Consolidating student loans and mortgages

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Those who might need those protections may want to forego the program.But those who have significant home equity – and significant student debt – should take a close look.When you consolidate student loans – either federal or private – it’s one payment to one lender, once-a-month. Loan consolidation for student loans was created to make it easier for millions of borrowers to pay off their debt.Both federal and private lenders recognize that lower monthly payments help may be the best option, if you don’t get the job you want immediately after graduating from colleges.College graduates with student debt soon will have a new option: the ability to roll those student loans into their home mortgage. Turning student debt into mortgage debt could cut the interest rate and payments required of some debtors.Fannie Mae, which works with virtually every lender in the country, has created a new standard that will allow borrowers with sufficient home equity to fold their student loan balances into their home mortgages. However, it also strips away some of the protections that come with federally guaranteed student loans.There are important factors to consider when refinancing your federal student loans specifically, as those loans offer a unique set of repayment benefits, which would be negated by refinancing to a private loan.This is where you could benefit from refinancing loans individually; you could refinance outstanding private student loans while keeping your federal loans separate to take advantage of income-based repayment or student loan forgiveness programs.

While this simplifies repayment, it doesn't necessarily help when you're interested in reducing student loan payments.

Applying for a private refinance loan could help you reduce student loan payments and gain more control over your debt.

You could potentially take advantage of lower student loan interest rates, longer loan terms, and lower monthly payments to free up funds and focus on what’s next.

Of course, there are several factors to consider before refinancing student loans.

Federal student loan consolidation simply combines your outstanding loans into one loan.

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