Borrowing Against the American Dream

Student Loan Debt & Its Effect on Mortgage Lending

Craig Garcia, President
Capital Partners Mortgage

Through the second quarter of last year, student loan debt lagged behind only mortgages as the largest consumer debt segment in the United States. And while mortgage debt has remained steady, with negligible growth over the last 10 years, student loan debt continues to skyrocket. 

That growth in outstanding student loan debt has ripple effects across the nation's economy, as younger generations see much of their spending power go to monthly payments on this debt. In turn, that keeps many from feeling like they can take the step of buying a house. Today's guest post comes from Craig Garcia, who gives a glimmer of hope, along with some advice, for anyone who still wants that piece of the American Dream that is homeownership.

I’d like to talk to you about student loans. A recent Federal Reserve study showed that student loan debt has become a major hurdle for younger generations looking to buy a home. Being in the mortgage lending business, and seeing what we see on a regular basis, I wholeheartedly agree. Most of you out there with student loans might say something like, “yes, we already knew that.”

What you might not understand is that one of the main obstacles actually stems from the mortgage loan industry itself. Loan programs are challenging. It’s why you shouldn’t just go and apply for a mortgage on your phone or without putting some thought into it. 

The four most common loan programs available to potential buyers all treat student loan debt and payments differently. That sets the stage for confusion. Let me break down some options available to those consumers with student loan debt, because our job is to help as many people as are able to successfully complete the home buying process!

1.     VA Loans – If your student loan payments could be deferred for up to a year after closing, then the VA will then be able to state that they won’t count any student loan payments against you when it comes to qualifying for a mortgage loan as a Veteran.

2.     Fannie Mae & Income-based Student Loan Repayment Plans – Your student loan lender has options to base your student loan payment on your income, temporarily offering you relief with lower, more manageable payment terms. The most aggressive loan program that will accept that lower payment when it comes to qualifying you for a loan is Fannie Mae’s conventional loan program. They will look at your new payment terms and accept those when determining your eligibility for a mortgage loan.

It’s important to remember that, in these circumstances, you will still need to be able to cover a mortgage payment and student loan payment eventually. Make sure you plan for those expenses and know that you will be able to successfully pay them.

It’s an unfortunate fact right now that student loan debt has become a large obstacle when it comes to purchasing a house, but it hasn’t made it impossible. If you feel that homeownership is the next step in your life, come talk to us at Capital Partners Mortgage today, and we can offer you advice and guidance as to how you can achieve this goal!

- Craig Garcia, President | Capital Partners Mortgage

www.capitalpartnersmtg.com

Valore Group Merges with Illustrated Properties Real Estate

Illustrated Properties Real Estate has announced the merger of its Palm Beach-based office with Valore Group Real Estate.

Following the unification, the companies now operate under the Illustrated brand and are based in Illustrated’s iconic office within the famous Paramount Theatre Building at 139 North County Road. That office will be expanded to accommodate the unified brands, with buildout expected to be completed in late 2017.

Florida Realtors Vice President Eric Sain will serve as District Sales Manager for the Palm Beach office. He has nearly two decades of Palm Beach real estate sales experience and is responsible for production, management, coaching and agent accountability. Additionally, his leadership in the real estate marketplace includes Florida Realtors Associate of the Year in 2010 and National Association of Realtors Leadership Academy graduate in 2012.

Illustrated has been a luxury leader in northern Palm Beach for 45 years. The strength of the Illustrated and Valore sales forces, which both operate as part of The Keyes Company’s Luxury Division, undoubtedly puts them in a class of their own in the prestigious Palm Beach market. The combined brands have 50 Sales Associates and sell one out of five luxury homes in northern Palm Beach County.

“Both Valore and Illustrated have seen consistent growth in luxury sales thanks to the dedication, work ethic and creativity of the incredible Sales Associates at both brands,” said Keyes CEO Mike Pappas. “Our position in the luxury market will only strengthen with the team operating under one roof – especially in a one-of-a-kind office location like the Paramount Theatre Building.”

Valore Group was started by Keyes’ Vice President of Luxury Kevin Leonard at the height of the recession. In 2011, Valore and Keyes joined forces. Valore has enjoyed double-digit luxury sales growth each year since its launch.

Independently-owned and operated since its founding in 1926, Keyes is extremely active in luxury residential real estate. In 2016, Keyes listed more than $1 billion in luxury homes priced at $1 million or more.

Keyes is a Founding Member and Shareholder of Leading Real Estate Companies of the World^®, a global network of more than 550 premier real estate firms encompassing 4,000 offices and more than 128,000 Sales Associates in 55 countries.

In July 2016, Keyes and Illustrated Properties announced the completion of a merger between the two companies, which continue to operate under their existing brands. Overall, Keyes and Illustrated generate more than $6 billion in annual revenue from their real estate service lines.

Following the merger, Keyes and Illustrated are, together, the largest independently-owned real estate firm in Florida and a Top 25-ranked firm in the entire United States. In Palm Beach County alone, the companies have in excess of 1,100 Sales Associates and produce double the volume of their closest competitor.

Keyes and Illustrated control more than 20 percent of the $1 million-plus market in northern Palm Beach County.

To learn more about Keyes and Illustrated's luxury listings, check out CBS 12's "Mansion of the Week" real estate listings segment here.