Chicago, IL (PRWEB) February 25, 2014
Last week, the Federal Reserve of New York released their Household Debt and Credit Report, including national debt data in regards to mortgages and student loans. Student loan debt was reported at a total of about $ 1.08 trillion in the fourth quarter of 2013. This highly surpasses credit card and mortgage debt, and is a more than 5 percent increase from the 3rd quarter of 2013. As CF Funding has mentioned before, student loan debt is a serious problem in the U.S. that can prevent many young people from getting a mortgage. On the other hand, the lender reported on February 12 that millenials are increasingly applying for home loans and are now the second largest age group of recent homebuyers.
So how can these two factors coincide? David Stevens, chief executive of the Mortgage Bankers Association, was quoted on Yahoo Finance on February 21st as saying First time homebuyers are usually 40% to 45% of the mortgage markettoday theyre close to 35% and we think thats directly correlated to student loan debt. Stevens has described student debt as a big issue, one which is “going to have an extraordinary dampening effect on young peoples ability to borrow for a home, and thats going to impact the housing market and the economy at large. CF Funding hopes to see the growth of student debt slow in 2014 as the economy improves.
The new Qualified Mortgage rules were implemented this year by the Federal Reserve to tighten lending standards. This may also give students with a high debt-to-income ratio more difficulty in applying for a home loan, as Qualified Mortgages do not allow a debt-to-income of more than 43 percent. CF Funding suggested that students follow advice from the lenders past news release on February 7th, titled How Student Loans Affect Mortgage Lending, such as working part-time or full-time while in school to save money and reduce debt.
Students with high amounts of monthly debt who are curious about their loan options should contact the loan specialists at CF Funding today for more information, by calling 630-328-8900. The lender will keep readers updated on how student loan debt may affect the housing industry via social media at http://www.facebook.com/cffundingcorp.