Do you want to know more about mortgage refinancing options for recent college graduates? Are you a graduate? Then keep reading.
With college graduation season in full swing, there are a lot of misconceptions we need to address.
There is a belief that college grads don’t have hope of purchasing a home any time soon, so they’ll do what most of their peers do and throw their money away.
Moreover, it doesn’t have to be the case, and it often isn’t. The truth is that many recent graduates are in very viable positions to buy, but they aren’t aware of the programs and strategies that would make it possible for them.
READ MORE: Lenders That Will Refinance Student Loans for Borrowers With No Degree
Mortgage For College Graduates with No Employment History
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All mortgage loan programs require two years of work history and two years of residential history. As most college graduates do not have a work history.
However, a student’s college transcripts can be used instead of two years of work experience history.
The college graduate needs to give the mortgage lender or their college transcripts. For you to be eligible for the mortgage, you will need to have a full-time job and provide a full-time job employment offer letter.
Since the college graduate did not have two rats of employment history, the past two years of tax returns and/or W-2s cannot be used and the income that will be used to qualify for an income will be your current job offer letter income.
Mortgage for recent college graduates will need to be full-time employment and part-time employment does not count. If the college graduate has part-time employment after graduation that part-time income and employment will be seasoned for two years.
However, in full-time employment, you can enter into a real estate purchase contract and close in your home after providing 30 days of paycheck stubs from your new employer.
Mortgage Refinancing Options For College Graduates with Deferred Student Loans
There are changes in mortgage guidelines on student loans with FHA loans have been implemented. Where deferred student loans that have been deferred for more than 12 months now count in debt-to-income calculations.
Before the year 2015, on 14th September, student loans have been deferred for more than 12 months were exempt from calculating the mortgage loan borrowers’ debt-to-income ratios.
It is no longer the case and this new law on deferred student loans will affect most student college graduates who have high students on balances.
This holds, especially for those graduate degrees and professional degrees such as medical degrees and law degrees where student loan debt can be more than $200,000.
Moreover, if you have a parent that makes the student loan payments and they have been making the student loan payments directly to the student loan provider for the previous 12 months. Then the student loan payments can be deducted loan payments that will be deducted by the borrower.
This holds as long as the parent can give 12 months of canceled checks and/or bank statements showing funds being wired directly to the student loan provider.
Maybe the parent is depositing the student loan payment amount to the borrower’s checking account and the borrower is making that same amount to the student loan provider, this can work.
As this depends on the lender and the individual mortgage underwriter. This will be decided by the underwriter.
READ MORE: 8 Lenders for Refinancing Student Loans for Borrowers With No Degree
Barriers To Not Qualifying for Mortgage Refinancing Options
After 2015, all student loan payments will be counted towards the calculation of borrowers. It is even if the student loan is in deferment.
Maybe the student loan payment is zero because the student loan is in deferment, the mortgage lender needs to establish payment for the amount of monthly student loan debt.
Moreover, if the borrower does not know what his/her student mortgage loan payment will be after it is out of deferment.
Then the mortgage loan payment will be after it is out of deferment, for the mortgage loan underwriter will take 0.50% of the student mortgage loan monthly debt payment in calculating their monthly student loan payments.
Mortgage Refinancing Options for Recent College Graduates
Are you ready to start the refinancing process? Then pick out of the following lenders that give the best deals of graduate student loan refinancing on the market:
1. Earnest
Borrowers who make use of Juno to refinance with Earnest will receive an interest rate of 25% which is low than what Earnest offers the general public.
The fixed interest rate starts at 2.25% APR and the variable interest rate starts at 1.64% APR. The Juno discount is already factored into both of these rates.
2. Splash
Splash is one of the best lending marketplaces that connect borrowers with their lenders like banks and credit unions. You will be able to compare the various options quickly.
3. Laurel Road
Juno partners with Laurel Road and gives graduate school refinancing to health professionals, which include doctors, nurses, dentists, optometrists and physician assistants.
Borrowers will still be in residency or fellowship and will only have to make $100 payments -a huge benefit for the career stage where the salary is low.
What You Need to Refinance Graduate Student Loans
Maybe you’re interested in refinancing graduate student loans, you’ll have to provide the following information:
- Full legal name
- Birthdate
- Social Security Number
- Address
- Citizenship Status
- Current income
- Rent or mortgage payment
- Graduation date
- Graduate school name
- Total debt balance
- Type of graduate degree.
READ MORE: Mortgage Interest Rate Trends For Student Borrowers
Conclusion
Maybe you have good credit and a steady income source, but buying a home as a recent graduate might be a good decision for your goals. When you purchase the home, you will gain future equity that can help you pay down your student debt or provide the assets to help move into your next home as your needs change.
