Should You Roll Student Debt Into Your Mortgage

Q: I am planning to refinance my home. I still have student loans, should I roll my student loans into my mortgage? Peter, Phoenix, AZ

A: There are both pros and cons to rolling student loan debt into mortgage debt. Refinancing to eliminate school debt may be advantageous to the extent that student loans typically can’t be discharged in bankruptcy. Also, rolling student debt into a mortgage may allow borrowers to invest more money in tax advantaged retirement plans sooner which results in substantial long term financial benefits. However, there are drawbacks to replacing student loans with mortgage debt like not being able to defer repayment–you can normally defer student loan payments when a life event or circumstance arises making payment impossible, but you typically cannot defer mortgage payments in this way. The decision to roll student loans into a mortgage is a personal choice–consider how stable you believe your personal financial situation is likely to be for the foreseeable future. Thanks for your question, Peter.

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