Will student loan repayment resumption crash the housing market?

[Anonymous]

Anonymous wrote:People who have loans clearly think *everyone* has loans, or more pertinent, massive loans.

That isn't going to be true at all. Some people have loans. Many of those have manageable loans. DC market has many buyers who make plenty of money. Dual income 400k HHI is normal. VERY normal.

The average student loan debt for most professional grad programs is in the $200,000s.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Won't affect the housing market at all. Having a huge student loan balance means you need a huge down payment to even get a mortgage. Servicers use a flat percentage of your total student loan balance to figure your debt to income ratio when you're making $0 payments. So doctors and lawyers all have to have a large enough down payment to offset the calculated $3-4k monthly student loan debt before even getting the mortgage.

What it will affect is credit card debt/defaults, evictions, and overall consumer spending.

Doctors all take $0 down mortgages that are tailored to doctors (student loan debt but very secure income earning potential). We had one as did all our residency friends.

Don’t those come with high interest rates?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:September 1 can't come soon enough. Expect lots of buyers rushing to buy before then because they won't be able to qualify for mortgages afterwards.

Honest question, when people with student loans apply for a home now, don't lenders factor in the student loan? I can't imagine they ignore it even if people do not need to pay right now.

When a debt is reported as having a $0 monthly payment, the bank from which you're seeking a mortgage will not factor it into your mortgage eligibility.

Stop pulling things out of your a$$ and pretending you know what you are talking about. Underwriters look at your entire debt to income ratio not just your monthly spending, you complete idiot.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:September 1 can't come soon enough. Expect lots of buyers rushing to buy before then because they won't be able to qualify for mortgages afterwards.

Honest question, when people with student loans apply for a home now, don't lenders factor in the student loan? I can't imagine they ignore it even if people do not need to pay right now.

When a debt is reported as having a $0 monthly payment, the bank from which you're seeking a mortgage will not factor it into your mortgage eligibility.

Stop pulling things out of your a$$ and pretending you know what you are talking about. Underwriters look at your entire debt to income ratio not just your monthly spending, you complete idiot.

We refinanced twice during the pandemic in 2021 when my loan balance was $160K and I wasn’t making payments. I was on track for PSLF forgiveness at some point in 2022 (which I achieved in August 2022). Neither lender considered my outstanding student loans in their underwriting decisions. On my credit report it listed the loans as “In deferment” with a $0 monthly required payment and a $160K loan balance.

Neither lender calculated the student loan in our DTI.

[Anonymous]

Anonymous wrote:

Anonymous wrote:People who have loans clearly think *everyone* has loans, or more pertinent, massive loans.

That isn't going to be true at all. Some people have loans. Many of those have manageable loans. DC market has many buyers who make plenty of money. Dual income 400k HHI is normal. VERY normal.

The average student loan debt for most professional grad programs is in the $200,000s.

But the average person is not a college grad much less a grad school grad.

[Anonymous]

Dc area has the highest amount of student loan debt due to the educational level of people around here. It will be an interesting situation. I don’t think it will crash the housing market but will drag the economy down. You keep hearing people are flushed with cash and the consumer is damn strong, yes because they paused student loan payments. People have forgotten about it all together.

[Anonymous]

How much? Lol it’s a lot of money, like 5 billion a month in payments!!!! It will have a major effect on the entire economy.

"The pause is gone within 60 days of this being signed," McCarthy told Fox News anchor Shannon Bream. "So that is another victory because that brings in $5 billion each month to the American public."

[Anonymous]

Anonymous wrote:

Anonymous wrote:No, because people for whom this affects weren't in the housing market in large numbers to begin with.

Exactly. People in debt aren’t taking on mortgages. That would not be a wise move at all.

Pay off those student loans first.

Yes, pay off those student loans first, and rent until you die.

[Anonymous]

Anonymous wrote:How much? Lol it’s a lot of money, like 5 billion a month in payments!!!! It will have a major effect on the entire economy.

"The pause is gone within 60 days of this being signed," McCarthy told Fox News anchor Shannon Bream. "So that is another victory because that brings in $5 billion each month to the American public."

Except that Biden has changed the federal loan repayment formula through the Department of Education, effectively requiring only pennies on the dollar repayment with generous forgiveness terms.

[Anonymous]

Anonymous wrote:How much? Lol it’s a lot of money, like 5 billion a month in payments!!!! It will have a major effect on the entire economy.

"The pause is gone within 60 days of this being signed," McCarthy told Fox News anchor Shannon Bream. "So that is another victory because that brings in $5 billion each month to the American public."

The five billion is not gone you knucklehead. Either the govt gets it so they need to tax less or the people who own the loans gets back their principal and interest which can be put back into economy.

The five billion does not belong to the deadbeats it belongs to people or US govt that loaned them the money

[Anonymous]

Anonymous wrote:

Anonymous wrote:People who have loans clearly think *everyone* has loans, or more pertinent, massive loans.

That isn't going to be true at all. Some people have loans. Many of those have manageable loans. DC market has many buyers who make plenty of money. Dual income 400k HHI is normal. VERY normal.

The average student loan debt for most professional grad programs is in the $200,000s.

And I counter with "The Federal Reserve reports that the median student debt for all borrowers in 2021 was between $20,000 and $24,999."

Then there is also this: https://educationdata.org/average-student-loan-debt

Your 200k grad student loans are likely to be doctors and lawyers who also make much higher incomes.

[Anonymous]

I owe $90K and have to start repaying $500 a month in August after that next April it goes to $1200/month. It is still worth it to hang on to get $59K forgiven through PSLF in 3 years but it’s making me effectively net level with any raise. I’m just finishing paying off two covid-induced debts when this one restarts. I am a perpetual renter and may never be a homeowner.

[Anonymous]

Anonymous wrote:Dc area has the highest amount of student loan debt due to the educational level of people around here. It will be an interesting situation. I don’t think it will crash the housing market but will drag the economy down. You keep hearing people are flushed with cash and the consumer is damn strong, yes because they paused student loan payments. People have forgotten about it all together.

You think that because it fits your narrative aka "your truth". Real life isn't quite your fantasy. Most people with loans don't have 200k in loans and those who do tend to make much more money as they're in the higher paying professions the degrees equipped them for.

Perhaps you're one of the unlucky ones who took out 200k for a dubious master's in a field that didn't need it. But what your situation is isn't going to be the situation for everyone else.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:People who have loans clearly think *everyone* has loans, or more pertinent, massive loans.

That isn't going to be true at all. Some people have loans. Many of those have manageable loans. DC market has many buyers who make plenty of money. Dual income 400k HHI is normal. VERY normal.

The average student loan debt for most professional grad programs is in the $200,000s.

And I counter with "The Federal Reserve reports that the median student debt for all borrowers in 2021 was between $20,000 and $24,999."

Then there is also this: https://educationdata.org/average-student-loan-debt

Your 200k grad student loans are likely to be doctors and lawyers who also make much higher incomes.

Yes, the people holding median levels of student loans are going to have a bad time. These are the people you lecture for not putting their old payments in savings during the pause. They are going to be hit with $200-$500 per month bills that they do not have budgeted and it will absolutely affect the overall economy. Going to be major political hit too since people get upset once they get the bill in the mail.

[Anonymous]

I don’t know, less spending power out there for people fighting for that first house might contribute to falling prices.