, the SoFi Refi still works. Is that then a SoReFi?
Another company pushing refinances hard is NewDay USA, advertised as ‘America’s Lender for Veterans’. If you haven’t seen them NewDay is running TV ads highlighting the benefits of VA loans with the option for Vets to refinance up to 100% of their property’s value. I guess these Vets can also roll in some student debt if they presently have sufficient equity to do so. It’s a new day for the VA.
Both of these programs also offer options to parents who are carrying the student loan debts for their kids. It may be beneficial to refi, pay off the student loans, and get a higher tax deduction, while still reducing their overall monthly debt obligation. Alleluia!
What an industry. The chance to help people better their lives, reduce stress and debt, and provide for more monthly spendable cash to families, all while making some money to boot. What a Country!
Let’s keep it that way.