Tough Choices: Ameritech Financial on Repaying Student Loans or Saving for a New House

Homeownership

Many people straddled with student loan debt are near the age when the average American begins to think about purchasing a home. Home ownership is a life goal for many and for some people, college is a stepping stone toward that major accomplishment. However, a college education comes with a hefty price tag that can stifle the homeownership process. Faced with this predicament, many graduates will feel the need to choose between concentrating on paying off student loans or saving for the down payment on a house. Ameritech Financial, a document preparation company, aims to help student debtors with this tricky scenario by offering assistance in applying for and maintaining enrollment in income-driven repayment plans (IDRs) that base monthly payments on income level and family size. These programs, which also help a borrower work toward eventual loan forgiveness in 20 to 25 years, could be the difference between renting and owning a home.

“We can help people apply for federal programs that are intended to lower their loan payments,” began Ameritech Financial Executive Vice President Tom Knickerbocker, “and what they do with that extra money every month is up to them. Some people might be very proactive and use this money for home equity.”

There are compelling arguments to either approach — paying off student debt or purchasing a home. Owning a house could help build equity, plus home prices have increased every year by 6.5 percent since 2015. Because mortgages usually come with lower interest rates than other consumer loans and are considered “good debt” since they create home equity, the debt acquired for this type of purchase should not be terribly received. Additionally, the interest paid on a mortgage can represent a nice tax deduction.

We can help people apply for federal programs that are intended to lower their loan payments and what they do with that extra money every month is up to them.

Tom Knickerbocker

Executive Vice President of Ameritech Financial

Much of the argument in favor of paying off student loans before purchasing a home is related to the idea that any debt is bad debt. While student loans are not the most vital aspect of a person’s credit report, they are still a factor. A better credit score will help a buyer secure a lower interest rate on a home purchase. This could save thousands of dollars over the entire term. If the student loan interest rate is variable, it will likely go up in the future, creating extra incentive for paying the loan off quickly. Finally, debt can have a negative effect on a person’s well-being, often contributing to mental health issues like anxiety or depression.

The issue with these two choices is that they seem to cancel each other out. This, according to Knickerbocker, is not necessarily the case. “It’s possible that a person will not have to choose between paying off loans or buying a house,” he explained, “because with an IDR, you can stay current on your loan while potentially freeing up cash for a down payment or mortgage payments.”   

About Ameritech Financial

Ameritech Financial is a private company located in Rohnert Park, California. Ameritech Financial has already helped thousands of consumers with financial analysis and student loan document preparation to apply for federal student loan repayment programs offered through the Department of Education.

Each Ameritech Financial telephone representative has received the Certified Student Loan Professional certification through the International Association of Professional Debt Arbitrators (IAPDA).

Ameritech Financial prides itself on its exceptional customer service.

Ameritech Financial Newsroom

Contact

To learn more about Ameritech Financial, please contact:

Ameritech Financial
5789 State Farm Drive #265
Rohnert Park, CA 94928
1-800-792-8621
media@ameritechfinancial.com

Source: Ameritech Financial


Categories: Financing and Student Loans, Financial News

Tags: federal student loans, homeownership, income-driven repayment


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About Ameritech Financial

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Ameritech Financial is a document preparation company that helps borrowers enroll in the federal repayment program that matches their individual financial needs, potentially lowers payments and gets them on track for student loan forgiveness.