How to pay down student debt by buying a house
SEATTLE, Wash. — Americans hold $1.4 trillion in student debt.
The Federal Reserve Bank of New York reports that at the end of 2015, more than 29 million people owe up to $25,000. More than 415,000 people more than $200K! And spending more on student debt means less money to buy a home.
Enter Eagle Home Mortgage. The Miami-based company announced today they will be offering a deal—paying off part of your student debt if you purchase a home from Eagle Home’s parent company, Lennar. They’ll take 3% of the purchase price—up to $13,000—and put that toward your debt.
But is the deal as good as it sounds, especially in a city like Seattle that continues to grow daily as Millennials move to town for work?
Kyle Moss, a real estate agent with Seattle-based Redfin says, “it’s a marketing ploy, but it will be helpful.”
Builders have been offering incentives for years, from paying closing costs or paying down mortgage rates. That means the money to pay for the program could come from those sources or potentially from the lender themselves, cutting a deal with the prospective buyer.
As for this deal, it is targeting a younger demographic, one which may feel that home ownership is out of reach because of student loans
In an interview with the Wall Street Journal, Doug Cropsey, a senior VP at Eagle said “Obviously there’s a benefit to bringing more people into the home buying market. We’re trying to design something here that supports affordability and creates that path to homeownership,”
“For builders and sellers, their goal is to create buyers,” said Moss. “By making homes more affordable, they are creating a larger buyer pool.”
To take full advantage of the deal, that would translate to you buying a home for just pennies under $435,000. Right now, the average home price in Seattle sits just below the $659K mark.
We’ve reached out to Lennar and Eagle Home Mortgage to see if their deal will extend to home buyers in Western Washington. We’ll keep you informed of what they let us know.