You want to refinance your home, and you wonder whether this might be the right time to combine other debts into your new mortgage – including one large debt most of us hold: Student loans.
The idea is attractive. Mortgage interest rates are generally lower than those on a student loan, and you’d have one less monthly payment. But Credit.com points out that there are some other things you should consider before you roll your student loan into your mortgage.
Will you really see savings? It’s not just a lower interest rate that you need to consider. There are other costs associated with a refinance, including closing costs.
Will you miss out on loan forgiveness options? When you roll your student loan into another debt, it is paid off in the eyes of the original lender. You will no longer be able to take advantage of student loan forgiveness programs – the programs that exist now or new programs that could be put into place.
What should you do? This is a complicated decision, and the answer won’t be the same for everyone. Consult your financial advisor to help you make the best decision for you.
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