Skip to main content

Mortgage Coach And LoanSense Partner To Help Student Loan Holders Become Homeowners

Navi Persaud
Sep 29, 2021

A new partnership between Mortgage Coach and LoanSense is aiming to help student loan holders achieve homeownership by helping them enroll in Income Drive Repayment plans, lowering their DTI and helping to unlock improved home financing options.

Mortgage Coach announced its partnership with LoanSense, an online student loan advisor that helps federal student loan holders enroll in affordable repayment and forgiveness plans. With the partnership, mortgage lenders are able to help homebuyers with high monthly federal student loan payments achieve better home financing outcomes by enrolling in federal student loan Income Driven Repayment plans and Public Service Loan Forgiveness.

Despite strong incomes and credit scores, many of the 42.9 million Americans with federal student loan debt are either denied home financing or have reduced home purchasing power because they have higher debt-to-income ratios (DTIs) due to student loans, according to a press release. Mortgage Coach and LoanSense believed that federal IDR plans can substantially reduce the monthly student loan burden for borrowers of every income level and for borrowers who carry student debt and did not graduate.

Mortgage Coach’s partnership with LoanSense gives lenders access to a purchasing power calculator that determines how much borrowers’ monthly student loan payments can be reduced – and how much their home purchasing power can be increased – through enrollment in an IDR plan.

Once borrower eligibility is determined, loan originators can electronically refer borrowers who would benefit from enrolling in an IDR plan to LoanSense, where they will receive assistance navigating the complexities of correctly completing and submitting their IDR application. Upon IDR plan enrollment, LoanSense notifies lenders so they may resume the home financing process with increased purchase power, which can be accessed in as little as three weeks.

LoanSense also helps eligible consumers correctly enroll in PSLF, which discharges remaining federal student loan debt after 10 years of full-time employment in public service.

Alongside each LoanSense purchasing power calculation, Mortgage Coach generates a Rent vs. Own Total Cost Analysis, which compares the costs and equity gains of renting, owning and owning a more valuable home with increased purchase power over time. The illustration of the borrower’s adjusted monthly student loan burden and mortgage benefits is a first-of-its-kind innovation according to the companies.

“Addressing the barrier student loans present to homeownership is part of Mortgage Coach’s ongoing and relentless effort to equip lenders with data and technology benefits to better serve their communities with more home financing options,” said Mortgage Coach president Joe Puthur. “The impact of reducing a borrower’s student loan payment by a few hundred dollars a month can be life-altering. It could mean $50,000 more for a better school district, an extra bedroom, or closer proximity to employment.”

“A home is 80% of the average American’s wealth at retirement and delaying access to student-debt burdened borrowers will have major socio-economic impacts,” said LoanSense Founder and CEO Catalina Kaiyoorawongs.

Published
Sep 29, 2021
More from
Tech
Total Expert Introduces New Functionalities And Products For Banks And Lenders

Total Expert upgraded its CRM and customer engagement platform with a series of new functionalities and products.

Tech
Oct 22, 2021
Blend Launches New Income Verification Product

Blend Income Verification is a new product for financial services firms that provides instant income verification for mortgages and soon, consumer loans and deposit account opening.

Tech
Oct 21, 2021
ICE Mortgage Announces 0 Percent Loans For HFA Borrowers

ICE Mortgage Technology's latest Encompass update, Encompass 21.3 supports the ability for lenders to offer 0% loans.

Tech
Oct 20, 2021
FormFree Taps Amazon Web Services For Consumer Financial Identity Solutions

FormFree will use Amazon's blockchain technology to manage its latest consumer Financial DNA solution and its newly introduced FormFree Exchange.

Tech
Oct 19, 2021
Wemlo Introduces Third-Party Processing Solution

Wemlo announced the first third-party mortgage processing solution, Loan Brokering System.

Tech
Oct 18, 2021
ICE Unveils Transaction-Based Indices For Residential Mortgage Interest Rates

Intercontinental Exchange Inc. launched its suite of U.S. residential mortgage locked rate indices.

Tech
Oct 18, 2021