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The Pros and Cons of Mortgage Refinance to Pay Down Student Loans
It's Ron Siegel here. You might be considering refinancing your mortgage to pay off your student loans. While it can sound like a smart move, it's essential to understand the pros and cons of this decision.
If you choose to refinance and cash out to pay down your student loans, remember that the money must go directly to the loan servicer when closing. Also, the loans must be under your name.
Consider the repayment period. Most student loans are set up to be paid off over 10 or 20 years. But if you include this debt in your mortgage, you could be looking at a 30-year repayment period. That's a significant extension.
Also, remember that federal student loans come with some valuable protections. You could qualify for $0 payments or payment forbearances if you run into financial difficulties. There's even the possibility of loan forgiveness or discharge if you become disabled. If you refinance your mortgage to pay off these loans, you'll lose all these benefits.
Before making a decision, weigh the pros and cons carefully. For more details, check out the video above. It's essential to make the best choice for your situation.
If you choose to refinance and cash out to pay down your student loans, remember that the money must go directly to the loan servicer when closing. Also, the loans must be under your name.
Consider the repayment period. Most student loans are set up to be paid off over 10 or 20 years. But if you include this debt in your mortgage, you could be looking at a 30-year repayment period. That's a significant extension.
Also, remember that federal student loans come with some valuable protections. You could qualify for $0 payments or payment forbearances if you run into financial difficulties. There's even the possibility of loan forgiveness or discharge if you become disabled. If you refinance your mortgage to pay off these loans, you'll lose all these benefits.
Before making a decision, weigh the pros and cons carefully. For more details, check out the video above. It's essential to make the best choice for your situation.