Buying property with student debt

[Logale]

Jurisdiction

Tennessee

Hello,

My wife and I are trying to buy property to build a house.
We have 130k in student debt in her name with Sallie Mae.
Should we put the property only in my name until we are paid off? My fear is that worst case scenario if they were to come after us then they could take it.

Thoughts?

 

[army judge]

It is a very rare occasion where a person's home is seized, sold, and the occupants booted to pay a debt.

It can happen, but its rare. Usually a lien is placed against the home, which does nothing towards foreclosure.

In your state, TN, mine, TX, it almost never happens.

However, if your spouse tries to finance a home with a student loan arrearage, I suspect she wouldn't be approved. In fact, even if she isn't on the loan app, it might harm your chances.

I wish you well, mate.

 

[Logale]

Thank you, and thank you for a quick reply! I appreciate it.

 

[army judge]

Thank you, and thank you for a quick reply! I appreciate it.

Happy Home Hunting, and when you snag your new digs, share a picture or two with us.

We love happy endings.

 

[zddoodah]

Should we put the property only in my name until we are paid off?

A question that starts with "should we" do X, Y or Z is a request for advice (although in this case it may or may not fall within the scope of "legal advice"). In this regard, please read the disclaimer at the bottom of every page at this site.

What I can tell you is that few, if any, lenders will give a joint loan if the property is only in one spouse's name (and changing title after acquiring the loan could be a breach of the loan agreement). Of course, if you're able to obtain the necessary financing entirely on your own, then whether you take title jointly or only in your name is simply a decision for you and your wife to make (although, in my opinion, she'd be a fool to agree to it).

My fear is that worst case scenario if they were to come after us then they could take it.

"They" being the servicer of your wife's student loans, I assume. As long as your wife makes payment on her loans, this won't be an issue.

It is a very rare occasion where a person's home is seized, sold, and the occupants booted to pay a debt.

I concur.

 

[adjusterjack]

Thoughts?

Yeah.

Pay off the student loan before you buy a house.
Pay off the student loan before you buy new cars.
Pay off the student loan before you have babies.