Ready for the surprise of the day? If you have no debts and $10 in your pocket, you have more wealth than 25 percent of Americans. It seems like a shocking statistic at first, but when you think about it, it makes sense. The average amount of debt for a college graduate is as high as it has ever been and, with wages being largely stagnant, trying to pay off loans and build net worth seems impossible, especially if you're trying to save for a down payment at the same time.
With so much debt and so little money to save, buying a first home has become a formidable task. But a new program from Gate City Bank in North Dakota is trying to make buying a first home a little bit more appealing for these recent graduates by offering education loan refinancing with a fixed 1 percent APR if they finance the home through the bank. To this point, 25 of these loans have been closed and there are another 25 or so in progress.
The BetterLife Student Loan program offers borrowers with two- or four-year degrees the opportunity to refinance up to $50,000 in student loan debt per household with the one qualifier being that they have made 12 consecutive on-time payments on the loans. With a 10-year repayment term, the 1 percent loan is much more appealing than the typical 5 percent or higher repayment terms in excess of 20 years, realtor.com reports.
This program may not be the best choice for everyone, nor will everyone be approved for it, but it is still a step in the right direction for helping people burdened with student debt in buying a first-home.
