Is Home Ownership Affordable For Student Loan Holders? 

24.02.24 05:47 PM Comment(s)

The benefits of homeownership in the US cannot be overstated. From reducing housing costs, improving credit scores to the accumulation of wealth, homeownership is at the heart of the American dream. Millennials though are struggling to live their homeownership dream due to student loans. A recent report released by the National Association of Realtors states that 51% of all student loan holders say their debt delayed them from purchasing a home.

Student loans represent substantial hurdles to homeownership. These include:

  • Overbearing burden of an existing student loan creates a mental block for taking on even more debt.
  • Monthly student loan payments leave little room to save up for a down payment on a home.
  • The presence of student loans contribute to potentially lowering credit scores and missing student loan payments further damaging the credit scores.
  • Student loans can increase the debt-to-income ratio, making home mortgage approval more difficult.

Though it is possible to refinance a student loan to lower the interest rate and monthly payments, there could be a better option that actually eliminates student loans and the associated challenges to homeownership.

Defynance has developed a solution to replace a student loan with an income share agreement or ISA. An ISA offers all the benefits of an income-based repayment plan without the shackles of student debt.

Benefits of the Defynance ISA:

  • The Defynance ISA is designed to keep the payments pegged to income which makes them affordable.
  • Recognizing that credit scores are not an accurate reflection of our potential customers ability to make payments, Defynance does not make underwriting decisions based on credit scores.
  • Payments are pauseed if income falls below a minimum amount. Contrary to loans, ISAs are interest free.There isn’t an outstanding balance with an ISA so you’re always protected on the downside.
  • Refinancing with a Defynance ISA should improve your credit and help lower your debt-to-income ratio making it less likely that you will need a co-signer for your mortgage.
  • The Defynance ISA does not have a balance to be repaid nor is there any interest. Your mental stress will be greatly reduced knowing that you are protected during financial hardship and always have an affordable payment.

Why Defynance Stands Out

In summary, Defynance recognizes the challenges that having student loans presents to buying a house. The design of the ISA generally eliminates these challenges by making payments affordable, improving credit, and eliminating the need for a co-signer, if necessary.

If you are looking to buy a house, you should first consider if paying off student loans is possible. If not, replacing your student loan with a Defynance ISA may be a better option than simply refinancing with another student loan. Reduce your mental stress and become financially empowered with us. Visit Defynance to learn more and apply for a Defynance ISA.