Rolling student loans into mortgage

[throckmortonDO]

Lets say as an attending you have about 400k in student loans from undergrad and med school @ 7%.
you have about 150k in cash.
you are interested in a house worth 350k.
your credit is excellent >780, your attending salary is around 300k.

Is there a way to get a 750k loan and roll loans into mortgage?

HELOC allows borrowing 85% home value minus the balance left on the mortgage, so that likely wouldn't work. Construction loan could net about 150k in addition to the home value, but that might not get approved unless the house needed that much repair. What about buying a foreclosure?. Would there be any way to qualify for a mortgage like this without using a 'doctor loan' that doesn't take into account the student loan balance?

Any ideas?

throckmorton

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[link2swim06]

You can achieve an 'near mortgage equivalent interest rate' by refinancing your student loan with some of the private companies and it will remain a student loan.

 

[throckmortonDO]

Well, maybe if one would choose a 5 year payoff rate, otherwise their rates are closer to 6-7% for >10yr loan refinancing, which at that point, seems pointless as the govt one is already that much. In a mortgage, one can deduct interest from taxed further lowering the %.

 

[link2swim06]

https://student.drbank.com/rates/

You should be able to get lower than 6-7%. Plus maybe choose a longer mortgage to allow you to pay off the student loan faster. Honestly, the real perk is you can refi now in residency and the mortgage thing you would have to wait years.

And student loan interest can be deducted. And interest rates are likely going to go up...so don't bank on the current rates forever.

 

[throckmortonDO]

Student loan interest is capped at 2500 per year. or am I wrong?
https://www.irs.gov/taxtopics/tc456.html

 

[swamprat]

Student loan interest is capped at 2500 per year. or am I wrong?
https://www.irs.gov/taxtopics/tc456.html

Yes you are right. Also I think once ur an attending or make over a certain amount u can't even use the deduction anymore.

 

[dchristismi]

Yep. Ironic, isn't it? Those with some of the biggest loans can't deduct the interest once you get out into the world and have a "real" job.

 

[The White Coat Investor]

No one is going to loan you $750K on a $350K house.

That said, if you have home equity, you can do a mortgage/HELOC/HEL and use that to pay off student loans, effectively exchanging student loan interest for mortgage interest. Just realize there is no PAYE/IBR/REPAYE/PSLF for mortgages and they don't go away at death, so you'll need to buy a little more life insurance and disability insurance to cover that amount just in case.

 

[gman33]

You may be able to get a mortgage greater than 100% loan to value.
This is hard and I've only ever heard for like 5% more.
Maybe someone else can provide another example.
In most cases you are borrowing less than 100% of the LTV.

So no, the case you described is impossible

If you owned your house free and clear, there may be some advantage to getting a mortgage to pay off student loans.
Primarily the benefit would be in being to deduct interest.