Can I refinance my home and roll in 17K of student loans?

Asked by tdproffer, Atlanta, GA Sun Jan 27, 2013

My credit score is 730. My home is valued at 92K and my note is 56K. I owe 27K in student loans, of which 17K is unsubsidized. I would like to refinance my home and include at least part of that 17K. None of the big companies are interested in a loan less than 75K.

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Michael Hammond’s answer
Michael Hamm…, Agent, Suwanee, GA
Wed Jan 30, 2013
Couldn't help but notice, Dorcas Walter from NY, that you also appear to be (in no particular order) Terry Morgan from Little Rock City, Diana Williams from New York city USA, Jessica Wright from Ohio here in USA, and Phil Morgan from Idaho here in United State. Being a history buff, wasn't aware that we had metamorphosed into a single state yet, although some in Boise might like that idea. BTW, if you are all of these different people, why use a single screen name like Henrymelvingloballoanfirm, Home Buyer, Atlanta, GA ? You wouldn't be having folks WIRE you money, would you? Good Luck!

Michael Hammond
0 votes
Robert Robbi…, , Atlanta, GA
Mon Jan 28, 2013
FHA does 85% cash out (but you will have PMI for a minimum of 5 years) and Conventional will do 75% cash out. Both are doable and we do loans under 75k down to 45k but....
Both will depend highly on the appraised value of the home.
You may also investigate if you can consolidate your student loans with a new student loan encompassing all of them.

Best of luck,

Rob Robbins
Senior Mortgage Consultant
Cornerstone Mortgage Group
6151 Powers Ferry Road NW
Suite 610 Atlanta GA 30339
Office 678-578-7613
Cell 404-932-5353
0 votes
, ,
Mon Jan 28, 2013
Your options will really all depend on your appraised value. The appraised value to be used would be determined by the appraiser selected by the mortgage lender. Your scenario would have to be treated as a Cash Out Refinance though.

For both an FHA and a Conventional mortgage, you are limited to an 85% LTV on a cash out refinance. The size of your loan amount should not be an issue.

You would need to consult with your CPA to determine whether or not the Mortgage Insurance would be tax deductible.

Working with a knowledgeable and seasoned loan officer is critical in today's market. Getting Pre-Qualified is the only way for you to find out your options. To get Pre-Qualified for your refinance, you can submit your request online at

Rodney Mason, NMLS #151088
Sr Loan Officer
Prospect Mortgage
825 Juniper St NE, Atlanta, GA 30308
Office: (404) 591-2453
Apply Online at
Licensed in Alabama & Georgia with over a decade of lending experience.

Prospect Mortgage offers a full selection of mortgage programs including:
Conventional | FHA | FHA 580-639 FICO | FHA 203K Renovation (Streamline & Consultant) | HomePath® | HomePath® Renovation | HomeStyle® Renovation | VA | USDA | GA Dream | Jumbo Financing.
0 votes
, ,
Mon Jan 28, 2013
Good morning tdproffer,

Your best bet is to meet in person with a Local Mortgage Banker in your community. Let your Loan Officer complete a thorough Prequalification. You'll receive sound counsel on whether it makes sense to include the student loans in a refinance.

You'll probably also find it more likely a Local Mortgage Banker in your community is willing to make a loan in this amount.

Trevor Curran
NMLS #40140

If you thought my answer was helpful, please give me a "Thumbs Up." Thanks!
0 votes
, ,
Sun Jan 27, 2013
Ok. Let's see if this makes financial sense:

FHA let's you cash out equity up to 85% of the value, however, that means paying mortgage insurance. With $74,000 available to pay the existing mortgage ($4000 in closing costs), you'll have just enough to cover the loans. Mortgage insurance is not tax deductible. Student Loans are. So, not so smart idea to go that way.

Conventional lending goes to 75% of the value, giving you about $10,000 after paying $3000 in closing costs and fees. However, in going that high, your rate is affected because of the points associated with pulling equity to 75%. The best figure is 60% max, however, that won't cut it. At 70%, you'll have about $6000 to play with (after paying $3000 in closing costs).

Now, here is where having more information about you helps. Of course, don't go public with this, but how much have you saved for retirement so far? Do you have or expect to have children one day? If you have retirement set up, where is it?

What I'm getting at is that if you are going to use equity to pay off debt, then you'd better already have your retirement plan set up. Do you want to reach retirement age and say,"Look at me! I'm debt free but I'll have to work till I drop dead"? Or do you want to be able to say, "Look at me! I can retire young enough to enjoy life and use my retirement money to pay off my debt"?

The biggest problem people make is they focus more on paying their debtors, rather than paying themselves first. We put so much emphasis on our credit report and our debtors and we forget about making sure we can live comfortably. You have to pay yourself first.

Where to save? Check out and search: Doug Andrew IUL. This life insurance product will make you think twice about your IRA's, 401k's, Roth and social security. Here's a few simple questions to think about: When you retire, what will be your income tax bracket? If you don't know, why are you investing your money in a product that taxes you when you retire? If you think that the $500,000 retirement balance is yours when that time comes, think again. If your tax rate is at 70% (like it was in the 1970's), you're only going to live on $150,000. Aha, the Roth IRA doesn't require you to pay taxes because you pay post tax dollars into it. However, you are limited to the amount of money you can invest per year and the amount of IRA's that can be open annually. You can open as many IUL's as you'd like.

So, to answer your question, yes you can refinance and pay off your student loans. Does it makes sense? No, but that's just my opinion.
0 votes
Champakshah, Home Buyer, Atlanta, GA
Sun Jan 27, 2013
yes--my friend--you can --and you are write --most lenders will not be

Just listen to John Adams Radio show on Saturday at 12:00 pm on AM 920 ( Atlanta )

or go to his website -- and ask him question and

a phone number for Jim Duffy --Mortgage Lender --may help

you can get 80% LTV Cash out Refinance --make sure that they roll over closing

costs --show you get $16000 cash back to you --

Mention in your loan application --that you want to pay off $17000 Student Loan

--- Good Luck
0 votes
Susan Jackson, Agent, Atlanta, GA
Sun Jan 27, 2013
You will need to talk with a lender to see how much of the equity in your home is available to you. Then you can determine how much of a cash out you can receive, and in turn pay your student loans.
0 votes
Morgan Campb…, Agent, Valdosta, GA
Sun Jan 27, 2013
I am a loan officer in Georgia for Envoy Mortgage. You can do a cash out refinance on your home and then use the cash as you please. There is no minimum loan amount on refinances at my company. I can close conventional, FHA and VA loans in 14 business days or less. You can apply for new mortgages and refinancing on my website! If you have additional questions, please feel free to call or text me anytime.

Happy Sunday!

Morgan Campbell, NMLS#957183
Envoy Mortgage
Cell: 229-563-5903
Web Reference:
0 votes
Michael Hamm…, Agent, Suwanee, GA
Sun Jan 27, 2013
Check with a Mortgage Lender, tdproffer. Based on the things we are still learning about the new HealthInsurance Care Reform Bill, it might be in one of those 2100+ pages somewhere. Please call, text or email if we can provide further assistance. Good Luck!

Michael Hammond
0 votes
Tim Moore, Agent, Kitty Hawk, NC
Sun Jan 27, 2013
No, you can't do that in that way. You might be able to get cash out on a refi that you could then use to pay oof or pay down any loans you want to use it for. Talk with your current lender and ask if you have enough equity in the house to get some cash out.
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