Here’s how Maryland residents can buy a home and erase student loan debt at the same time.
We’re often asked about whether student loans affect your home-buying ability, so today, I’d like to talk about an amazing program that can roll these loans into a home mortgage. I’m joined by Ryan Paquin of First Home Mortgage, who will help explain how this program works.
In Maryland, the state will pay off up to $30,000 in student loans through the Maryland Mortgage Program. It’s called the SmartBuy 3.0 Program, and it works for buyers who put 5% down with a conventional loan and have a 720 credit score or higher. It forgives 20% of your student loan each year, so after five years, you’ll no longer have these loans. They’ll also give you $5,000 for down payment and closing cost assistance.
Even if you don’t qualify for the program, there have still been some major changes in how student loan debt is looked at. Large student loans do prevent some people from qualifying, but FHA recently said they can work with people to help them qualify. For example, a person with a $50,000 student loan would have a $500 debt each month, and lenders had to look at 1% to qualify someone. Now, they can look at 0.5% instead, which would bring that debt to $250 each month and help people qualify.
These changes will be incredibly helpful for homebuyers who are saddled down with student loans. If you have any questions about this or would like more information, feel free to reach out to me. I look forward to hearing from you soon.