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Posted in Student Loans
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CreditRebecca

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Should I refinance my student loans?
I continually see offers available through credit karma that suggest I refinance my student loans in order to have a lower monthly payment. I have worked really hard to repair my credit and I'm finally in a decent position. My issue is this: I would like to buy a house within the next 6-12months which means taking out a significant mortgage. If I refinance my student loans now, and take out a loan for over 60K, will that count against me when I want to get a mortgage in a short time frame?
The way I have wrapped my mind around it is I already have the student loans out, so just transferring them all to one loan, shouldn't really count against me, right?!
Thanks for your help!

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Doing a refi will bring your credit down and it is usually not a good idea to make any changes to your credit prior to going for a mortgage loan. Your loans are paid down now, when you refi you open a new loan with a full balance owed and that hurts. You also get Hard Inquiries and you will lower the "average age of accounts". Would a refi help you though when it comes to "debt to income ratio" by getting lower payments? Is "debt to income ratio" even a concern" Also know that the recommendations on here are basically just advertisements and are NOT preapprovals. Keep in mind that lenders will use FICO scores, not the scores you get on here. I advise doing some serious reading about refinancing, but my best guess is to not do it at this point. You don't want to jeopardize the chance of getting a mortgage loan.

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