Buying

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Weekly housing inventory data

Now that we are right in the middle of the spring buying season, my inventory model is simple: with higher mortgage rates, just like last year, we should be able to grow weekly active inventory between 11,000 – 17,000 on some weeks. Unfortunately, I batted a whopping zero last year since inventory growth never hit that level for even one week — even when mortgage rates hit 8%. This model was based on rates over 7.25%, which is my peak rate forecast.  

  • Weekly inventory change (March 22-29): Inventory rose from 512,759 to 517,355
  • The same week last year (March 23-30): Inventory fell from 413,883 to 410,734
  • The all-time inventory bottom was in 2022 at 240,194
  • The inventory peak for 2023 was 569,898
  • For some context, active listings for this week in 2015 were 1,012,704 

New listings data

While I am thrilled that new listings data is growing year over year, something I have been anticipating for some time, the growth in 2024 has been disappointing because I had expected a bit more by now. This was my big talking point on CNBC earlier in the year. Still, new listing data is a positive story. Here are the number of new listings for last week over the last several years: 

  • 2024: 59,854 
  • 2023: 48,442
  • 2022: 56,258

For context, new listings data at this time in 2010 ran at 326,266.

Price-cut percentage

Every year, one-third of all homes take a price cut before selling — this is regular housing activity and this data line is very seasonal. The price-cut percentage can grow when mortgage rates increase and demand gets hit. 

As inventory and demand grow year over year, the price-cut percentage data increases year over year. So, we will keep tracking this data line to see how high it goes this year. We keep it simple: higher inventory softness in demand means price growth is weakening. As we can see below, the year-over-year data is showing a higher percentage of price cuts.

  • 2024: 31.9%
  • 2023: 30.5%
  • 2022: 17.2%

10-year yield and mortgage rates

For those of you who have followed me for the last 12 months, you know how important the 4.34% level on the 10-year yield is for my economic work and therefore for the mortgage rate discussion. A break above this level would send mortgage rates toward 7.5%-8%. So far, so good here.

We had the PCE inflation report come out Friday and because some people were expecting a hotter number than estimates, it was perceived to be bullish for rate cuts. However, the markets were closed Friday, so we have to wait and see how trading goes on Monday. The 10-year yield channel is between 4.25%-3.80%, which looks correct as long as the economic data stays firm and jobless claims don’t break higher. This means mortgage rates will likely remain in the upper range of my 2024 forecast of 6.75%-7.25%.


There was not too much action in mortgage rates last week, but with jobs week coming up, we could see some movement. As you can see below, the 10-year yield has made a massive move from 2022 and has stayed above 4%, even with the progress we have made with inflation. Always remember, when it comes to discussions about rates and the Fed pivoting, it’s always labor over inflation data.

Purchase application data

Purchase application data didn’t move much last week. It was flat on a week-to-week basis and down 15% year over year.

Since November 2023, after making holiday adjustments, we have had 10 positive and six negative purchase application prints and one flat print. Year to date, we have had four positive prints versus six negative prints and one flat print.

What have 2022, 2023, and 2024 shown us? Purchase apps made a solid positive run up until mortgage rates started to get back over 7%. This was similar to 2023 data, when purchase apps had 12 weeks of a positive run-up until rates moved toward 7% and then 8%. 

Week ahead: We’ll see trading off the inflation report and it’s jobs week

First, the trading on Monday will be exciting because of the PCE inflation report; some argue it was hot and some say it wasn’t. The market decides this, and bond trading will judge it on Monday morning.

Also, Federal Reserve Chairman Powell talked on Friday. I believe Powell’s crucial comment was that the Fed won’t overreact to significant disinflation or heated inflation reports. I think some people missed this. If you want to understand why the markets still have three rate cuts priced in, it’s this mindset.

Then it’s jobs week, with four labor reports, and, of course, for me, it’s labor over inflation data, so buckle up!

Want more context? On the PowerHouse podcast with HousingWire CEO Clayton Collins, I discussed why the data lines we look at in the Housing Market Tracker are so critical for those in the housing industry.

Source: housingwire.com

Apache is functioning normally

One of the most critical moments in any race is the very beginning. A mistake at the start can snatch away a win before the race is even underway. Any coach will tell you that springing into action the moment the shot is fired is a critical success factor for any athlete.

A race is a useful analog for the mortgage business, especially as it relates to the refinance business.

Lenders in a purchase money market, like the one we’re in now, are running a long-distance race. Starting strong is less important for a deal that takes a long time to close.

Responding to the real estate agent’s or prospective borrower’s first call is the start of this race. Data show that returning that call within a few hours will get your race off to a good start. It’s amazing how many loan officers miss this, don’t return the call quickly, and lose their race before it’s even underway.

It’s the sprint that can really set lenders apart. In our business, that’s the refinance transaction.

Anticipating the start of the refi race

When mortgage rates finally rose above their historically low levels, the mortgage refinance business started to dry up. By the time rates reached 5%, the refi business was essentially gone.

This was a crisis for many large Independent mortgage banks that had created fine-tuned systems for refinancing loans and had virtually no trained sales force to prospect for new purchase money business.

The bankers who stockpiled cash they earned during the COVID crisis have weathered this storm, those that did not have the cash have either sold out or shut down.

Now, everyone is waiting for rates to drop and the refinance business to return. Most experts believe that it’s only a matter of time before mortgage rates come down. When they fall below 5% — maybe even before that — it will be a shot from a starter’s pistol and the race will be on.

The lenders who aren’t ready will falter under the pressure, stumble out of the starter’s blocks, and lose out to lenders who have prepared in advance for the influx of new business.

Leaders are preparing now to make sure they’re not the ones who are left in the dust when the race starts.

Preparing for the next mortgage market

What should lenders be doing now to be ready for the return of the refinance business? Those of us who have been in this business more than a cycle or two know what’s coming next. There is no secret or required magic to be a frontrunner when the refi business returns.

What it will take is strong leadership to spur lethargic institutions to action when it feels less risky to stay the course and wait. That’s an illusion, a false sense of security. The reality is this race will go to the prepared.

I can think of three important actions every lender should be taking now to be prepared for the next wave of refi business.

Build the right team

Given the new technologies and expert outsourcing options available to lenders today, staffing up to handle new business doesn’t make as much sense as it did in the past. Lenders have other options for building ability into their enterprises. That’s a good thing.

Instead of going to the expense and added risk of staffing up to handle more business, now is the time for executives to think through their strategic options and evaluate their existing partnerships. It doesn’t matter what the lender’s current capacity is, everyone should be thinking about this now.

This is the time to sit down with your A and B players and make sure they’re committed to the long term, and understand your commitment to them. The time to let your C and D players go has passed now. Do it if you haven’t.

Then, start visiting with outsourcing firms. I spent a good part of my career working for lenders who originated consumer direct but also provided essential origination outsourcing services to other institutions. When they’re done right, these partnerships offer a balanced model of operational efficiency and scalability, regardless of overall loan volume.

When this work is done, the lender will have a core team of domain experts supplemented by reliable outsourcing partnerships. This provides a buffer against fluctuating demand but also affords lenders a competitive edge in workforce flexibility and cost management.

Fine-tune your tech stack

Once your team is in place, it’s time to empower them with the right technology. For the past few years, I’ve been working inside one of the mortgage industry’s leading technology providers. Lenders have never before had access to such powerful technology.

There are too many factors involved in implementing a lender’s strategy to go too deeply into the technology here, but regardless of how the lender wants to run the business, there are tools available that can make that happen. Each lender is different and so their use of these tools will differ.

Two things I will say about technology. First, a simpler tech stack is a better tech stack. Improvements in the way developers bring products to market have resulted in a flood of new tools and many lenders have invested. Now, their tech stacks are bloated with functionality that doesn’t work well with their core systems and creates more friction. Simplify. Keep what you need and discard the rest. Don’t let the “sunk costs” fallacy keep you paying for technology that doesn’t help you become excellent lenders.

Second, if the tool doesn’t provide a measurable increase in efficiency by reducing touch points and overall cycle time, it’s not a good tool. When this work is done, the lender will have all of the technology required for its team to operate at peak efficiency, and nothing more.

Perfect your process

There’s an old adage in executive management that says you should tell your people what to do, but not necessarily how to do it. In many industries, this frees people up to be great team players and there are wins all around.

In industries where the government is just waiting for someone on your team or extended team to make a mistake, this doesn’t work as well. People need to know what the process is and how to perform it to the satisfaction of the lender, their investors and government regulators.

Lenders are pretty good at this in the back office, but when it comes to front-line salespeople they often leave them free to do what they do best. The problem with this is that good salespeople are often like water, they tend to follow the path of least resistance.

When refis are pouring in, they know where to go and who to contact (or recontact) to get more business. The hard work of building and maintaining relationships with business referral partners falls by the wayside.

Alternatively, when refis are down and purchase money is high, many loan officers don’t stay in contact with past borrowers as well because they know they’re not going to refinance a low-interest-rate loan. By the time the refis come back around, those past customers have made new friends.

The lender should take an active role in all processes the institution uses to do its work, including those in the sales department. When this work is done, every salesperson will be a top salesperson, doing the work required to bring in a steady stream of business, regardless of which loan products consumers are buying.

Today, the race is a long-distance, purchase-money event, where it takes seven or eight calls over the course of 30-45 days to reach the finish line. Soon, it will be all about refinance sprints that only take a call or two and as few as seven days to win.

To get ready for those races, leaders will begin now to pull their expert teams together, both internally and externally, fine-tune their tech stacks, and double-check their processes.

When that work is done, they’ll be in the starter’s blocks. When the pistol is fired, they’ll win the bulk of the new business.

Joseph Camerieri is a former mortgage lending executive, technology system sales leader and outsourcing leader. Today, he consults in the mortgage industry.

This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.

To contact the author of this story: Joseph Camerieri at [email protected]

To contact the editor of this story: Tracey Velt at [email protected]

Source: housingwire.com

Apache is functioning normally

Young aspiring homeowners are increasingly reliant on the bank of mom and dad to help make their purchase, new research finds.

Over a third of Generation Z and millennials who plan to buy a home in the near term are expecting to use, in part, gifts from family to help with a down payment, according to a report by Redfin. The 36% share is twice as large as it was just five years ago, the online real-estate brokerage said. 

In a 2019 millennial-only poll, 18% said they were turning to family for assistance, The portion increased by only 5 percentage points to 23% last year. 

Despite the surge in family support, Gen Z and millennial buyers are also trying to do their part as well in most cases. Approximately 60% of consumers in the same age demographics are regularly saving income to fund a down payment, with 39% also taking on second jobs to help them reach their homeownership goals, Redfin found.

Further down the list of likely funding options was the sale of stock investments, mentioned by 29%, while 22% said they would consider drawing early from retirement funds.   

The rising share of consumers using family gifts for a leg up points to a larger affordability issue that makes even a starter-home purchase beyond reach for many, according to Redfin Chief Economist Daryl Fairweather. 

“Because housing costs have soared so much, many young adults with family money get help from mom and dad even when they have jobs and earn a perfectly respectable income,” she said in a press release. 

“The bigger problem is that young Americans who don’t have family money are often shut out of homeownership. Many of them earn a perfectly good income, too, but they aren’t able to afford a home because they’re at a generational disadvantage; they don’t have a pot of family money to dip into.”

Heightened attention on housing challenges, particularly related to the difficulty in coming up with down payment and closing-cost funding, has turned much of the mortgage industry’s attention toward buyer assistance resources in the past several months. Last year, housing agencies across the country added 135 new programs, a 6% increase from 2022, according to data from Down Payment Resource. 

But consumers are sometimes not fully aware of the benefits offered. To address some of the information gap, Freddie Mac also unveiled a portal last fall to help aspiring homeowners and their mortgage lenders find down payment assistance they might qualify for.

As of January this year, just under 2,300 of such programs were available across the country, provided by a combination of groups, including state housing agencies, municipalities and nonprofits, Down Payment Resource said.

In March, two financial institutions announced their plans to up homebuyer assistance efforts. Atlanta-based Citizens Trust Bank launched a new down payment grant program, offering a maximum of $2,000 to eligible borrowers that can help reduce initial costs of the home purchase. 

Meanwhile, the Federal Home Loan Bank of Chicago said it would increase the amount made available to each of its Midwestern member institutions to $1 million for funding of their own homebuyer grant programs. The new total represents a 43% increase from the 2023 limit of $700,000, while the overall budget for the Chicago bank’s down payment assistance projects is now over $39 million. Eligible first-time mortgage borrowers will have access to up to $10,000 of financial aid when financing through a member bank or their partners.

Despite recent slowing in home price growth, the current level of housing costs is the No. 1 reason young consumers are opting not to buy in today’s market, Redfin said. In its survey, 43% of the segment not in the market cited it as a factor, followed by 34% who said the inability to save for a down payment deterred them. The challenge of keeping up with mortgage payments and perceived high interest-rate levels was each noted by 29%.

Housing affordability looks likely to rise in the public eye this year, with President Biden seemingly ready to make it a talking point during campaign season. In his recent State of the Union address, Biden called for mortgage tax credits, title insurance alternatives and up to $25,000 in down payment assistance in order to help address affordability challenges the country faces.

Housing issues could play a role in the final presidential election result. In a previous Redfin analysis, its researchers found a majority of U.S. households indicating home affordability might influence who they vote for this year. 

Source: nationalmortgagenews.com

Apache is functioning normally

Average mortgage rates were mostly down compared to a week ago, according to rate data compiled by Bankrate. Rates for 30-year fixed, 15-year fixed and jumbo loans decreased, while rates for ARM loans rose.

While mortgage rates are still on track to gradually come down this year, the path might be bumpy. Lenders price mortgages based on many variables, but overall, fixed mortgage rates follow the 10-year Treasury yield, which moves as investor appetite fluctuates with the state of the economy and Federal Reserve decisions.

Although the Fed still expects to cut rates 2024, policymakers opted not to at the central bank’s latest meeting, thanks in part to inflation that hasn’t yet returned to the Fed’s 2 percent target.

“The Fed is not in a hurry to start cutting interest rates as the progress toward 2 percent inflation has encountered some turbulence,” says Greg McBride, CFA, chief financial analyst for Bankrate.

The next opportunity for a Fed cut comes in May, the height of the spring homebuying season.

Whether mortgage rates move up or down, though, it’s tough to time the market. Often, the decision to buy a home comes down to needs. Depending on your situation, it might make sense to take a higher rate now and hope to refinance later — buying a home at today’s prices rather than a higher price in the future, while building equity that much sooner.

Rates as of March 28, 2024.

The rates listed here are Bankrate’s overnight average rates and are based on the assumptions shown here. Actual rates displayed within the site may vary. This story has been reviewed by Suzanne De Vita. All rate data accurate as of Thursday, March 28th, 2024 at 7:30 a.m.

30-year mortgage trends down, -0.05%

Today’s average 30-year fixed-mortgage rate is 6.91 percent, a decrease of 5 basis points since the same time last week. This time a month ago, the average rate on a 30-year fixed mortgage was higher, at 7.12 percent.

At the current average rate, you’ll pay principal and interest of $659.27 for every $100,000 you borrow. That’s a decline of $3.35 from last week.

Standard lending practices defer to the 30-year, fixed-rate mortgage as the go-to for most borrowers because it allows the borrower to scatter loan payments out over 30 years, keeping their monthly payment lower.

15-year mortgage rate moves down, -0.07%

The average rate you’ll pay for a 15-year fixed mortgage is 6.42 percent, down 7 basis points from a week ago.

Monthly payments on a 15-year fixed mortgage at that rate will cost approximately $867 per $100,000 borrowed. That may squeeze your monthly budget than a 30-year mortgage would, but it comes with some big advantages: You’ll come out several thousand dollars ahead over the life of the loan in total interest paid and build equity much more quickly.

5/1 ARM trends upward, +0.12%

The average rate on a 5/1 ARM is 6.63 percent, rising 12 basis points over the last 7 days.

Adjustable-rate mortgages, or ARMs, are mortgage terms that come with a floating interest rate. In other words, the interest rate will change at regular intervals, unlike fixed-rate mortgages. These types of loans are best for people who expect to refinance or sell before the first or second adjustment. Rates could be substantially higher when the loan first adjusts, and thereafter.

While borrowers shunned ARMs during the pandemic days of super-low rates, this type of loan has made a comeback as mortgage rates have risen.

Monthly payments on a 5/1 ARM at 6.63 percent would cost about $641 for each $100,000 borrowed over the initial five years, but could increase by hundreds of dollars afterward, depending on the loan’s terms.

Jumbo mortgage retreats, -0.04%

Today’s average rate for jumbo mortgages is 7.02 percent, a decrease of 4 basis points over the last seven days. This time a month ago, jumbo mortgages’ average rate was greater than 7.02 at 7.13 percent.

At the average rate today for a jumbo loan, you’ll pay a combined $666.65 per month in principal and interest for every $100,000 you borrow. That’s down $2.69 from what it would have been last week.

Refinance rates

30-year mortgage refinance rate moves down, -0.05%

The average 30-year fixed-refinance rate is 6.92 percent, down 5 basis points over the last week. A month ago, the average rate on a 30-year fixed refinance was higher at 7.10 percent.

At the current average rate, you’ll pay $659.94 per month in principal and interest for every $100,000 you borrow. Compared with last week, that’s $3.35 lower.

Where are mortgage rates going?

With inflation still above the Fed’s 2 percent goal and the job market holding strong, policymakers refrained from cutting rates at the central bank’s latest meeting. That could change later this year, as the Fed still expects to slash rates three times in 2024.

Keep in mind: The rates on 30-year mortgages mostly follow the 10-year Treasury, which shifts continuously as economic conditions dictate, while the cost of variable-rate home loans mirror the Fed’s moves.

These broader factors influence overall rate movement. As a borrower, you could be quoted a higher or lower rate compared to the trend.

What today’s rates mean for your mortgage

While mortgage rates change daily, it’s unlikely we’ll see rates back at 3 percent anytime soon. If you’re shopping for a mortgage now, it might be wise to lock your rate when you find an affordable loan. If your house-hunt is taking longer than anticipated, revisit your budget so you’ll know exactly how much house you can afford at prevailing market rates.

To help you uncover the best deal, get at least three loan offers, according to Freddie Mac research. You don’t have to stick with your bank or credit union, either. There are many types of mortgage lenders, including online-only and local, smaller shops.

“All too often, some [homebuyers] take the path of least resistance when seeking a mortgage, in part because the process of buying a home can be stressful, complicated and time-consuming,” says Mark Hamrick, senior economic analyst for Bankrate. “But when we’re talking about the potential of saving a lot of money, seeking the best deal on a mortgage has an excellent return on investment. Why leave that money on the table when all it takes is a bit more effort to shop around for the best rate, or lowest cost, on a mortgage?”

More on current mortgage rates

Methodology

Bankrate displays two sets of rate averages that are produced from two surveys we conduct: one daily (“overnight averages”) and the other weekly (“Bankrate Monitor averages”).

The rates on this page represent our overnight averages. For these averages, APRs and rates are based on no existing relationship or automatic payments.

Learn more about Bankrate’s rate averages, editorial guidelines and how we make money.

Source: bankrate.com

Apache is functioning normally

The Education Department has forgiven more than $45 billion of student loans for 930,500 longtime borrowers through the one-time income-driven repayment (IDR) account adjustment. If you’ve been repaying your student loans for at least a decade, you could be next in line — but you may need to consolidate before the April 30 deadline.

These types of loans require immediate consolidation to qualify for the maximum benefits of the IDR account adjustment:

  • HEAL loans.

  • Parent PLUS loans in repayment for less than 25 years (or less than 10 years, if eligible for Public Service Loan Forgiveness). 

  • Direct loans with different past payment counts.

If your loans aren’t on this list, you likely don’t need to take action to benefit from the IDR account adjustment.

“For those folks who are really focused on achieving forgiveness of some type, try to be as proactive as you can,” says Stacey MacPhetres, senior director of education finance for EdAssist by Bright Horizons, a workplace education benefits provider.

Here’s how to stay ahead of the curve.

Complete the consolidation application

“Consolidating your student loans means basically you take a bunch of individual loans and you turn them into a brand new single loan,” explains Jill Desjean, senior policy analyst at the National Association of Student Financial Aid Administrators. This new loan is called a “Direct Consolidation Loan.” There’s no application fee to consolidate.

Confirm which types of loans you have before attempting to consolidate. Log in to your StudentAid.gov account, and select “loan breakdown” from your dashboard to see what your loans are called. “Direct,” “FFEL,” “Perkins” or “HEAL” may be in the name. If your servicer starts with “Dept. of Ed” or “Default Management Collection System,” your loan is held by the government, not a commercial lender. If your servicer starts with a company or school name, you must consolidate your loans to get credit for IDR forgiveness.

To access the application, go to StudentAid.gov/loan-consolidation. The online form will automatically populate most borrowers’ contact and loan information. Confirm accuracy. Next, you’ll be prompted to:

  • Select which federal loans you want to consolidate. 

  • Preview the amount of your new direct consolidation loan and its interest rate. 

  • Choose a repayment plan, even if you’ll be eligible for forgiveness. If you aren’t eligible for forgiveness now, you’ll want to sign up for an IDR plan going forward to keep earning credit toward forgiveness. The form will direct you to the IDR application, which requires you to input or recertify your income information. 

  • Provide contact information for two references who can be contacted if the Education Department is unable to reach you. 

The entire process can take less than 30 minutes and be completed in one sitting, says the Federal Student Aid Office. For assistance or to apply for consolidation over the phone, contact the Federal Student Aid Information Center at 800-433-3243.

Generally, you can’t consolidate an existing consolidation loan unless you’re applying to PSLF or adding another loan to the mix, like a Perkins loan that you didn’t previously consolidate.

Don’t miss the deadline

You must submit a consolidation application by April 30 to get the maximum benefit. Don’t put this off — though this consolidation deadline has been moved in the past, another deadline change is unlikely, experts say.

After application submission, the Education Department says most consolidation loans are disbursed within 60 days.

“Once you submit that application, there’s a whole behind-the-scenes process happening with the [Education] Department and any lenders, where they’re kind of making payments to one another,” Desjean explains. “Basically … the Department is buying your loans from whatever bank is holding them.”

In the past, consolidation could reset your payment counts to zero for IDR and PSLF forgiveness. That’s no longer always the case.

If you meet the April 30 consolidation deadline, your consolidation loan will get credit for the oldest underlying loan. For example, if you’ve been repaying a commercially held FFELP loan for 18 years, and a direct loan for five years, your new consolidation loan would get 18 years of IDR forgiveness credit after the adjustment.

“The most common example is somebody who goes to undergraduate, gets loans for undergraduate, then they take a break and go into repayment. And then years later, they go back for their graduate degree and they take out new loans,” says Betsy Mayotte, president and founder of The Institute of Student Loan Advisors.

After consolidation, your payment count may temporarily show as zero in your account. “Don’t freak out, they’re doing these adjustments in batches,” Mayotte says.

The payment recount should be reflected in your account by July 1, at the latest, per the latest Education Department guidance.

Partial payment credit is possible after April 30

You could get some credit for past payments on direct loans if you miss the April 30 consolidation deadline — but not as much. Instead of getting payment count credit for the oldest underlying loan in your new consolidation loan, you’ll get a weighted average of the payment counts of all underlying loans.

For instance, if you consolidate two $10,000 direct loans after the deadline, and one has been in repayment for eight years while the other has been in repayment for two years, your consolidation loan will get five years of credit toward IDR forgiveness. But if you apply to consolidate these loans by April 30, your consolidation loan will get eight years of credit.

For borrowers pursuing PSLF, the weighted average rule takes effect on May 1. It takes effect for all other borrowers on July 1.

Know the implications of consolidation

Consolidation is irreversible, so consider the pros and cons of consolidation before taking this action. Outside of the IDR account adjustment, consolidating certain types of loans can open the door to PSLF and IDR plans that can shrink your monthly bills. It can also simplify your payments if you have loans with multiple servicers. On the other hand, the process could lengthen your repayment period, which could increase the amount of interest you pay over time.

The following loan types require additional considerations.

Perkins loans

Think twice before consolidating your Perkins loans if you’re eligible for Perkins loan cancellation, which can forgive your debt if you work a public service job for at least four to seven years — much more quickly than PSLF or IDR.

HEAL loans

The government shuttered the Health Education Assistance Loan (HEAL) Program in 1998, but some borrowers are still repaying old HEAL debt.

If you consolidate a HEAL loan by April 30, the new consolidation loan will get credit toward IDR forgiveness for the oldest non-HEAL loan it includes.

If you have HEAL loans only, you should still consolidate them if you want to access IDR plans or PSLF. But your IDR forgiveness clock will start at zero after consolidating.

Parent PLUS loans

If you’ve been repaying parent PLUS loans for at least 25 years (or 10 years if you, the parent, are eligible for PSLF), you should automatically get forgiveness of your remaining debt under the IDR account adjustment. You don’t need to consolidate.

If you’ve been in repayment for close to 25 years, but you’re not there yet, consolidate before April 30 to get IDR credit for past periods of repayment for the oldest underlying loan. To keep making progress toward forgiveness, you must enroll in the Income-Contingent Repayment (ICR) plan, which is the only IDR option available for consolidation loans containing parent PLUS loans.

Consider consolidation carefully if you’re not near the 25-year finish line because your monthly bills can increase substantially under the ICR plan. Use the Education Department’s loan simulator to estimate the costs of different repayment scenarios.

Source: nerdwallet.com