Fannie Mae recently announced a student loan refinance program, which allows homeowners to use their homes’ equity to pay off student loan debt. This is a special program, and even though you’re tapping into your home equity, you are not getting charged a “cash-out refinance” rate.

Here are some details and requirements:

  • Conforming and high-balance loan amounts
  • Fixed and Adjustable loan programs allowed
  • Loan proceeds must be paid directly to the student loan servicer at closing and through escrow
  • Only student loans for which the borrower is personally obligated can be paid through the transaction
  • Student loan debt must be paid in full; no partial paydown is allowed

This can be a great opportunity to take advantage of current low mortgage interest rates (typically lower than student loans), and if you opt for a 10, 15 or 20 Year Fixed rate mortgage, the payoff time would be similar. Contact me for additional questions and details!