Lending Arizona Mortgage News

Student Loan Cash-Out Refinances

August 30th, 2021 12:39 PM by William Andrews NMLS # 182790

Student Loan Cash-Out Refinances are now eligible under the Fannie Mae standard loan program.

Highlights of this refinance feature include:
  • Standard Fannie Mae cash-out refinance eligibility LTV/CLTV/HCLTV ratios apply
  • High Balance loans are allowed
  • DU Approve/Eligible required
  • At least one student loan must be paid off with proceeds from the subject transaction with the following requirements
    • At least one borrower must be obligated on the student loan(s) being paid off
    • The student loan must be paid off in full, partial payments are not permitted
    • Proceeds must be paid directly to the student loan servicer at closing
    • Only the first lien and student loan(s) may be paid off through the refinance. No additional payoffs allowed.
Note: A payoff demand statement is required for every student loan being paid off through the refinance.
  • Maximum cash-out to the borrower (over and above the student loan payoff) is the lesser of 2% or $2,000 of the new mortgage.
  • Waiver of the cash-out refinance LLPA if all requirements are met
  • What does this mean?  Higher loan amounts and lower fees for refinance loans where you are only paying off the existing mortgage and student loans.
Posted by William Andrews NMLS # 182790 on August 30th, 2021 12:39 PM


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