Baltimore MD. June 19th 2024.
In another move to enrich the benefits of IndiSoft’s collaborate technology solution dedicated to expanding and preserving sustainable homeownership, IndiSoft has partnered with eFiscal Networks’ Student Debt Solutions (SDS™).
Student Debt Solutions helps student loan debtors resolve their debt by taking advantage of federal repayment programs through sophisticated algorithms and a user-friendly application. For over a decade, SDS has helped thousands of student loan debtors find solutions for default resolution, cancellation and forgiveness options as well as repayment plans to reduce monthly or total repayments.
HUD-certified Housing Counselors (HCA)s with clients who have student debt affecting their ability to purchase a home or who need debt management may now offer SDS to their clients to see and track the client’s progress while working in IndiSoft’s HomePrep™ mortgage-readiness module. Furthermore, the results of the plan flow back into HomePrep™ to be leveraged by the HCA to improve their client’s cashflow.
A Critical Time for Student Loan Debtors
When student loan payments resumed in October 2023, the Department of Education implemented a one-year grace period during which late payments won't be reported to credit bureaus. The resumption of credit reporting in October 2024 is expected to have significant repercussions on the housing market. Millions of borrowers may find themselves bracing for the financial impact in just a few months.
Challenges for Homebuyers
The housing market, particularly for first-time homebuyers, is fertile ground for student debt relief. Potential homebuyers burdened with student loan debt may be denied or significantly delayed by the need to remediate their student loan debt, a complex and frustrating endeavor if done without assistance. It is also important to note the relationship between student loans and credit scores. When late payments are reported again, starting in October, borrowers who struggle to meet their obligations will likely see their credit scores decline. A lower credit score can severely limit an individual's ability to qualify for a mortgage or secure a favorable interest rate. For many, the ramifications of inattention to student debt payments could tarnish their dreams of homeownership.
Mitigating the Consequences
Melissa Towell Maguire, a student debt expert at SDS commented, “addressing the challenge of delinquency is crucial. Borrowers need to align their student loan repayment plans with their homeownership goals. Understanding the interplay between student loan payments and the debt-to-income (DTI) ratio is vital. By developing strategies to reduce their DTI, borrowers can enhance their mortgage eligibility and better manage their financial future. Borrowers need to make sure to understand their budget, manage expenses and save for a down payment. There are strategies to lower monthly payments like Income-Driven Repayment plans or refinancing.”
She went on to say, “As the one-year grace period comes to an end, it is imperative for borrowers to take proactive steps to safeguard their financial health. The intersection of student loans and homeownership presents both challenges and opportunities and understanding this dynamic and being able to assist borrowers with personalized strategies to improve their credit scores and DTI ratios will be key to navigating the road ahead.”
About Student Debt Solutions
Student Debt Solutions is a self-service software solutions for consumers with student loans. SDS guides them through a quick analysis of all federal student loan repayment options to identify the best plan to reduce their student loan payments. For over a decade, SDS has helped thousands of student loan debtors find solutions for default resolution, cancellation and forgiveness options as well as repayment. For more information email sales@myresolvent.com. For a demo, go to: Schedule SDS Demo
About Indisoft
Indisoft LLC is a Columbia MD based technology company providing cloud-based, collaborative technology solutions to a wide array of stakeholders. Its National Housing Advocacy Platform (NHAP) unifies the efforts of HUD-certified housing counselors, the Government Sponsored Enterprises, state housing finance agencies, community legal services, city and county governments, local courts, federal agencies, independent mortgage bankers, mortgage servicers, commercial and non-commercial banks, credit unions and mortgage loan officers working together to preserve and expand homeownership in the United States. For more information, email Cam.Melchiorre@indisoft.us or go to https://homeprep.us/ and schedule a 30-minute demonstration.