Student debt is a ongoing concern for millennials and the generation that have followed. However, a recent plan for Senator Elizabeth Warren could give prospective millennial homebuyers the route to saving up for a down payment three years faster, according to a recent report.
"As part of her presidential campaign, Senator Elizabeth Warren has introduced a proposal to cancel up to $50,000 of student loan debt per person," according to Redfin.
"Under this plan a typical aspiring first-time homebuyer laden with student debt could save a down payment in nine years, three years faster than the 12 it currently takes."
The company conducted its research under the assumption that a potential homebuyer with the average amount of student loan debt spends $549 per month on repayment at a 5.8 percent interest rate.
"If after paying off her student debt she started saving that 10 percent of her income toward a 20 percent down payment on the national median-priced home ($308,000), it would take 12.3 years to pay off her student loans and save enough money for the full 20 percent down payment ($61,600), assuming home price and income did not change," according to Redfin.
"Under Elizabeth Warren’s plan to cancel up to $50,000 of student loan debt, she could instead immediately begin saving for a down payment, shrinking the time it would take to save up the down payment to 9.4 years."
Many millennials are skeptical about taking on a mortgage payment due to student loan debt. With Warren's plan it is possible that mortgage professionals could see an influx of millennial homebuyers.
To learn more about student debt and the potential of Warren's plan, click on the image above.