For many people with a student loan, making the repayments is hard enough, let alone thinking about getting a mortgage. The state of Maryland is offering a new program to help these borrowers buy a house and pay off student debt at the same time.
The SmartBuy scheme was rolled out last week. This program was developed to enable those with student loans to get into the real estate market. Maryland Lieutenant Governor Boyd Rutherford said, "Traditionally, people in their twenties and thirties would account for a substantial share of Maryland's first-time homebuyers, but we've seen a little difference in that demographic over the years, and it's believed that student loan debt is a part of the challenge."
SmartBuy works by paying fifteen percent of the home's value towards outstanding student debt. For example, someone buying a house worth $200,000 would receive $30,000 towards their loans, leaving them responsible for repaying any outstanding sums. A 5 percent deposit is required, and with $10 million available, the initiative should allow many first-time buyers to get into the real estate market.
To qualify for the SmartBuy scheme, buyers need to have debt of at least $1,000 and be up to date with their loan repayments. House purchases need to be financed via the Maryland Mortgage Program, and buyers must stay in their property for a minimum of five years. Also, the only homes eligible are those owned by Maryland's housing department. A spokesman for the department, Michael White, said there are almost twenty move-in-ready homes available, with prices between $70,000 and $310,000.
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