5 Signs You Should Refinance Your Mortgage To Pay Off Student Loans

Are you one of the more than 40 million Americans who are burdened with student loan debt? For homeowners who also have student loans, your home may be key to conquering those loans. How? Through refinancing your mortgage to pay off student loans. What are some indicators that this could be the right choice for you? Here are five of the most important.

1. Your Loan Rates Are High.

Some student loans come with a low-interest rate by law. However, private loans are often at much higher rates. And a borrower who's struggled to repay student loans may see fees, penalties, and higher interest rates already. A mortgage, on the other hand, often carries a low-interest rate. If your mortgage rate is lower than your loans, it's a good time to switch.

2. You Have Good Credit.

How is your credit score? To refinance a mortgage, you generally must have a decent credit score of at least 620. The higher your score, the lower interest rates and the more types of mortgages you can qualify for. This increases your options and your chances of big cost savings. 

3. You Haven't Tapped Equity Lately.

The equity in your primary home is an untapped asset. If properties have appreciated in recent years and you haven't done anything with the expanded equity, you could be sitting on a huge source of funding. Because refinancing does have some costs associated with the process, you don't want to do it every year. But if you've been waiting for a good reason, this may be it. 

4. You're Weighed Down by Loans. 

Student loans may allow you to pursue an education, but they can also be some of the most burdensome types of credit. You can't usually discharge them in bankruptcy, forbearance only racks up more debt, and even your Social Security checks can be garnished. If your loans are holding you back or may become a problem in the future, turn them into less risky debt. 

5. You Want to Simplify.

Many people who owe student loans have multiple loans and deal with multiple agencies to manage and pay them. This increases the risk of missing payments and more problems. If you opt to refinance a mortgage, you can roll all those loans and your mortgage into one monthly payment. Budgeting is easier and you can even automate the process. 

Do you find yourself in any of these situations? If so, now may be a good time to look into refinancing your mortgage to get rid of student loans. You'll benefit in the present and for many years to come. Contact real estate services to learn more about getting a mortgage refinance.